TNAG-1038-FCO40-1288-Future-of-Hong-Kong-1981 — Page 47

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are suspect simply because they are encumbered with relatively fewer regulations than the more traditional flags. It is interesting to note that the reaction to the phasing out ideas is not only coming from the people who now use Flags-of-Convenience (and therefore naturally have a vested interest) but also from shipping interests in traditional maritime countries who have found that flagging out is sometimes the only viable alternative to going out of business !

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Unctad's efforts are ostensibly directed toward helping the developing world. In shipping, the developing world has, surprisingly, done very well and INTER TANKO studies have shown that the annual growth rates for tanker fleets in the 10 largest third world maritime nations have been 17.6

per cent on average for the period 1970-80. This compares with annual

growth rate of 12.3 per cent for Liberia and Panama and of 7.5 per cent for the 10 largest developed countries. Of course these figures must be seen in the context of the relatively small starting base for the developing countries, but the record is nevertheless impressive and defeats the Unctad argument that the third world is prevented from expansion in the maritime industries by the economic power in the hands of the shipowners and cargo interests in the developed countries, and that rectification can only come via a cumbersome and artificial market-sharing programme which would destroy the flexibility of the spot market, and which through the creation of idle capacity, will result in much higher transportation costs for everybody.

It appears that the officials in Unctad and in some of the countries

supporting its aims on the shipping front have lost a bit of steam lately.

This is partially due to the strong stand taken by the industry itself. We have in our turn proposed positive and well publicised alternatives to encourage shipping in the developing countries on a private industry basis which we believe will work better and cope without the cost of subsidies and

unnecessary market constraints. While the battle is not yet over, I think

we have generated more of an awareness in official circles that there

is so much complexity in international shipping that it might really be smarter to let supply and demand in a free market do the regulating for optimum. effect. Speaking in Hong Kong, all this may sound like good common sense to you, but I can assure you that while Hong Kong's style of doing business is being admired in some quarters, it does not yet seem to be generally known that on top of an encouraging political environment it also takes hard work and skill to make some thing out of nothing!