Sri Lanka’s stance on realigning maritime pathways and integrating purposefully across Indo-Pacific region

Admiral Jayantha Perera addresses the 2022 edition of the Indo-Pacific Regional Dialogue in New Delhi from 23 to 25 November

Writer Admiral Jayantha Perera with India’s Navy Chief Admiral Hari Kumar (2nd from left) and former Chief Admiral K.B. Singh (right)

The global maritime supply chains undoubtedly serve instrumental in shaping the trade pathways of nations, as a majority of the exchanges take place through sea routes. However, having in place an all-inclusive multimodal transport system unfolding connectivity platforms bridged by rail, road, air and water ways, would be essential in building a more holistic industrial ecosystem that may seem business friendly.

Nevertheless, regions across the globe have continued initiating efforts facilitating the improved functioning of the supply chains manoeuvring the maritime industry. Amidst the progress gained till date in creating connectivity channels beyond borders for the ease of doing business, many nations have now quite attentively begun implementing the One Stop Shop strategy, to provide the investors with all supply chain services under one roof. While it is noteworthy to state that trade, ports and transport have become key components of the connectivity network enabling nations to function as one global village, the maritime sector may certainly serve as the greatest stimuli in improving the trade profiles of nations.

Gaining insight from the UNCLOS provisions for fostering maritime diplomacy which stipulates the legal framework governing all maritime operations, the global maritime sector has scaled new heights towards becoming more inclusive by enforcing open policies. However, at a time when the concept of maritime connectivity is gaining precedence, the Indo Pacific region in particular has excessively commenced investing in water ways, air and road ways with the primary purpose of gaining easy access to all global markets. Ports have become the centre poles integrating coastal economic zones, smart port cities as well as industrial parks into a network of activity, allowing port led industrial investment opportunities to surface and multiply.

Therefore building connectivity across a blue economy may certainly require having in place, better marine spatial planning and management systems, which could offer secure channels of navigation, flexible over flight regulations, suitable marine ecology protection guidelines, easy approaches to access inland road and rail ways as well as an open, free, fair and multilaterally beneficial trade and investment governance framework.

Speaking of the Indo Pacific region at length it must be stated that the region offers the primary passage of connection bringing together the busiest sea lanes of global trade transportation. Half of the world’s container traffic, one third of bulk cargo transportation and two thirds of global oil trade transit the waters of this region, approximately accounting for 50% of the world’s shipping trade. Ports in this region have been categorised based on their transhipment incidents percentages, as gateways, regional hubs and pure transhipment ports. Furthermore, this region is expected to contribute 22.1% of the World GDP by 2025 and this process of regional maritime integration which regional nations have reaffirmed its faith in taking forward towards a successful closure, has been further facilitated by the gradual unfolding of the phase of digitalisation, which has necessitated a majority of the supply chain functions to be carried out on virtual platforms.

In this context, Sri Lanka’s role as an island nation in the contribution made towards promoting regional maritime connectivity, is certainly vital to understand as the locational advantage of occupying a strategic position along the main maritime pathways, provides seafarers and supply chain intermediaries with better integrated navigation platforms. While eight nautical miles south of Sri Lanka lies the East West shipping corridor, it further serves as a bridging platform connecting Asia to Europe. However this being the busiest sea route in the world, more than 200 ships move along these channels daily, carrying two-thirds of the world’s oil and one-third of the world’s container shipment.

Moreover, Sri Lanka has also been identified as the only South Asian transhipment hub and the central point linking the Middle East and the Far East hubs within four days of sailing and four hours of flight time. Therefore as time goes by, it may certainly become evident that Sri Lanka will be able to transform itself into a hub of maritime trade in the Indian Ocean region. Although the unfavourable post COVID-19 conditions and the economic dilemma encountered by the nation since lately, have served as impediments towards driving forward sector oriented growth and development work, the country is keen in implementing private public partnership oriented strategies to help alleviate instability and overcome the economic setback. Therefore, all such initiatives will certainly be applicable when necessary to also maintain both certainty and stability within the maritime sector.

However, Sri Lanka at present has prioritised the undertakings relating to marine spatial planning as well as the realignment of inland resource and land management systems, which the nation believes may help complement the process of promoting maritime trade activity and gaining advantage of being positioned in the world’s fastest growing economic region, comprising of widening consumer markets and industrial sectors. Therefore increasing the productivity levels and the handling capacity of sea ports located along the coastal belt of Sri Lanka, while also improving the associated infrastructure will remain mandatory, if the envisioned long term hopes of becoming a regional hub for maritime trade is to be realised as planned.

The speedy development that is taking place to recreate the shipping logistics infrastructure facilities in and round the main ports of Sri Lanka such as the port of Colombo, port of Hambantota and the port of Trincomalee, is allowing the expansion of existing terminals and building of new terminals with enhanced capacity, that could easily handle the largest categories of vessels, while also paving the way for extending entreport services.

