In The Press
The Port City we need

-Better economic governance, not giveaways should be the focus of the new governance zone
By Resident Fellows of the Advocata Institute
Deng Xiaoping China’s great reform leader, faced a serious problem in the 1970s. Thousands of young Chinese were crossing to Hong Kong risking their lives. Rather than cracking down on the migrants, Deng sought to understand why they were migrating. Clearly the economic opportunities in Hong Kong were greater than in mainland China.
Deng was also impressed by the rapid rise of the some Asian economies, in particular the modernisation of Singapore. Singaporeans, like the residents of Hong Kong, were majority Chinese by descent and had even less natural resources. How did they achieve something that China couldn’t?
The answer was that these countries had better rules, better incentives, and better economic governance systems. Deng knew he needed to ‘reboot’ China with reforms that allowed markets to coordinate economic activity, protect private property, and allow for Foreign Direct Investment- radical reforms in communist China at the time.
He also knew that implementing these reforms in the entirety of the country would be a nonstarter. Entrenched interests who benefit from the status quo would fight to keep the existing order. To solve this, China demarcated the Shenzhen area as a special governance zone and implemented a new – more open – economic system. This was the start of the Special Economic Zones (SEZs) in China. It was promoted as a laboratory to experiment with market principles to serve “socialism”.
The results are astounding. In the past 40 years Shenzhen has been transformed from a fishing town of less than 30,000 to the third largest and rapidly growing city in China. The population of Shenzhen has grown to more than 12 million residents. In 2018, the economy of Shenzhen was $ 366 billion, four times that of Sri Lanka. Many more SEZs now exist in China and around the world.
Sri Lanka’s problem
In some ways, Deng’s problem is now Sri Lanka’s problem. To be sure, emigration out of Sri Lanka is not as severe as it was in 1970s China. Sri Lanka’s business environment is also not as bad as the Chinese system at that time. Yet market based reforms started in 1977 have all but stalled.
Like China, in “mainland Sri Lanka” too an entrenched elite who benefit from the existing system lobby to maintain the status quo. The result is that very little progress has been made over the last 15 years on reforms necessary to boost economic growth. After a brief post-war spurt between 2010-2012, economic growth slumped and has remained stagnant.
This is visible in Sri Lanka’s low scores on various rankings that measure the efficiency of the business environment. In the World Bank’s influential Ease of Doing Business report, Sri Lanka is ranked 99 out of 190 jurisdictions. The country has fallen behind countries like India, Bhutan and Nepal, having once been an early economic reformer in the region.
Governance system
Take the legal system, where Sri Lanka is one of the worst performers in the world. In contract enforcement, the World Bank ranks Sri Lanka 164 out of 190, taking on average nearly four years to enforce a contract. In Singapore, it takes just over five months. It’s no wonder that foreign investors prefer easier destinations to deploy their capital. Delayed enforcement is lost money.
This should be the logic for the Colombo Port City. Poor governance is a barrier to growth in many developing countries but implementing broad reform for better governance is extremely difficult. The idea is that by building special governance zones, governments could adopt completely new systems that overcome the problems that exist in the rest of the country. These zones would operate like “one stop shops” with pre-approvals and fast-tracked court systems, making doing business easier and hopefully attract foreign investment.
Special zones are not new in Sri Lanka. Much of Sri Lanka’s export industry resides in the country’s dozen or so Free Trade Zones. Colombo Port City is different by virtue of being the first special zone managed by an international operator. Unlike the FTZs, the focus is on white collar jobs and financial services instead of manufacturing exports.
It also has a broader remit- the proposed legal structure lists seven laws that don’t apply to Port City, and a further 14 that could be exempted in the area by the proposed oversight body. The Port City masterplan promises world class living facilities, entertainment, financial services, and business.
Yet Port City’s success, and indeed its importance to the country, will only depend on its ability to provide a superior governance system. To be a success Port City will need to guarantee greater economic freedoms to its investors, have an efficient legal system with clear and predictable laws, and decisions based on precedent. It needs to minimise discretion of the commissioners and have a fair and transparent regulatory structure. These are the critical features that have made several small cities like Hong Kong and Singapore prosper. Basically, rule of law should apply and prevail.
