Maritime Asia as the Foundation of a New Economic Era

by Ambassador Carlos C. Salinas
Philippine Ambassador to Spain, Chairman and CEO, Philippine Transmarine Carriers, Inc. and Chairman, Filipino Shipowners’ Association
(Speech delivered during the 11th LSM Manning & Training Conference, November 18, 2010)
Philippine ambassador to Spain Carlos Salinas (right) taking his Oath of Office before President Benigno C. Aquino in Malacanang.

Philippine ambassador to Spain Carlos Salinas (right) taking his Oath of Office before President Benigno C. Aquino in Malacanang.

In the aftermath of the global financial crisis observers note that the center of gravity of the world economy has shifted to the Asian hemisphere. The successful navigation by China, India and the ASEAN region through the worst of the financial storm has entrenched Asia as the arena for economic prosperity in the next two to three decades. But while this may apparently be a sign of better economic prospects for Asians, other analysts believe that this is not necessarily the portent of a better future. The problem, some of them note, is that the shift is mainly about economic activity, rather than economic power. Asian regions continue to be challenged by concerns on population growth, income distribution, and social-economic infrastructure, among others. Positive economic growth alone will not be enough to answer the basic question every Asian citizen asks: is my life, and that of my family, going to be any better?

This is the same fundamental question that drives every seafarer in this region to endure the difficult life at sea. It is what motivates him to seek a career onboard – the potential to earn a living for his extended family – to put his children through school, build a better home, and possibly establish some basic business for the longer term. As the Year of the Seafarer enters its final quarter, it is a question that is worthy of our consideration at this conference.

The Year of the Seafarer was declared in order to “encourage due recognition of the critical work performed by the world’s one and a quarter million seafarers,” upon whom the functioning of the world economy depends. To accomplish this objective, the International Maritime Organization and the International Shipping Federation undertook significant information campaigns to drum up interest in the maritime labour sector. The IMO’s “Go to Sea” campaign and the ISF’s “Careers in International Shipping” DVD and website provided the core of a coordinated international effort to draw attention to a seafaring career and hopefully attract quality resources into the ranks.

This year, 2010, BIMCO and ISF again undertook its quintes­sential manpower study to forecast developments in the coming decade. International regulation through the IMO, especially the International Safety Management Code centering on ship safety and environmental protection, saw an overall improvement in the performance of the industry despite a significant growth in the world fleet.

A major milestone was reached with the adoption of the Manila amendments to the STCW Convention at the diplomatic confer­ence here in the Philippines last June. It was the first major revi­sion of the STCW after the implementation of reforms that saw the establishment of a truly global standard for education and training. This follows on the heels of the adoption in 2006 of the ILO Mari­time Labour Convention, likewise the product of another major diplomatic effort, which is now awaiting the accumulation of the necessary ratifications.

With these developments, it cannot be denied that the international community has exerted a significant amount of effort to improve both the contemporary image and working conditions of the or­dinary seafarer at sea. Indeed, we in the industry have cause for satisfaction that we have been doing our part to improve the status of our seafarers. However, we have not done enough. There is still much more we can do.

The reason why we must keep pushing is for the long-term sustain­ability and growth of our industry. Unlike the traditional business approach of yesteryears, we have come to realize that our future is inextricably linked to the continued welfare and stability of our global maritime professionals. The maturation of the internation­al labour market has created many new challenges and taught us many new lessons. And one of the most important lessons that we have seen is that quality service comes only when connected with the assurance of security, welfare and well-being.

Linking various themes

Back in the 2006 LSM Conference, I suggested the need, as a matter of corporate social responsibility, for our companies to in­corporate the welfare of our employees, their families, and their communities in our core business concerns. This was intended to promote a closer integration of our respective businesses with our Communities. The following year, I re-emphasized the integral link between quality seafaring and operational excellence, and the motivation that comes from the security of one’s future. As we have seen across various sectors, there is tremendous synergy that can be harnessed by companies and employees working together towards the common good of the industry and community within which they operate.

As we enter the so-called Asian Decade, it is timely to again speak along the same lines, but from a perspective not only of corporate social responsibility, but of industrial social responsibility. I would like us to consider the synergy that may be established by harness­ing our entire industry toward the development and strengthening of national and regional economies.

The seafaring sector is one of the important components of the maritime industry, the others being ships, ports, and services. These components function through an organic web of manage­rial, financial, and material linkages. We who have been engaged in the seafaring sector for many years have naturally concentrated on our own piece of the pie. The evolution of seafaring as the first globally outsourced industry has led us to such an advanced stage of trans-national alliances between schools, crew managers, and Principals. These mutually beneficial arrangements have without a doubt enabled stakeholders to strategically position themselves for long-term sustainability and growth.

Imagine, then, if we could apply that same synergy to not just a few institutions and companies, but to an entire industry spread across a regional economy. This, I believe, is key to the growth and development of the economies of Maritime Asia. One of the reasons why integrated shipping industries have become key con­tributors to national economy has been their ability to evolve ancil­lary and spin-off services and industries. Growth is not limited to just the core components.

