East Container Terminal, socially coded for State ownership?

Although its history predates the arrival of the Europeans on our shores, historically, modernisation and the expansion of the Port of Colombo ran concomitant to the plantation industry – Pic by Shehan Gunasekara 

I have been to the Colombo harbour only once, and that was to browse through the books on the floating library MV Logos, which docked there some years back. 

Harbours are big places; after a longish walk in the hot sun, the eager book lovers formed a slow-moving line on the quay where the ship was moored. The ship could accommodate only a certain number, and choosing books take time. The queue shuffled forward patiently, as batches were taken up in order. 

We felt a thrill when we eventually reached the last barrier before crossing over to the ship on what appeared to us landlubbers an unsteady plank. Reassured by the alert gaze of the smartly turned out sailors manning the entry point, we hobbled on clumsily to the ship, gripping the wire railing hard.

Occasionally, my interest has been drawn to harbour related news, mainly labour union activity, a threatening statement by a union, a strike, sometimes a customs inquiry into an irregular shipment. By the widespread protests against the Government’s move to bring in an Indian company as a major shareholder of the East Container Terminal our attention is once again directed at the Colombo Harbour, the backbone of our import/export economy. 

Port and plantations

Although its history predates the arrival of the Europeans on our shores, historically, modernisation and the expansion of the Port of Colombo ran concomitant to the plantation industry. In 1948, the departing British left behind a large and a well-developed harbour for those times.

The years immediately after independence saw heightened trade union activity. Nearly all unions in that era were under the control of leftist parties such as the LSSP, CP and MEP. Naturally, with its large labour force, the Colombo Port was a hive of politically motivated agitation, strikes which paralysed the economy were the order of the day. In 1958, the anxiety driven Bandaranaike Government, running helter-skelter, moved to nationalise the port and stevedoring, placing these services under the management of the Port Cargo Corporation. It must be noted that nationalisation did not end politically inspired strikes, they were a common tactic of the left parties as they bargained for power. In 1964, the Mrs. Bandaranaike Government moved to nationalise the Galle Port. Later, the same fate fell on Trincomalee.

For perspective of those days of relentless union activity, we should bear in mind that Colombo was only a minor port relative to global economic scales. In terms of export volume/value, in 1947 we exported 287 million lbs of tea valued at $ 170 million. Twenty-five years later, in 1970, our export volume of tea had increased to 459 million lbs but our earnings only $ 188 million. 

In rubber, the ratio in 1947 was 182 million lbs earning $ 39 million, while in 1970 it was 354 million lbs earning $ 74 million. Although a few did benefit immensely, it is clear that agricultural commodities did not pave the way to riches, taking the country as a whole. Considering our miniscule volume of trade, the Colombo Port was always a small player, even in regional terms. All this political/union agitation was happening in a small pond; economic small fry, getting smaller.

Modern ports

Much water has flown under the bridge since those mad confused days. Today harbours are huge pulsating engines, working round the clock to meet the ever increasing demands of trade. In a country like Singapore, the port, run as a private company, is the heart of their amazing economy. Modern ports, to remain relevant, call for billions of dollars in investment and sharp decision making. 

Servicing the ships, modern docking facilities, efficient cargo handling, cleanly (honestly) run container yards, huge cranes, gantries, go downs, demand cutting edge expertise and mega capital investments. Cargo ship handlers abhor bureaucratic delays, time spent in the harbour needlessly, is opportunity lost, money wasted. Importers want their raw material promptly, exporters want their goods delivered, a meaninglessly day pushing paper, is a cost unnecessarily incurred, efficiency impaired.

That Sri Lanka runs to an unhurried beat needs no highlighting. Keeping with this slow rhythm of life, or possibly for that very reason, is a widespread belief that the State is a beneficent patron, a mother you can always run to. Such familial references resonate culturally, reassures; like that which belongs to your parents, ownership by the State amounts to enjoyment rights. 

A little meditation on the subject however will soon disillusion the hopeful. Whether State owned or not, every economic asset has to be maintained, and, if not efficiently managed, eventually we will spend more than we should on an asset relative to its utility. In other words, because they are run less efficiently or at a loss, the people have to bear the additional cost sooner or later. Compounding the problem, we have the dreadful culture of political appointments, the Minister appointing his relatives and cronies to run State institutions. For the politician’s family, political appointments have become a sure way to enrich themselves, and, to climb the social ladder.