This is the Port City we need. A better governance zone that can attract FDI, skilled people, spread knowhow, and serve as a lab for policy experiments. Get this right, and Port City could create positive spillover effects for the rest of the country in terms of economic opportunity and hopefully scale some of the more open policies in the enclave.
What of the Port City we will get? In the coming weeks, the country will debate whether the specific provisions in the Port Bill are prudent. The Supreme Court is already hearing 19 petitions that challenge its constitutionality. Like any project of this nature, there are also political and economic risks that need to be considered.
Managing the geopolitical risk is going to be an enduring challenge in Sri Lanka. Here there are no easy answers, except professional management of our foreign affairs and dealings. Big picture thinking is needed instead of the current win/lose mindset and transactional diplomacy.
Economic distortions
Another risk is in the domain of economic distortions. Unlike in Shenzhen which was conveniently located far from the commercial centres at the time, Port City is on the doorstep of Sri Lanka’s capital. After the operation of the Port City, life as a businessperson could be very different depending on which side of the Chaithya Road your business is situated. You may be competing for the same resources but face very different rules and taxes. The latter is a deeper malaise.Already stretched for revenue to cover even its debt obligations, the Port City may prove to be a leakage point of taxes for the State. Finally, given its proximity to Colombo, there is a risk of capture of the regulatory framework of the same elite who have secured rents for themselves in the existing system. It’s no accident that successful SEZs tend to be away from the established power centres, such as Shenzhen was to Beijing.
Only good rules, predictable policies, and oversight can overcome these challenges. A focus on better governance rather than tax breaks and giveaways would help keep the house in order.
It would obviously be better for the entire country to be governed by better rules and efficient systems that enhance ease of doing business. Given its size and scope, the Port City cannot perform miracles, but we can hope that Port City would be a catalyst in bringing about some of these changes to the country proper.
The project itself is an admission of failure in governance. Even when Sri Lankan leaders know what to do, a combination of backward ideology, political opportunism, vested interests, and lack of State capacity seem to hold back the vital growth oriented reforms. It is these reforms that are needed to expand economic opportunities for all Sri Lankans.
The Port City can give the country a shortcut to attract foreign investments, provided it focuses on the right thing – better economic governance.
- Port City Colombo Commission Act - Special Economic Zone
- Colombo Port City: Wake up, dream on to reality – Part 1
- Stock Exchange signs MoU with CHEC Port City Colombo
- Port City Commission will act without fear or favour
- Colombo Port City clears first hurdle
- The SL state’s enduring role in the CHEC Port City Colombo project
- Port City Colombo donates 20 laptop computers to the Colombo Municipal Council for use at vaccination centers
- Port City Colombo donates high flow oxygen therapy machines to aid the battle against COVID-19
- Port City a hub for regional growth
- Sri Lanka – the Ideal Investment Destination
- Litigation against Sri Lankan parties will happen as usual within Port City
- Port City Would Increase SL’s Share in Modern Services - Aluwihare
- Colombo Port City blitz at NY Times Square
- President appoints three young private sector leaders to Port City Commission
- Gamini Marapana, PC, to head Port City Commission
- Port City Colombo donates PPE worth Rs. 2 mn to support cleanup of ship fire debris
- Colombo Port City Economic Commission Bill comes into force
- Two-thirds NOD for Port City Bill
- Port City Colombo invites local, global companies to set foot on ‘Gateway to South Asia’
- Parliament passage for Port City
- Biz tycoon Harry J visits Colombo Port City
- The Energing International Legal Landscape and Unprecedented Opportunities for Young Lawyers