Today Singapore, Hong Kong, Japan, and South Korea serve as the best examples of how maritime industries can be engines of national economic growth. These regional powerhouses have har­nessed their respective industries by playing on their strengths: the first two – on their strategic locations -and the latter on their indus­trial and technological complexes. These countries have correctly identified and invested in their respective maritime sectors which as a result, have played significant roles in their national economic development.

For an Asian developing country like the Philippines, seafarers remain the main economic resource and driver. However, much more can be achieved if this resource is directed toward evolving complimentary economic activities within the Philippine maritime industry. To achieve such added gains will require sustained and deliberate partnerships between the government and the private sector. This effort should in turn be coordinated on a regional level to allow countries with different strengths to help each other.

A proposed blueprint

To realize such opportunities, first, we should encourage a shift to Asia, of not only economic activity, but also of economic policy and decision-making. We should look beyond being the leading provider of seafarers, and instead, take our place as responsible leaders in global maritime affairs. We must take a more com­prehensive approach to national, regional, and global economic growth. We must engage in proactive participation in international organizations and conferences to bring forth the Asian voice. The recent Manila STCW conference marks the recognition of Asia’s current importance as a seafaring hub and its growing influence in the global maritime arena. Let us continue to build on this mo­mentum.

Second, concurrently with the acceptance of our region’s leading economic role, we should also try to turn our respective member economies into leading places of maritime business. We should produce not only quality seafaring; we should also establish qual­ity flags. This means turning our attention from the people who man the ships, to the ships themselves.

For decades, the IMO has expended an enormous amount of ef­fort to establish international standards on the safety and quality of ships. The implementation of such standards, however, is left to the discretion of each member country.

A quality flag depends on an effective maritime regulatory struc­ture that balances the industry’s traditional means of self-regula­tion with government’s policies. We need to keep working on that balance, through constant review and implementation of govern­mental reforms coupled with industry best practices. With a quality flag in place, we should then expand our business opportunities by diversifying beyond the seafaring sector into shipping, ports, and ancillary services sectors of our respective countries, effectively making ourselves the best place to conduct maritime business af­fairs. After all, the requisite human resources are already located here. What should follow is harmonizing the managerial and regu­latory resources within the country and the region to provide the necessary environment for true leadership status.

Here in the Philippines, for example, we recently initiated an effort to review our old maritime laws so that they may be repositioned at par with international standards. The proposed legislation aims to transform the Philippines into an attractive ship registry which will result in increased revenues for the government, gainful employ­ment for Filipinos, on and offshore business opportunities and an overall conducive maritime climate in the country.

Third, with the development of an internationally-compliant flag State administration, we should then move toward the integration of the regional maritime economy. The diversity of geographic, in in­dustrial, social, and economic opportunities within the Asian mari­time region will undoubtedly support the growth of all its member States.

As the regional maritime economy grows, this will in turn pave the way for the conscious cultivation of various areas that are still developing in Asia.

A model that we might look to is European aviation and its flagship – Airbus Industries, which is an example of a regionally-coordinat­ed economic industry that tries to balance the public interest in the distribution of economic activities and benefits against the market forces of competition and capital mobility. Economic and business experts can probably point to other more appropriate models; how­ever, the important thing is that in the global economy, un-bridled competition is no longer the key to success, but rather alignment of interests and goals.

Conclusion

If we wish seafaring to grow as a career and business opportunity in Asia, then the opportunities which play an integral role in this industry should continue to be further developed in Asia. We have the people, and much of the hardware, but we should also have the businesses. Unless the industry is firmly entrenched in the region, the present and future generations of seafarers will not see the mar­itime industry as a long-term option; it will remain merely a place to temporarily “visit” and earn some money before moving on to other endeavors. In others words, seafarers will tend to see this as a “job at sea,” rather than a “career in the shipping industry.”

Maritime Asia should not only be about a workplace, it must also be about a home. It should be about enabling Asian seafarers to have the opportunity to establish a better quality of social and eco­nomic life in their own surroundings. This can only be achieved if our respective countries create the enabling conditions, through an appropriate mixture of government reforms and private sector ini­tiatives that would provide to every new cadet and every senior a far reaching career in a whole dynamic industry that is shipping.

We know that this is Asia’s time. Can Asians with diverse histori­cal backgrounds and long-standing national traditions and values, make a difference in the way our economy works and distribute its impacts and benefits within our region? At the 17th ASEAN summit in Vietnam, President Benigno Aquino III pronounced his commitment to “make the Philippines a predictable and consistent place for investment and a reliable member of the international community,” and to “work with fellow member states of ASEAN to harmonize the country’s interests with the country’s regional responsibilities.”

Our maritime heritage has historically been the base of many of our common cultural community-centered values; in the ASEAN region, we even chose to make this the basis of our unity and diplo­macy. It is my sincere hope, therefore, and a continuing challenge to all of us that these common bonds be the foundation for the economic future of Maritime Asia.

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