Monday Oct 26, 2026
Monday Oct 26, 2026
Monday, 26 October 2026 06:30 - - {{hitsCtrl.values.hits}}
Sri Lanka must diversify its markets, build trusted digital trade institutions, and balance between competing powers while keeping its ties with the US strong if it is to turn its post-crisis recovery into lasting prosperity in a fragmenting world order, three international experts said.
International Chamber of Commerce (ICC) Global Honorary Chair Maria Fernanda Garza, Switzerland-based political consultant, campaign strategist, and political scientist Dr. Louis Perron, and former Sri Lankan Ambassador to the US, Mexico and Trinidad and Tobago Mahinda Samarasinghe were speaking at the 50th webinar organised by the Daily FT, Association of Chartered Certified Accountants (ACCA), and the International Chamber of Commerce Sri Lanka, together with Women in Management (WIM), the Sri Lanka Institute of Directors, the MBA Alumni Association of the University of Colombo, and Pioneer Institute of Business and Technology, on Saturday. The webinar was titled “In an Emerging New World Order, What Are Sri Lanka’s Options?”
Garza, who visited Colombo in 2023 amid the economic crisis, said stability had since improved, growth had returned, and reforms were underway, but the world had changed profoundly. “We are not witnessing the end of globalisation, we are witnessing its transformation,” she said.
She identified three opportunities. The first was diversification and regional integration, as over-dependence on a few markets, suppliers, or partners created vulnerability. Sri Lanka’s Indian Ocean location, its ties with India, and its connections across Asia, Europe, and the US allowed it to deepen its role in regional value chains, logistics, services, and higher-value exports. “The objective should not be to choose between competing economic powers, but to build diversified relationships that preserve economic opportunity and strategic flexibility,” she said.
The second was digital transformation underpinned by institutional trust. Welcoming progress towards paperless customs, Garza cautioned that technology could make procedures faster without making them better. “The countries that benefit most will not necessarily be those that adopt technology fastest, but those that develop the institutional capacity to use it effectively,” she said.
The third was renewing international cooperation, as predictable rules were essential infrastructure for smaller economies, the most exposed when cooperation gave way to power-based negotiations, she said.
Samarasinghe, Ambassador in Washington for five years, said the US remained the world’s largest economy and importer, which was why leaders scrambled to strike deals after the Donald Trump Administration’s reciprocal tariffs of April 2025. Some 45 countries had since signed agreements under what he termed a carrot and stick approach, with Washington pursuing geopolitical objectives through trade talks.
The sticks included surcharges on buyers of cheap Russian oil, since rolled back but liable to return, and a 40% surcharge on Vietnam over transshipment. The US also insisted on bilateral terms, full or near-full duty-free access for its exports, and US standards for its agricultural exports, he said.
The carrot was a locked-in tariff rate, such as 15%, 19%, or 20%, shielded from fresh probes including Section 301 investigations, plus zero rating for thousands of goods. In return, partners made large pledges: the EU a non-binding $ 600 billion in investment and $ 750 billion in oil, gas, and nuclear fuel purchases, Japan $ 550 billion, Taiwan $ 500 billion, South Korea $ 300 billion, and India $ 500 billion.
While tariff pressure had expedited alternatives such as the India-EU free trade agreement (FTA) after 17 years of talks, the US would remain the predominant economic force, he said. He urged Sri Lanka to keep exercising “smart options,” citing its role in Operation Prosperity Guardian in the Red Sea under President Ranil Wickremesinghe and the present Government’s handling of the Iranian ship issue, which the White House and the State Department praised for keeping the US informed while maintaining neutrality. “It is in Sri Lanka’s interest to have the best of relations with the US,” he said.
Dr. Perron said Donald Trump’s return marked the end of sole US dominance after the Cold War, giving way to competing superpowers. A likely Democrat House majority after the midterms would deepen gridlock, leaving the world’s largest economy able to pass a budget only under threat of a Government shutdown, he said.
Regional and medium powers such as Turkey, Brazil, Saudi Arabia, and Indonesia would grow more assertive amid shifting alliances. “You get a better deal from the superpowers if you do a balancing act as a country,” he said, adding that Wickremesinghe had done an outstanding job of this for Sri Lanka.
The new order would be unstable, with regional wars likely, forcing many countries to follow the Israeli and Polish model of heavy defence spending while international law, the UN, and the World Trade Organisation (WTO) were sidelined, Dr. Perron warned. Citing the diverging fortunes of Colombia and Venezuela, Poland and Ukraine, and South and North Korea, he said the difference lay in the choices of political leadership.
