Liberalising Sri Lanka’s ship agency sector will attract foreign investment, improve efficiencies and reduce costs, Eran Wickramaratne, State Minister of Finance and Mass Media, said.
“Liberalisation of shipping agency business is a key stepping stone for us to develop Sri Lanka as a maritime and trading hub in the Indian Ocean,” he told a forum of key public and private sector stakeholders in the shipping industry.
“Allowing foreign ownership in the sector will expand the size of the overall market,” he said, referring to government plans to lift the 40 percent foreign ownership restriction on shipping agencies.
“We should take advantage of the window of opportunity available to us and maximise the advantage of Sri Lanka’s location,” Wickramaratne said at the Public-Private Dialogue hosted by the International Trade Centre (ITC).
It was held to provide a platform for all stakeholders, including the private sector, to share their views and concerns over liberalisation, which has been opposed by ship agencies.
Wickramaratne said that one of the island’s greatest advantages was its strategic location on maritime routes in the Indian Ocean, which has enabled it to become a container transhipment hub.
But the island’s full potential remains unused, he said.
A key aim of the government is to develop the island as a maritime and trading hub in the Indian Ocean.
“We hope to have taken the initial steps by 2025 for which we need to invest and reform our offering,” Wickramaratne said.
While port infrastructure is being developed, “another crucial step in this process is full liberalisation of the shipping industry,” he said.
Current ship agency pricing controls are artificial structures that do not reflect market dynamics.
“Also the industry is controlled by large domestic players and there is a lack of foreign participation in the agency business,” Wickramaratne said.
“Through liberalisation we could become more competitive and more efficient.
“By removing the 40 percent foreign equity ownership limit, more global firms will invest in Sri Lanka, increasing competition, leading to greater efficiency, lower cost and higher quality of services that would benefit exporters and importers.”
(Source: Economy Next)
Sea News, October 2