Wednesday, 24th September 2014
- A hub is the central part of a wheel, rotating on or with the axle, and from which the spokes radiate
Back in early 2010, I wrote about the hubs that were central to the UPFA election manifesto. At that time, the hub strategy was simply words in a manifesto. Four years later it is possible to assess progress and see what changes are needed.
Colombo is at present India’s second largest container port, with more than 70% of its volume being Indian transhipment traffic. With the opening of the region’s only deep-water facility in 2013, its position as a maritime hub was strengthened. Yet, the Colombo Port’s role in the Indian transport system is not recognised in the NTPDC Report, in contrast to that recognition in the 2003 Joint Study Group Report on the India-Sri Lanka Comprehensive Economic Partnership Agreement
Commercial hub and tourism
The commercial hub is a dud. There was a time liberalising financial markets to ahead of India could have created one, but that window closed in the 1990s.
Many call actions related to tourism an effort to create a hub, but the original formulation correctly excluded tourism. To describe tourism development as the creation of a hub stretches the metaphor beyond breaking point.
Energy hub
Little progress has been made, but it is not too late.
The priority given to electricity by the new government in New Delhi is evident from its policy statement:
The aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. It will expand the national solar mission and connect households and industries with gas-grids… By the time the nation completes 75 years of its Independence, every family will have a pucca house with water connection, toilet facilities, 24×7 electricity supply and access.
Words have been followed by action. The new PM’s first foreign visit was to Bhutan; the second was to Nepal. Securing electricity supply featured large in both.
If the Government plays its cards properly, the planned grid connector between Madurai and Anuradhapura should be achievable, the Tamil Nadu Chief Minister’s petulance notwithstanding. This is a precondition for the construction of the 500 MW coal-fired India-Sri Lanka plant in Sampur. Without a grid connector, the puny Sri Lanka system, which currently has a night-time requirement of 900 MW, cannot absorb another 500 MW of base-load power.
Nuclear energy is least harmful in terms of climate change and coal the most harmful. Why not ask the Indians to build a nuclear plant in Sampur? Living downwind of the Kudankulam and Kalpakkam nuclear facilities, we share the risks but enjoy no benefits. Let’s work with India to make all the plants, including the one in Sri Lanka, safe as could be and to give our people and environment the benefits that come from this cheap and clean technology.
Maritime and aviation hubs
The Indian National Transport Policy Development Committee (NTPDC) Report issued in early 2014 states:
The performance of Indian ports has generally deteriorated over the years except for a brief period from the late 1990s to the mid 2000s. The gap between the growth in traffic and growth of port capacity is apparently widening. Port traffic is expected to grow by about 40% from the current 914 million tons to about 1,279 million tons by the end of the 12th Plan.
Colombo is at present India’s second largest container port, with more than 70% of its volume being Indian transhipment traffic. With the opening of the region’s only deep-water facility in 2013, its position as a maritime hub was strengthened. Yet, the Colombo Port’s role in the Indian transport system is not recognised in the NTPDC Report, in contrast to that recognition in the 2003 Joint Study Group Report on the India-Sri Lanka Comprehensive Economic Partnership Agreement.
The too-early opening of the Hambantota Port was a mistake. I too was pessimistic about its prospects. However, I missed a key point: Kyaukpyu.
Kyaukpyu is the deep-water port built by the Chinese on the Rakhine coast of Myanmar, connected to already complete gas and oil pipelines that terminate in China. It has problems, the latest being suspension of the agreement to build a rail line from the port to Kunming in South Western China. Even if the rail and highway connections to Kyaukpyu get delayed, it will still attract tanker traffic.
If Kyaukpyu becomes a principal route into China, Hambantota will come into its own. Until then, the government should continue to develop it as a bulk cargo port, ensure it has adequate fresh-water supplies, and build a big refinery there so that cheap bunkering can be offered.
Colombo is already a regional aviation hub, with significant transit passenger share. The Government is moving to expand it, assuaging fears that Colombo would be squeezed to give traffic to Mattala. The next step is to incentivise a viable airline, preferably one with a strong presence in India, to adopt Colombo as a hub.
Building Mattala as a full-scale airport was a mistake, but now that it exists, use should be made of it. It can serve as an air-freight hub for the region.
Knowledge hub
Most progress has been achieved on this thrust, measured by the export revenues and numbers of jobs created by the IT and BPM [Business Process Management] sectors. But progress is needed on the foundational resource: a knowledgeable work force.
Significant improvements have been achieved in tertiary and higher education. These are not limited to simple increases in numbers graduated; attitudinal change has been achieved. Entrepreneurship is no longer an alien concept in some of our universities.
Much more needs to be done on building a smart workforce. Only the University of Central Lancashire, hardly a leading university brand, has been attracted by the Government’s offers of 15-year tax holidays and free land. Innovations such as India’s Ashoka University have not emerged. The poor quality of university teachers remains to be addressed.
In conclusion
A hub is the central part of a wheel, rotating on or with the axle, and from which the spokes radiate. Its significance lies in its relationship to the rest of the wheel. The wheel, not the hub, is the unit of analysis.
In the same way, the metaphorical hubs of the government’s economic strategy cannot be implemented without taking the “rest of the wheel” into account. As long as our thinking does not transcend this little island of 20 million people, the chances of success are limited. As long as we do not understand that hub strategy necessarily involves two-way flows that benefit all parts of the system, success can only be partial and will depend on happenstance.
Before ‘Mahinda Chinthana’ and without any formal strategising possibly other than inside Lalith Athulathmudali’s head, Colombo was a maritime hub. What the explicit strategy could have done was lock in that status with win-win arrangements under the Comprehensive Economic Partnership Agreement with India. Now its continuance depends on factors outside Sri Lanka’s control, such as the timely and efficient building of two or three mega ports on each coast of India as recommended by the NTPDC. Similarly, the success of Hambantota depends on the success of Kyaukpyu.
We still have time to conceptualise our hub strategies correctly. The first and most important step is to free ourselves from obsolete insular mindsets.
From : http://www.ft.lk/2014/09/24/sri-lankas-hub-strategies-reassessed/