- Investor’s paradise at Port City Colombo
- Colombo Port City vs Dubai International Financial Centre
- Key to greater FDI and development - (PART II)
- Way forward for the proposed Colombo Port City Economic Commission Bill
- Key to greater FDI and development
- Colombo Port City - Sri Lanka’s portal to the global financial economy
- South Asia to remain fastest growing region- ADB
- Like Singapore to ASEAN and Hong Kong to China, Colombo Port City is gateway to South Asia
- Colombo Port City, a Special Economic Zone
- Work of region’s most modern int’l Yacht Marina complete
- Work of region’s most modern int’l Yacht Marina complete
- ICCSL says Port City will be significant for Sri Lanka
- The Port City we need
- Book launch of ‘Foreign Policy Perspectives- Port City Colombo and International Financial Centre’
- Colombo Port City Economic Commission Bill presented to Parliament
- Govt. gazettes Colombo Port City Economic Commission Bill
- Project company welcomes Cabinet approval to establish Special Economic Zone at Port City
- Top Russian billionaire visits Colombo Port City
- Rs. 1 million worth school bags to 1,000 students in Monaragala from Port City Colombo
- Port City Colombo donates PCR equipment and testing kits valued at over Rs. 20 million, aiding the fight against COVID-19
- Port City – Colombo attracts world’s top investor Nathaniel Rothschild
- Cabinet gives approval to draft Colombo Ports Commission Bill
- Colombo Port City Special Economic Zone to break ground in mid-2021
- Browns and CHEC join forces for $ 450 m CIFC
- Port City Colombo's Competition Winners
- Raja Edirisuriya appointed new Executive Project Management Director for Port City
- Envision the Future - Local Designs with Global Identity – Port City Colombo announces the finalists for Sculpture Design Competitions
- China-funded Colombo Port City good example of public-private partnership: Sri Lankan minister
- Gotabaya brings National Priority Program under Presidential Secretariat
- Port City Colombo wins Global Best Project at 8th ENR Annual Awards
- Govt. Assures Law for Port City Will be Ready by 2020 end – Head of Strategy CHEC Port City, Tulci Aluwihare
- Colombo Port City, generator for Sri Lanka's future economic development
- Sri Lankan PM visits Chinese-built Colombo port
- Sri Lankan PM tours Port City, eyeing rosy future
- Port City will generate over 83,000 jobs - PM
- PM tours Colombo Port City Project on its 6th anniversary
- Best Project, Airport/Port Colombo Port City Development Project Phase 1
- Port City not only for Chinese investments – State Minister Tharaka Balasuriya
- Port City attracts int’l service oriented brands
- Huge demand for CIFC in region
- Colombo Port City and the big picture of US sanctions on Chinese firms
- Chinese builder says US blacklisting has no impact on Port City
- Chinese builder says US blacklisting has no impact on Port City
- A legislative design to attract investors to the Port City and CIFC after COVID-19
- PORT CITY TAKES SHAPE
- Colombo International Financial Centre Bill expected to be presented to Cabinet shortly
- Belgium, Singapore, Japan and Korea signal willingness to invest in Port City
- Port City Colombo Launches A Design Competition For A Beach Sculpture And An Interactive Wall
- Port City Colombo invites university students for remarkable competition
- Work on 10 Colombo Port City bridges expedited
- Port City review committee hands over final report to PM
- Port City SEZ laws ready by year end
- Cabinet approves $ 1 b project for Port City
- Public recreational area of Port City to open next year
- Port City to resume construction in full swing from mid-July
- Project company to pump in additional US $ 1bn to Port City
- Special Laws for Port City by Year-End - CHEC Strategy Head
- Port City will put SL on the map for services exports - Wignaraja
- Daily cleaning programme for Lassana Werala
- Chinese President Xi calls for President Gotabaya Rajapaksa
- Lanka’s post COVID-19 economy will boost with FDI influx - Bandula
- Business reopens to a world of new challenges
- The Belt and Road - Beyond the Debt Trap Discussion
- Lanterns sway in Sri Lanka's Port City Colombo on Vesak Day
- Is the 'Health Silk Road' a 'debt-trap' of China's BRI for Sri Lanka?
