By S. Sivathasan –

S.Sivathasan

The caption may invoke the prejudice of comparing the incomparable. It will certainly look a study in contrasts. Yet there is many a point of comparison. Shenzhen has already created history with late entry in three important areas, as a Special Economic Zone (SEZ), in urban development and in maritime transport. This transformation was achieved in 33 years with incredible changes to be seen in the next few years. The reality and the principal contrast is that Sri Lankans are not Chinese.

The year 2050 is a convenient point of time to frame targets, since global magnitudes on a variety of parameters stand already estimated. They encompass population, urbanization, energy, food availability, GDP, FDI, shipping and the like. Hambantota therefore has an astronomical time span of 37 years, to draw up worthwhile, implementable plans reaching up to 2050. From the limited information available in the public domain, it appears that a comprehensive development of the port area is in sure and competent hands, though the sequence of some segments seems misplaced as the country would affirm.

Shenzhen

Shenzhen was a fishing village till 1980 in which year China’s first SEZ was established there. It was then home to a population of 333,000 people. It has grown since, 4 times in the first 10 years and 21 times in 20 years till year 2000. A further fifty percent in the following decade took the population to 10.35 million by 2010. The city core has a population of 3.5 million, with a density of 13,000 per sq. mile. In speed of growth the city has been among the fastest in the world.

What brought this about? Firstly, the disposition of the leadership. It meant business. It had a vision by the country and the constancy to stand by it. When Deng was asked by Mao what he was doing during the time he was eclipsed, he replied “I was preparing”. It certainly would have included living by the cardinal instruction of Liu Shao Chi’s self-abnegation in his “How to be a Good Communist”. After he unselfed his self, there was no thought of myth building, familial succession or place in history. Today Deng is revered in China and respected by the world.

With thrust from FDI, manufacturing came first with service industries to follow. City development with office space and magnificent housing provided for an explosive demographic change. Together with a modern city supported by full infrastructure, Shenzhen held an investment of $ 30 billion by 2010.

In Shenzhen 11 years after the SEZ was established and subsequent to the sea port being developed, following a felt need the Airport was opened in October, 1991. At Hambantota, the SEZ is yet to take shape but 3 years after the sea port was opened, the International Airport too was opened. Shenzhen Stadium accommodates 33,000. The Hambantota International Cricket Stadium accommodates 35,000. The former was opened after 13 years of exponential development. The latter, ahead of the SEZ and the port. Is the precedence well thought out?

Hambantota

The hinterland of Hambantota harbor is yet to map out a confidence inspiring blueprint for an SEZ for investment, to follow a similar pattern of growth. Sri Lanka’s principal cities, having seen planned growth should be bursting at their seams and spilling over with investible capital to reach for fresh territory like the suburbs or port precincts of Hambantota. This is a crucial condition for a modern city to be developed in an area considered remote from the capital and with the complement of infrastructure yet to be executed to levels of acceptance. In maritime transport, the nation’s economy may play a significant part though it is not the sole determinant.

The size of the country and of its economy are not necessarily restraints on port development or expansion. Lack of vision or narrow horizons certainly are. Sri Lanka is 110 times the size of Singapore, but the port of the latter handles 7.5 times more container TEUs than what Colombo is equipped for. India’s economy is 6.6 times larger than that of Singapore. But the latter’s container throughput is 3 times higher than that of India. Better developed human resources led by a well-endowed intellectual in political leadership can take Hambantota to desired heights.

Lalith  Athulathmudali as Minister of Trade and Shipping had the vision to establish the first container terminal in Colombo with a capacity for 41,600 TEUs in 1980. He had the capacity to develop a hub port which registered a 15 fold increase in TEUs in 8 years. Colombo was lifted in 8 years from 139^th place to 26^th rank. The rank is well maintained even today at 35^th place with capacity developed 100 fold compared to 1980. Vision can better the performance for Hambantota compared to others in the region. However hinterland development supportive of the SEZ and the harbor will demand good governance and rule of law as primary conditions.

Advantage Hambantota

Hambantota lying as it does in proximity to busy sea lanes, has location as its principal asset. It is estimated that 290 ships sail past Hambantota each day or around 100,000 per year. A firm count is only moments away and is not necessary except to satisfy skeptics. To be seen in perspective, may it be noted that 3,000 ships go past the Singapore Straits each day. Every 12 minutes a ship docks in Singapore ie as many as 43,000 per year. In Shenzhen, 24,000 ships stopped over in 2010.

