Monday, 2 March 2015 00:00
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Foreign Minister Mangala Samaraweera’s two-day tour of China ahead of a planned visit by President Maithripala Sirisena later this month ended on a positive note, with Chinese Premier Li Keqiang reaffirming his country’s commitment to Sri Lanka as a regional partner while Samaraweera’s Chinese counterpart, Foreign Minister Wang Yi, went so far as to describe the relationship between the two nations as an “all weather friendship”.
Even when such statements are viewed without the rose-coloured lenses of diplomatic tactfulness, it is clear that despite its size, Sri Lanka remains a valued regional partner to the Chinese. Bilateral ties between the two nations have always been cordial ever since Sri Lanka became one of the first countries to recognise the People’s Republic of China in 1949. However, this relationship has increasingly been characterised by the reported $ 5 billion in Chinese investment that flooded the island over the last decade; investments which President Sirisena and his supporters claim were largely squandered on lavish and unnecessary infrastructure projects and – more seriously – Government corruption.
In that context, perhaps one of the most valuable contributions to the national discourse on corruption was made by Premier Li Keqiang when he urged Sri Lanka to offer a sound legal environment for Chinese investments. Viewed from the perspective of China – a nation which is projected to channel outward direct investment to the tune of $ 1.25 trillion over the next decade – uncertainty over the controversial $ 1.5 billion Colombo Port City Project is but one component in a much greater plan – namely, the 21st Century Chinese Maritime Silk Road.
Stretching out from Southeast Asia, across the Indian Ocean into Africa, the Middle-East and Europe, China has funnelled billions of dollars worth of investment into the development of ports and infrastructure in several nations along the envisioned trade route as part of the continued shifting of global economic momentum towards the East. This initiative alone ought to provide significant incentive to Sri Lankan policymakers to ensure that China is not sidelined in the proposed rebalancing of Sri Lanka’s foreign policy, however when considered together with rising social, political and economic turmoil across Europe – a key Sri Lankan export destination – the realignment of Sri Lankan trade policy becomes imperative.
Speaking at a recent forum organised by the American Chamber of Commerce, Finance Minister Ravi Karunanayake issued a sweeping condemnation of the previous regime’s bungled foreign policy approach, which he noted had the unfortunate effect of turning friendly nations into enemies. Given the loss of GSP+ facilities in Europe and the United States and the subsequent European Union ban on imports of Sri Lankan fish to cite just a few economic examples, Karunanayake’s point here is difficult if not impossible to argue with. Karunanayake went on to note that American investors were eager to enter the Sri Lankan market but, more worryingly, he admitted that China had been left “puzzled” by recent developments in Sri Lanka.
In that backdrop it is unfortunate that Chinese investments have been equated with the rampant, self-serving corruption of the previous regime. This is due in no small part to mixed signals arising out of the anti-corruption fervour of the ‘Yahapalanaya’ Government. President Sirisena’s visit to China is therefore a commendable step towards cementing Sri Lanka’s place in the modern day Silk Route. In the meantime, the most prudent course would be to follow Premier Li Keqiang’s advice and improve Sri Lanka’s legal framework to accommodate future investments within the good governance framework.
