Port City and usual “patriotic progressive” barrage: What rubbish

ast week, the Megapolis and Western Development Ministry, the Urban Development Authority (UDA) and the local project company, CHEC Port City Colombo (Pvt) Ltd, a subsidiary of China Harbour Engineering Company signed a tripartite agreement resulting in the resumption of work on the long stalled Colombo Port City, now renamed as Colombo International Finance Centre. That is the culmination of the about-face of the ruling party’s earlier rambles on Chinese investments. One and a half years back on political stages, China was projected as the rent-seeking accomplice of the authoritarian-leaning former regime. Now, the gradual dawning of sanity should be a relief to many who feared Sri Lanka was poised to squander another historic opportunity to jump start its economy. However, that eventuality could still happen if the government allows gutter politics and single issue interest groups to dictate its economic policy.   
Apparently, having learnt a lesson or two from the recent fiasco, the project company under the new agreement has passed on to the government the responsibility of taking regulatory licences for the project. Sri Lanka’s labyrinth of regulations and mechanisms that oversee them are largely out of touch with reality; they are meant to maintain the status quo, rather than facilitate wealth creation. Now the government would have to make them work through reforms; cut them to  size and turn them into an accessory, rather than a handicap of development.   

At an estimated FDI inflow of US$13 Billion, the Port City is by far the largest Foreign Direct Investment project in the country of all time, thus it and any other project of that magnitude ought to be viewed in terms of the potential wealth it directly and indirectly creates and not in terms of hypocritical cants over minor irritants, be it the loss of fishing grounds or the endangered marine species. Those concerns are noble, but are out of touch with our economic conditions. A developing country with first world concerns cannot compete effectively in a world where its counterparts go an extra mile to woo investment. The recent history of political economy would reveal that the countries cleared the environmental mess and strengthened labour laws when they got rich, and not vice versa. This worked for countries ranging from Japan to Taiwan, though sheer size and dazzling pace of industrialization in China suggest that a strategy may have its own drawbacks. (Still the smog is better than starvation that killed 30 million during another failed economic experiment, the Great Leap Forward.)  

The resumption of the Port City Project has also reignited the other usual debate on sovereignty. However, transnational complex interdependence, globalization and even social media have altered the old concept of sovereignty. States pool their sovereignty in pursuit of prosperity. However, even before the world became a global village, some states bartered a portion of their sovereignty to get out of poverty. Countries from Taiwan to South Korea and even Japan won the gamble and are now economic and technological power houses. On the contrary many other third world leaders, who shouted sovereignty and non-alignment from their rooftops failed, in the process dragging their people into prolonged economic decay. Sovereignty is still the word of choice for every despot, tyrant and loser from Robert Mugabe to Venezuela’s Nicolus Maduro, who hide their monumental failures behind that impressive word.   

A country’s behaviour in the international system is primarily determined by its relative place in the system. That means a small state like ours cannot act like a great power. However, within those broad parameters, the international system also creates opportunities. Smart leaders who take decisions on behalf of their States exploit those systemic opportunities in their favour. For instance, during the bi-polarity of the Cold War, South East and East Asian states exploited those systemic opportunities by siding with the United States, which in return poured investment and technology for their economic advancement. While the core US strategy was to contain the Soviet Union, development dictatorships in those East Asian states made use of that opening not only to provide security for themselves, but also to create wealth for their countries. On the contrary , leaders like ours who choose to stay in the middle, preferring to preach Non-Alignment and decolonization, (good ideas but, none of which brought food to the table for our poor) lost out. (They might not feel theirs was a policy debacle , because, those ideational policies gave a boost to their persona among the equally ineffectual bunch of other leaders, but surely we as a country lost out).  
The on-going redistribution of power in the international system, courtesy the rise of China also creates systemic opportunities for countries like ours, if we are smart enough, to exploit them for our advantage.  

China’s grand strategies such as the Maritime Silk Road, Chinese led Asian Infrastructure Bank, many Chinese companies seeking to invest abroad and rich Chinese looking somewhere safer to park their wealth create unparalleled opportunities for Sri Lanka, positioned in a strategic location in the Indian Ocean. A smart government should be able to make good use of those opportunities.  
That does not mean we embrace the Beijing Consensus or the Chinese Worldview. Nor do the Chinese appear wanting the other states to do so ( at least for the time being). Beijing will be happy as long as we do not pock in their eye over Taiwan, Tibet or their internal politics.  
 Even David Cameron wanted to ride the wave with the Chinese; Britain under his leadership joined the Asian Infrastructure Development Bank and also inked an agreement on the Chinese partnership in the strategic nuclear project at Hinkley Point, which has now been put on hold by his successor.  
The government is following a balancing act in its economic tilt towards China and potential concerns it would generate in New Delhi. It seems to have developed a strategic understanding with India. The best option would be in order to allay Indian concerns, as well as to enhance our own security to evolve that strategic understanding into a strategic alignment --and trade with the rest of the world.   
All in all, China’s deep pockets offer us an opportunity to give a shot at our own prosperity. We have lost many chances in the past and should not miss this for it would make another generation poorer and despondent.  

Follow Ranga Jayasuriya @ RangaJayasuriya on Twitter.