Harakiri

That the predictions some of us have made, over the years, on China’s exponentially growing influence in the commercial maritime space have come true is no consolation to the many beleaguered  Indian shipping companies on the verge of bankruptcy. Or to me, who writes this piece in some despair. The gap between Chinese and Indian merchant shipbuilding and shipowning businesses was less apparent in the boom years, when a rising tide lifted all boats and every shipmanager and shipowner looked smartly visionary, and where every government could hide its many incompetencies easily. However, Indian maritime weaknesses have been laid bare - and badly- since, with the mini-collapse of markets across the world. We are naked, and it is cold.

A ‘Future of Shipping’ poll conducted recently by a maritime magazine has seen two thirds of the respondents agreeing that China will overtake countries like Greece and Japan and become the country with the most merchant ships in the world by 2020.

Now this is just one poll and its results- essentially opinions and predictions- are hardly guaranteed to happen in reality.  But that is not the point; whether China becomes the largest shipowning nation or not in six years is actually immaterial to Indian shipping. The point is that China is already a global commercial maritime power, and that the gap between the Chinese and Indian maritime industries is already near insurmountable. And this gap will widen rapidly with each passing year. It will make Indian shipping less and less relevant, even if it survives. 

The hand-wringers amongst us- and they are many- will say that China started its reforms decades before us, that it is not hampered by the clamour of democracy and that it is already too late- the race is already lost. While they may be correct on all counts, India must get its act together anyway, and quickly. For one, giving up the race now will mean ceding to China- a rival, even a future enemy-  and handing it everything on a platter. For another, our shipping is exposed and open to being overtaken by other smaller developing economies. And finally, India must get its maritime act together because otherwise its maritime industry will be decimated by overwhelming Chinese power. It is clear and logical that Indian shipping will be utterly destroyed if this trend continues.

As the Chinese fleet grows, it will continue to employ its own nationals, not Indians. Its ships will carry Indian cargo. China will spawn its own management companies and increase the depth of ownership at the expense of Indian shipping. I will not dwell on the geopolitical implications of expanding Chinese maritime power too much here except to point out that a rival country already allied with a neighbouring foe and which has encircled India will naturally be antagonistic to any Indian interests, including commercial or geopolitical. It is one thing to be overtaken, quite another to be threatened with annihilation. India will feel massive pressure wherever it has strategic interests, but particularly in its own Indian Ocean, Africa and in regions that it presently sources oil and other resources from. 

That aside, we can actually learn from China, where successive administrations have managed, overall, a pretty blistering pace of reform in the maritime space. China has shown that concerted and long term planning shows results when it is backed by government support and the will to execute. It has pumped in resources to shipbuilding and shipowning- the two big pillars. It has, despite some pretty endemic corruption akin to India’s, executed on its plans. India cannot go down its old path of anaemic policy making, lazy implementation and third-rate execution much longer. It needs to learn from the Chinese.

Then, China has pumped hundreds of millions of dollars into its education system (including, importantly, its vocational education system) and billions into R&D initiatives across industry. India cannot match this, but it must allocate handsomely towards manpower development and education. It must promote excellent vocational schools; tertiary benefits will include a much better calibre of seagoing personnel.

Support to shipowners- the much discussed level playing field- is actually a smaller issue and relatively easily done. Policy must be pragmatic and consistent, and, equally critically, must be quickly translated into action. Policy makers need to show some will here, and some spine, for once. 

Unfortunately, I do not see  much evidence in India of the realisation that its maritime space is likely to fall so far behind the Chinese within the next few years that the industry’s very survival will be at stake. That realisation is the first step on a long road, where winning and losing is important, sure, but where accepting that one is not even a player in the game is harakiri.  

.

.