Nov 13, 2017

Liberalizing the shipping industry important to economy

The decision by the government to liberalize the country’s shipping industry as proposed in the 2018 Budget, is a timely move, says shipping industry sources.

These sources explained that the entry of global shippers like Maersk, MSC etc., into Sri Lanka would help the country achieve its target in becoming the regional shipping hub.

Dismissing claims by certain members monopolizing the local shipping industry that liberalizing the sector would result in job losses as well as a drain in foreign exchange due to the country, shipping sources claim that there would in fact, be an increase in  employment in the shipping industry when foreign companies enter the market.

“There will be more highly paid jobs created when global players enter the industry. As for the myth that foreign exchange would be taken out of the country, there are already laws where a company has to pay dividend taxes. The government could also impose a law calling on foreign companies to spend 50 percent of their profits on the development of infrastructure in the local shipping industry,” sources explained.

International players would also bring additional business, which can help existing players in the industry.

Also, names of industry leaders associated with a country could serve as catalysts to bring in others.

Taking a swipe at two conglomerates monopolizing the country’s shipping industry at present, the sources claimed that according to regulations of the Federal Maritime Commission (FMC) of the US, no party should be allowed to monopolize the shipping industry in any country.