The law in this country distinguishes State property, it is in a superior class to other categories of property; say to the house you bought after a life time of sweating. A criminal may set fire to your house, break in, rob it, the law will take its course, slowly, erratically. Offences against State property on the other hand, can invite immediate, rather painful consequences, even before the trial. 

When you consider the overwhelming multiplicity of property that fall under this category: jungles, mountains, beaches, waterways, roads, railways, Government-owned buildings and motor vehicles to the mundane office stationery, wittingly or unwittingly, the citizen walks on dangerous ground. For those facing an allegation of offending any State property, there is no bail until trial. 

Confirming the farcical nature of the exercise, the most abused property in the country is also perhaps the very same State property. Across the board there is abuse, waste, neglect; it   is generally believed that State contracts are invariably corrupted, many of its functions undermined by bribery. Even when services are performed, they are lacklustre and uneconomical.

Not everyone agrees that the institution of the State is necessarily benevolent, arguing that this behemoth is only a necessary evil. Several leading political theorists have defined the State as an instrument of oppression by the ruling classes, only that the oppression is camouflaged, baring its fangs only occasionally. 

Welfare state

From about early 19th century, reformist have introduced measures which gradually pushed the State towards welfarism, an idea which works well when the economy of a particular country is robust. Where the economies are weak, State services soon degenerate, becoming a bed of corruption and favouritism, as a few well -placed individuals grab for themselves the scarce resources of the country. Those who are well placed in the system, by election or appointment to high office, have a field day.

However, we cannot yet conceive of a country without the instrument of a State, particularly to meet the many functions that cannot be performed by any other entity; security, infrastructure, policy making, welfare and sometimes health, education and so on. The problem arises when the State moves into areas of economic activity, which could be handled more effectively by the private sector, thus allocating the limited resources of the State in a less efficient manner.

There is the glaring example of the Srilankan, an airline which is a major factor in the nation’s indebtedness. In the power sector, notoriously corrupt, we are per unit one of the most expensive in the region, thus making our industries less competitive. Having introduced non fee levying education in the 1930s, during the early years of independence we scored well in general education (up to the secondary level) against other newly independent countries. Now these countries have got their act together, and are powering ahead. 

While we are stuck in a particular mindset, educational theories have undergone rapid changes, more specialisation is called for, new fields of employment are opening up on almost a daily basis. Meanwhile, we have become less competitive, a country known for only low level technology, earning foreign exchange by exporting untrained or semi-skilled labour. In per person productivity, we lag behind our industrial/agricultural competitors. 

Clearly, there is something missing in the country’s education and training. It is a noteworthy fact that nearly all the top universities in the world are privately run. Our universities have a deplorable reputation for their brutal rag!

Heathrow, the main airport in Great Britain is privately owned, a major shareholder of Heathrow being the Qatar Government, an Arab country which is hardly an ally of Britain both culturally as well as politically.  It is said that more than 10% of the properties in London are owned by foreign parties. The British surely know a thing or two about governance. Britain is prosperous and well managed, with a much regarded civil service as well as a widely respected judiciary. Many a country has adopted British methods as an aspired standard.

Patriotism and privatisation

In the larger scheme of things, whether the East Container Terminal remains in State hands or not perhaps is immaterial. Since the debate is couched in terms of patriotism, the pro-State lobby can be declared winner, even without hearing the other side. It however beggars the question, if State ownership is more desirable, why is it then that a preponderance of the economies of all the developed countries, are in private hands? Perhaps, these countries are populated by less patriotic people!

We may amount to only the occasional footnote in world history, the smallness of the country and our location away from the paths of migrating tribes ensured its relative isolation. New ideas and methods were much delayed in their arrival. Yet, for political inspiration our point of reference is often the era of the kings, when he and he alone owned everything. Every other political idea seems out of place beside that august presence.

In our bio or social coding, reality is a conspiracy, facts are relative, myth preferable to failure; the illusion alone matters. By keeping as much of the economy under State ownership, we perhaps affirm our particularity.