Moreover with a share of 2.5% of the GDP, the entire maritime sector of Sri Lanka has been able to draw $ 2 billion revenue annually and has been able to contribute 7% of the national export income. The present maritime operator base consists of 500 Shipping Service Providers, 185 Shipping Agents and 28 Container Providers and the ongoing maritime sector operations have also been able to elevate local content development activities, merely by creating 40,000 to 50,000 direct employment opportunities. As a point of observation it must be stated that, efficiently managed maritime operations with time, have been able to enhance the quality and quantum of the nation’s maritime sector driven trade exchange flows, which is indicative of the substantial contribution made by the sector towards boosting both national and global trade operations.

The efforts initiated by the Sri Lanka Ports Authority (SLPA) along such lines are plenty and as a part of the National Port Master Plan the capacity and efficiency enhancement strategies which the Sri Lanka Ports Authority (SLPA) intends to enforce and practice, is expected to increase the two way flow of business activity conducted close to the sea ports of Sri Lanka.

The port of Colombo identified as a deep draft port, which was able to secure a milestone achievement of being able to handle a total of 7.2 million TEUs in 2020, as assessed by the UNCTAD Port Liner Shipping Connectivity Index 2022 of the first quarter, was identified as the 17th best out of the 25 world’s best ports and was further recognised by the World Shipping Council in 2020, as the 25th best port among the top 50 container ports in the world. However, plans have already been undertaken to improve the level of efficiency of the major container terminals to gradually reach a handling capacity of 18 Million TEUs by 2030.

At present, 80% of the container transhipment are from India and the balance are from other countries in the region. To help unleash the Colombo port’s actual potential and create a suitable business culture to secure greater investment, the government of Sri Lanka has also taken great strides in introducing the port city concept, allowing the expansion of Colombo port operations in a more commercially promising manner.

The port of Hambantota as the next best cargo handling sea port of Sri Lanka is gaining precedence as a lucrative window of connectivity and would eventually become a value addition to the Sri Lankan maritime sector, for the capacity it harbours to function as a multi-services hub. Moreover this port is located close to the major international east-west shipping route and well positioned along the maritime gateway to the sea lines of communication and creates good business opportunities for providing bunkering services, conducting Ro Ro operations, extending oil and gas drill ship layup services, in addition to carrying out usual port functions. The construction of container terminals are in progress within identified port areas.

The Eastern coastal belt’s geographic conditions have indeed provided the Trincomalee harbour with greater advantage to become the second best natural harbour in the world. Trincomalee was initially identified to cater for bulk and break bulk cargo handling and for carrying out port related industrial activities related to heavy industries, tourism and agriculture. The anticipated transformation, which is in progress as an undertaking initiated by the SLPA, is expected to convert the port of Trincomalee to a strategic port and an industrial hub, which the present government is closely working on. Furthermore Galle and Kankesanthurai ports as locations holding great economic value, will be developed for commercial purposes as well as for promoting tourism internationally.

Regional connectivity comes in many forms and fostering a multimodal transport system within nations and between nations that have easy road and rail access, may certainly complement the operations of the maritime activity chain. Growing support extended through various modes of transportation which includes air, road and rail connectivity channels is becoming an added advantage. In this context, Sri Lanka holds the advantage of having the highest road density in South Asia, connecting all major seaports to airports such as the Colombo and Mattala airports, through well laid out infrastructure.

Nevertheless, building maritime connectivity often requires the introduction and practice of diversified and innovative strategies that may help strengthen and widen the activity sphere offering better trade opportunities. However, Sri Lanka is also making efforts to emerge victories on such grounds, by making efforts to step into diversified off-shore business domains. Undertaking off-shore hydrocarbon exploration operations, off-shore green hydrogen sourcing and off-shore wind farming are such branches of trade activity, which the government of Sri Lanka is presently setting plans to venture into.

Furthermore it is the firm conviction of the Government that both “diversification and diversity” are much needed components of change, which should be tapped rightly to boost trade activity. The introduction of smart port concepts and virtual platforms as an interface to carryout regional maritime operations and other trade related ventures, can also be considered as agents of change, drawing together nations to synchronise their time bound tasks and work in union.

As gauged by regional nations, advancements that take place within the maritime domain will often bring in the necessity to keep intact the regional maritime security network, which becomes the basis for promoting both security cooperation and trade alliances within the region. Therefore, further strengthening regional maritime security information sharing systems and practicing well-tailored off ashore disaster response management strategies would remain essential. This may very well imply that the sea lines of communication in the Indo Pacific region and the lifelines of global commerce must be open for peaceful use, while safeguarding the interests of regional nations and protecting the rights of seafarers.

However Sri Lanka as a neighbouring nation in the Indo-pacific region holding long standing partnerships within the regional maritime sector along multi-faceted pathways, is certainly committed to extending its fullest corporation in collaborating with all purposeful movements initiated by the Indo-pacific region towards leveraging maritime sector operations, as a critical factor for attaining self-reliance by regional nations.