The most optimistic forecast about shipping is that volumes will more than double by 2030. In that event, what are the prospects for the world, Singapore, Shenzhen, Hambantota and Colombo? Should Trincomalee and Kankesanthurai be far behind? As of now a grave shortcoming in the country of ‘thinking small’has been superceded by ‘thinking large’. This new vista has extended to road infrastructure and to port development. Colombo with its Port City and Hambantota with the FTZ will change the physical landscape of at least two districts. Extension in different ways to other districts is vital for regional balance and societal harmony.

Is limited draft a major problem? No. Is rock in or near the harbor insurmountable? No. Both have been resolved without much difficulty in many parts of the world. As for draft, many of the ports including Singapore and Colombo have 15.5 metres. Hambantota has 17 metres. The trend in shipping is certainly to build larger ones for bulk carriers as well as containers on account of economies. Even so there is no swift switch over. Regarding container carriers, a substantial majority of the ships need less than 16.2 metre draft. The 22,000 TEU mega carrier may not make its appearance earlier than 2018. Where dredging stops when rock is encountered, under water blasting technology steps in. After this has been done at several major harbours like New York and Hong Kong, should one have fears about Hambantota. China speaks of her experience at Three Gorges and in Shanghai. So optimism needs to be the mood.

Singapore

With container port throughput of 30.7 million TEUs, Singapore ranks second in the world among container ports.  Shanghai is first and Shenzhen is fourth. The world has 600 container ports and Singapore is connected to nearly all of them. The advantage of land space that Hambantota has, Singapore doesn’t possess. Nor do Colombo and Chennai. Yet all three are on expansion mode. Singapore is even considering underground for logistics. This is her strategy to overcome land limitation and to nearly double capacity and to have a top slot in shipping. To win, one has only to have the confidence to be resourceful.

Colombo

The modernization of Colombo port commenced in 1980. A beginning was made in embarking on containerization. It was seen that the opportunities captured by Singapore were partly those forfeited by Colombo. When amends were being made in the current century, the compulsions made expansion imperative and recourse was had to borrowing – from the best lender and the fastest constructor – China.

World Seaborne Trade (WST)

WST standing at around 9 billion tons in 2012, is projected to reach 19 to 24 billion tons by 2030. Estimates vary and gaps are wide, but orders of magnitude are a fair guidance. OECD says that 90% of global trade by volume is carried at sea. Some estimates are as low as 80 while 95 is also mentioned. Three fundamentals – pace of economic development, resource demand and population growth – are factored into computations of the future shipping environment.

The growth environment of the future is seen as strong in a positive mental frame. How will the mood manifest in concrete terms? Globally, maritime trade will double in 17 years, or more than. In 2011, crude oil, petroleum products and gas composed a third and dry goods two – thirds of sea borne cargo. By 2030 China will triple her oil consumption compared to 2011, while overtaking North America as the largest consumer. World oil consumption then will be 6.6 billion tons showing an increase of 50% in 20 years. In the same period world coal consumption will more than double to 8.4 billion tons of oil equivalent from 3.5 billion in 2010. China would then account for 60% of global consumption. In these 20 years from now, natural gas consumption will double to 5.4 billion tons

What matters is how investors will respond to the growth forecast. It is seen that in the early years of this century itself, the world of shipping had got geared to meet the challenge. By end 2011, world fleet had expanded to 1.5 billion DWT. This was an increase of 37% in 4 years. As striking was China, Japan and South Korea delivering in 2011, 93% of tonnage. In the coming years it is estimated that the bulk of new builds will be by China 55% and S.Korea 27%.

Prospects

With a plethora of information easily accessible, those who develop a mastery of it can engage in safe predictions about the evolving scene. Yet others can speculate about the likely outcomes as they unfold.

Some salient features however may have some respectable acceptance.

It appears that China is very much measuring up to the keen observation of Napoleon. She has awoken and is shaking the world. The Far East and the South East, with a greater weightage on a particular pigment is tilting the world. The centre of gravity in the economic sphere is visibly shifting. The wealth of production is now coursing through the oceans. The carrying activity itself has become a multi trillion dollar engagement. Nations that are farsighted will partake of the best cut. To balance the tilt, is South Asia with India and the Indian Ocean.

If global warming becomes irreversible and the Arctic melts, a new ocean route will open up in the North as has already happened. Here too the main beneficiary will be the Far East. How much melting will determine round the year smooth sailing or with the aid of Russian ice breakers. Rotterdam will then assume great significance as a gateway to Europe. The route will extend to North America as well. The process will be steady but progress will be slow. Whatever happens, the world will stand to gain. If wisdom prevails, Sri Lanka too, West, North, East and South can be optimistic.