- Port City Colombo provides protective gear worth over Rs. 6 m to personnel in essential services
- No more trips to Singapore for arbitration
- Colombo Port City - Competing with international financial centres
- Port City could have US $ 4.6bn positive impact on SL’s BOP - PwC study
- Port City land likely to be priced above Rs.13mn per perch- PwC report
- Port City Colombo project sees rapid progress - Artificial beach to open in August
- International road shows to promote Port City
- Port City’s first overseas launch in Singapore this July
- New authority under President considered for Port City
- President makes observation visit to Colombo Port City
- CILT members visit CHEC Port City
- Chinese intellectual says cultural values drive Belt & Road Initiative
- Private sector wants govt. to play facilitator to fully harness BRI potential
- China built Port City in Colombo invests US$800mn, marina on track
- Port City creates social value for Sri Lankans
- Colombo Port City geared to key investments
- Port City unveils inaugural Social Responsibility report
- Port City marketing campaign likely after May
- New Banking Act from 2021
- Port City Colombo launches year-long project to clean-up Sri Lankan beaches
- Port City Colombo commits to maintain a cleaner beach
- Port City Colombo to welcome 2020 with captivating fireworks display
- Feature - Colombo Port City workers take pride in creating new land for Sri Lanka
- Port City Stamped into the Urban Fabric of Sri Lanka
- Port City opens for investors
- Sri Lanka to firmly support, accelerate Port City development-PM
- Professor Chandra Embuldeniya says, the Colombo Port City will become a “vital economic centre” in the region
- Interview- New Sri Lankan gov't ready to cement friendship with China, says PM
- Colombo Port City opens
- Port City to light up skies, as it becomes part of Sri Lanka
- Sri Lanka needs modern laws to bring investments to Port City- Basil
- Port City Colombo signs MOU with NSBM Green University Town for industry partnership programme
- Colombo Port City has potential to become most advanced smart city in Asia- Hans
- Top architect calls for urgent measures to revitalise Colombo Fort to integrate with Port City
- Right policies, incentives key to tap transformative power of Port City, says real estate expert
- Port City now fully Sri Lankan owned - Tenders called for int’l meeting hall, school, hospital
- Colombo Port City land officially vested in Sri Lanka's Urban Development Authority
- Sri Lanka makes case for foreign investment
- Port City land sales to begin first half of next year
- Colombo Port City celebrates Children’s Day
- Port City could be game changer - Malaysian property leader
- Lord Naseby visits Colombo Port City
- Private sector insights to connecting dots in Sri Lanka’s development journey
- Learning Chinese language and culture through the Mid-Autumn or Moon Festival
- Construction of first elevated highway from Colombo Port City begins
- Port City - New legislation to provide titles for lands
- Sri Lanka to call investors for convention hotel, hospital on China reclaimed land
- CIFC draft law to be submitted to Cabinet this month
- Port City to transform condominium living
- Colombo Port City declared as urban development area under UDA
- Special Port City Law in final stage - Dr. Harsha De Silva
- Colombo’s property value to rocket following completion of mega project
- Colombo Port City Infrastructure development to be completed by mid next year
- Traders advised to invest in CHEC Port City Colombo
- Advantages of SL's Port City
- The green way to live
- Spotlight- Sri Lanka eyes int'l market opportunities in Colombo Port City
- Port City now part of Colombo District
- Port City now part of Colombo District
- Sri Lanka's Parliament approves mega Port City as part of island country's capital
- Laws to amalgamate Port City to Colombo
- Port City completes Rs. 500 m livelihood support program
- Liang Thow Ming speaks at Members Meet
- CHEC motors ahead on Port City after Easter attacks
- Sri Lankan youth win at ‘Silk Road & Young Dreams’ music competition
- Mega project aims to transform city into global center
- Separate Legislations on Port City by mid May
- Port City gets ISO 9001:2015 certification
- PM visits Port City
- Tax and policy incentives for Port City soon
- New entity to handle Port City land sales
- Port City to become catalyst for banking sector to reach Rs.30tn in assets by 2025
- Colombo Port City - Bidding process to be completed by May
- A new City in the making
- Sri Lanka’s China funded Port City completes land reclamation amounting to 269 hectares
- Port City is here for all!
