Mahinda at loggerheads with Mangala over shipping industry liberalization

• Says his ministry nor industry stakeholders consulted
• “It is a wrong proposal and I am totally against it”
• Says would only allow it if foreigners willing to invest heavily
• But praises Mangala for presenting non-populist budget

Ports and Shipping Minister Mahinda Samarasinghe said he was broadsided by Finance Minister Mangala Samaraweera’s budget proposal to liberalize foreign ownership in the shipping and freight forwarding industries, which Samarasinghe said that he would not allow to take place unless foreigners invest heavily.

“I don’t know who proposed this from the Finance Ministry. It is a wrong proposal and I am totally against it. I will inform parliament. I will not sign this gazette. I don’t want to sign a gazette that will send over 500 local company owners and employees home,” Samarasinghe said during an interview on a state-owned television channel.

He noted that Samaraweera had not consulted with neither him nor the Ports and Shipping Ministry with respect to the proposed changes to remove the 40 percent limit on foreign parties to owning shipping agencies and freight forwarding companies.

“How can they amend a gazette issued by our ministry in 1992 without having discussed it with me? Who else can amend a gazette like this? The Finance Ministry cannot do that. If they do that, someone can file a case against it since by law, I, as the Ports and Shipping Minister, have the authority to do any amendment. Not anyone else,” Samarasinghe said.

The communication dynamics between the United National Party and Sri Lanka Freedom Party (SLFP), which form the national unity government—which the ruling politicians claim is positive for the economy—were also exposed during this interview. “This is a coalition government. The SLFP is part of this government. Therefore, if they are bringing a proposal like this and if an SLFP minister is in charge of that subject matter, they need to specially talk to the minister and his ministry. 

But they did not do so,” Samarasinghe said.

He went on to say that Samaraweera had not discussed the planned liberalization with the industry stakeholders.

“We are talking about an industry that earns US $ 800 million in foreign income. This foreign income is all kept within the country. They also invest part of this income. These stakeholders should have been engaged but they had not been engaged,” Samarasinghe said.

He said that he had informed these viewpoints to Samaraweera immediately following the budget speech and that further discussions will take place with Samaraweera to convince him of the arguments made by the local shipping industry and the SLFP and to maybe allow foreigners to fully-own local shipping agencies only if there are big investments.

“If the foreigners can invest at least US $ 100 million, then I can tell the local industrialist that this is good for the country and that they should compete. Otherwise, I will not allow our local companies and industry to be strangled, destroyed and handed over to the foreigners,” Samarasinghe said although adding that foreign investments to the industry would most likely not be forthcoming.

However, Samarasinghe praised Samaraweera for presenting a forward-looking, non-populist, fundamentally strong budget to bring in foreign direct investments, which are required for the country’s development.

“Minister Mangala Samaraweera is an experienced and practical minister. He brought various bureaucrats and industries to the table and gave them leadership,” Samarasinghe had also said.
The finance minister, who had spoken at a post-budget forum, had said that although the shipping industry had informed him of their displeasure with the proposal, Sri Lanka cannot continue to be a ‘nanny state’ and the locals must compete with foreigners.