Sri Lanka an ideal maritime centre for IOR-ARC

The Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC), initially known as the Indian Ocean Rim Initiative, is an international organisation with 18 member states. It was first established in Mauritius in March 1995 and formally launched on 6-7 March 1997.

The association disseminates information on trade and investment regimes, with a view of helping the region’s business community better understand the impediments to trade and investment within the region. These information exchanges have been intended to serve as a base to expand intra-regional trade.

Sri Lanka is located in the centre of the IOR-ARC member countries that is spread between South East Africa, Middle East, Asia and the continent of Australia. The regional economies are rapidly growing where a large middle income population is emerging.

It is increasingly noticeable that intra regional trade is expanding along with greater demand for distribution and shipping services. Over the next decade these economies will further expand intra regional trade with the expansion of the region as a whole.

For these emerging economies of IOR-ARC countries’ connectivity is going to be an important and an integrated part for better movement of goods and services,

Facilitating a reliable supply chain among the region and to manage intra regional logistics and distribution will be a key role that Sri Lanka could play as it connects the region through its proximity to the world’s busiest east/west shipping route with the only Indian sub continent infrastructure ports capable of handling the world’s largest ships over the coming two years.

Port of Colombo and Hambantota along with Trincomalee will provide adequate space and capacity to service the needs of the liner industry to operate as the leading distribution hub in the IOR-ARC region. The location of the country can help liners to focus the country as a relay location connecting the east and the west and could facilitate faster shipping and transit time to reach many destinations of intra regional trade of IOR-ARC nations.

If we focus on IOR-ARC traffic, we can even create new air corridors that would service the region. Currently unlike the shipping route the international major air corridors are located to the north of Sri Lanka. However, with our new aviation infrastructure in Colombo and Hambantota combined with the mega sea ports, we should be able to attract new services to handle cargo for sea-air connections as well as passenger capacity enhancement.  

The critical point for international trade today is to reduce lead time on products traded and to receive cargo on time delivery, capacity to consolidate small consignments and reach markets and destinations on time at a competitive price. Sri Lanka would be a natural location for combination of air/sea hub for such services provided we work on an integrated logistics plan.

Sri Lanka would be the ideal choice to connect South/East Africa, Indian sub continent and the Far East for all shipping services and to provide logistical support. The service span that the country could extend range from transhipment to multi country consolidation, ship supply, bunkering, passenger and cruise ship  handling and maintenance along with other logistical aspects such as storage and distribution.

Whilst the Government is now rapidly developing the sector-related infrastructure, it is important to invite local and international private sector to be major stakeholders of these services as they would have the necessary business connections/knowledge to bring in FDI for specific projects. The Government should have a close dialogue with the industry to accelerate these multi sector developments so that by the time the ports are ready, other supporting infrastructure too will be ready with private investments.

(The writer is CEO, Shippers’ Academy, Colombo.)