- Colombo Port City land sales to begin from June onwards
- Port City sponsors book on social etiquette
- Port City Development Project SL Govt would have to invest in infrastructure facilities – Megapolis Minister
- Colombo, a world class ‘Smart City’ soon
- Sri Lanka is building a $15 billion metropolis meant to rival cities like Hong Kong and Dubai
- Sri Lanka’s Chinese backed US $ 1.4 Bn, 665 Acre Port City could be Governed by Own Legal System – Report
- Sri Lanka ‘Port City’ marine construction work over by mid-2019
- Financial City legislation to be presented to parliament this year
- China-built Sri Lanka ‘Port City’ aims to lure Indian investors
- Govt. to invest $ 1 b on utility services in Port City
- Colombo Port City catalyst for future development-RIU
- Port City land reclamation to conclude by June next year
- Port City’s Fishermen Livelihood Support Society Gifts Rs. 16 million To 8 Village Fishery Associations in Negombo and Wattala
- Port City Dredger rescues drowning deep sea fishermen
- A future hub for trade and logistics in the Indian subcontinent
- Port City to give new facelift to Colombo
- Right of Reply by Megapolis Ministry The consequences of building Port City
- Sri Lanka releases new map with China-backed port city projects
- New Colombo map released
- Port City funds dansala in Kepungoda
- Feature: Hearts bound together, city built together -- China, Sri Lanka co-develop Colombo Port City
- Port City to create 83,000 jobs for Lankans
- Sri Lanka's China-backed Port City Sees Up To $4 Billion Investment Interest
- Standard Chartered Bullish On Port City Investments
- Urbanisation – A strategy to increase GDP
- Reclaimed Port City Ready To Reap Results
- Colombo Port City journey begins with the unveiling of DCR
- Port City unveils roadmap to prosperity
- Development Control Regulations of CPC released
- Port City and the future of Sri Lanka
- The city of yours Future is rising.
History is Looking at you for a name. - Response of CHEC Port City Colombo (Pvt) Ltd
- Financial City never sleeps
- Investment opportunities in Colombo Port City showcased
- Sri Lanka’s special Port City legislation to be presented soon
- Colombo will not sink due to Port City: Ranawaka
- Renovated community centre for Negombo fishing community
- Sri Lanka signs two MOUs with China for building complex in Port City, underground Marine Drive
- Sri Lanka signs two MOUs with China for building complex in Port City, underground Marine Drive
- Port City Where are we now?
- Port City reclamation to be completed by 1Q - 2019
- Port City construction in full swing
- Construction of three towers at Colombo Port City to begin soon
- Port City legislation to Parliament in March
- PM visits Port City
- Underground sea road: Study to be completed by March 2018
- Cabinet nod for $ 1 b financial city complex
- Govt. green-lights PPP for Port City tunnel link
- The Port City Project: Where Things Stand Now
- Govt. green-lights PPP for Port City tunnel link
- Green port city, with solar and wind power
- SLLRDC officials make tour on board Port City dredger
- Port City: Measures proposed to reduce air and noise pollution
- Negombo lagoon gets facelift
- Port City Project sustainability beyond philanthropy
- President’s Chief of Staff visits Port City Colombo
- Port City investor pumps in $1bn for Financial City complex
- Of NGOs, civil society and investors at large
- Building paradise: Houliang Jiang, MD of CHEC Port City Colombo
- Port City Colombo sponsors island-wide beach clean-up
- About 6.4 MT waste emptied to oceans yearly: Amaraweera
- Best of all cities
- Sri Lanka says Chinese-funded port city project to attract 1 bln USD of investment in next stage
- Port City and MTI collaborate to develop Sri Lankan entrepreneurship
- Government agencies review Port City progress
- Colombo Port City: Designing And Connecting Two Cities
- Port City facilitates health camps for fisher families
