Maximising regional value through maritime connectivity investment
- Lunchtime Session
Maritime connectivity has been shown to increase the external trade of countries and regions. There are various ways in which maritime connectivity could be facilitated. In many countries this takes the form of support of some form to their shipping sector, either via budgetary or tax expenditures or other support measures. A measure introduced in many countries is the tonnage tax, a favourable tax scheme for shipping companies that replaces the regular corporate income tax. One could wonder if these support schemes have achieved their objectives. At the same time, initiatives such as Belt and Road have driven increased foreign investment in maritime assets, including ports. Such initiatives could provide funding for projects that would otherwise not taken place, but have also raised concerns. One of the main questions is how local economic spillovers can be generated from this investment?
- In 2019, 22 EU-countries have a tonnage tax, yet the share of EU-flagged vessels has decreased from 34% in 1990 to 18% in 2018.
- The market share of Chinese state-owned enterprises (SOEs) in European container terminals has increased from zero to ten percent in one decade.
- Do maritime subsidies enhance regional growth, well-being and land-side connectivity?
- How can foreign investment in maritime assets create positive local spillover effects?
- What is the impact on ports and related policies?
ITF (forthcoming), Subsidies for Maritime Shipping: Worth the Money?