- Stop-Start Port City, OBOR flagship project, on again
- Colombo Port City leads with Urban Design Idea Competition
- Colombo on par with top world cities
- SOM Wins International Design Competition for Colombo Port City Master Plan in Sri Lanka
- Enclaves Of Elegance And Charm
- Over 45 percent of reclamation work completed
- Real Estate Plays Major Role In Sri Lanka’s Growth - Jll Report
- Nara To Monitor Aquatic Resources In Port City
- ‘One Belt, One Road’: Potential benefits for Sri Lanka’s real estate market
- Chinese companies continue assisting Sri Lanka flood victims
- Colombo Port City to attract US$ 15 bn when complete
- Colombo Port City and Megapolis discuss LRT plans
- US firm wins design competition held for the China-funded and executed Colombo Port City
- Sri Lanka charges ahead
- Lanka sees unprecedented economic revival: PM in Beijing
- Sri Lanka PM eyes increased infrastructure investment from China: Xinhua
- Roll up sleeves and work on B&R— Story of Sanjeewa: employee of CCCC Colombo Port City project
- China to build Colombo CBD under ‘Belt and Road Initiative’
- Chinese developers of Colombo Port City look for prospective investors
- CPC To Unveil In 30 Years With Aggressive Development
- Colombo Port City will take 30 years to complete
- CHEC Port City Colombo to transform Diyawanna Lake for Vesak
- China's US$15bn reclaimed city in Sri Lanka targets investors from the West, India, Middle East
- Port City to avert excessive presence of Chinese investors
- Port City’s revamped Website offers Clarity and Transparency
- One Belt & One Road Initiative: Beyond physical infrastructure
- Ranil determined despite looming external shocks
- Financial sector needs to be future-ready to ride the next wave
- CEA Chairman goes on board Port City dredger
- China-funded Colombo Port City becoming "shining pearl of Indian Ocean"
- Colombo Port City, Sri Lanka
- Redrawing the map of Sri Lanka
- Port City In The Making
- Chinese-backed Port City in Sri Lanka to attract $13bn in investment from 2018
- Chinese-backed Port City in Sri Lanka to attract $13bn in investment from 2018
- Luxury apartments boom not a bubble
- Taking a break
- Port City facilitates workshop to improve fisher folk’s income
- Fast-changing Colombo landscape
- Science is the best outpost for attack or defense Port City Project
- MPs on inspection tour of Port City site and dredger
- Extra land for public use
- Parliament approves several orders under Strategic Development Projects Act:To grant tax exemptions to Port City Project
- New Laws for Port City – Malik Samarawickrama
- Economists, Experts Air Their Views : Port City Project
- Colombo Financial City Project: NO IMPACT ON FISHERIES INDUSTRY: NARA
- Marine life not affected by Port City Project
- Colombo Int’l Financial City work in progress
- Tax exemptions for CHEC Port City project
- Prime Minister endorses Port City
- Mark Mobius shares his mantra for Sri Lanka
- SL contemplates standby agreement with IMF-PM
- Western Region Megapolis Plan to be unveiled in Jan 2016
- Sri Lanka's Prime Minister shows green light for port city after long haul back
- Environmental report clears Colombo Port City
- Colombo Port City public usage area increased
- Port City’s public area gets wider under EIA plan
- Sri Lanka's Colombo Port City will be eco-friendly, assure constructors
- Chinese-funded port city to help generate new businesses: report
- Colombo Port City won’t cause environmental disruption, says EIA
- Chinese company notes Port City will help Lanka
- Port City to create regional business hub
- Port City To Be Expanded
- Port city project will resume under new agreement
- China, India and Hong Kong top investors in Sri Lankan real estate- Lamudi
- Colombo Port City Development Project to generate over 100,00 jobs
- Presidents launch port city project
- Chinese President Xi Jinping launches $1.4 billion Sri Lanka port city
- Colombo Port City Project Launched