If Britain can cozy up to China, why can’t Sri Lanka?

25 October 2015 07:41 pm - 0     - {{hitsCtrl.values.hits}}

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ast week saw a curious event of pomp and funfair-and political realism-that highlighted how far the States would go to maximize their benefits, even at the expense of their allies. Britain rolled out the red carpet for Xi Jinping, the Chinese President who rode in a gilded royal carriage to the Buckingham Palace with the Queen seated alongside, and was hosted in a series of banquets and signed trade deals running into billions of dollars, including a 30% investment in a new British nuclear power plant. Since the United States, Britain’s old ‘special friend’ is hedging against the rising (and increasingly assertive) China, the British cozying up with the Middle Kingdom would not go down well in Washington. That is in addition to all the righteous concerns of human rights that were put on hold in the rush for China’s gold.

 When all is said and done, this however vindicates one immutable premise in international relations: States are rational self interested actors driven to maximize profit. With its ultimate national security being guaranteed by the NATO (of which the overwhelming burden is taken care of by the US, the status quo power), Britain is luring China, the challenger and a potential revisionist power for the sheer allure of economic benefits that a rapprochement would bring. And long term economic benefits for Britain in its thaw with Beijing, most analysts say  would be huge in terms of investment and exports in high end sectors such as education and finances, in which Britain always has a qualitative edge.

Now, see how our new Government conducted itself since it came to power in January this year. It suspended a number of major infrastructure development projects; many of which were funded by China. Various justifications were given, ranging from inflated project cost, corruption and the other usual culprit, flimsy environmental concerns.  Since most of them were later resumed, some with certain cost reductions, but also sans, some of the flyovers, lanes and interchanges that were in the initial blueprints, one would now ask whether all the pre-election brouhaha was political gimmick. For instance, the Cabinet has now granted green light to the Kadawatha-Kerawalapitiya section of the Colombo Outer Circular Highway (OCH) to be built according to an amended Blueprint,  according to which, an inter change has been removed and the length and height of viaducts were reduced. However, it comes at a 39% reduction of the initial cost.
 

"If Sri Lanka is to leapfrog from our current development level, we have to adopt laws in land acquisition, environment or labour etc, to be compatible with our current economic and social standards. "


The opaque nature of the former regime’s handling of the economy and, especially, mega projects caused reasonable concerns about corruption and malpractices. However, a large part of the initial reaction was driven by political considerations and meant to discredit the ex-President’s role in the country’s infrastructure drive. Mahinda Rajapaksa can be blamed for many things, but his regime’s track record in revamping the country’s infrastructure landscape is salutary. Without his pro-active, perhaps corrupt and obviously nepotist leadership and Chinese loans; some of which were obtained at a higher interest, we would have stuck in our own infrastructure gridlock.

His predecessor spent her two terms arguing and quarrelling over project plans, whereas MR built.  This Government should pick up from where he left. Instead, it is vacillating. Perhaps, our civil society is too busy in deliberating on higher values of constitutionalism, democracy and a political solution to the ethnic problem, to talk sense to the present Government about the sad economic reality.  All those noble ideas of democracy would be in vain if the country failed to create sufficient wealth to sustain that society.  To that end, we need physical infrastructure and investment. Perhaps, the Government should listen to the German ambassador in Colombo. Last week, in an event organized by the Business Council of Chamber of Commerce, he said that the Government had still not introduced a proper economic policy framework to attract foreign direct investment. This is a clear indication that the country lacks the capability of implementing an economic development framework, he said.

One of the glaring examples of that policy paralysis is the Government’s vacillation over the largest single foreign investment to date: The $ 1.4 billion-Colombo Port City, which is expected to bring in $ 13 billion in foreign direct investment by its completion and add one per cent to the country’s GDP. The contradictory signals the Government is sending over the Port City project, which was suspended in January are mind-boggling. Now the underlining concerns over the project are said to be environmental, though, it is not so much a secret that much has to do with geopolitics. This is bad economics and bad politics. Countries at our development level should look for all available inward foreign direct investment. That is exactly why first Executive President JR Jayawardene, who unshackled  the Sri Lankan economy famously said, ‘Let robber barons come’.  That could have been the same logic MR had in mind when he tried to bring in Australian gaming mogul James Packer. That was not a bad idea though the moralists in Colombo were disturbed by the prospect of prostitution in casinos; which is the least concern in a country of which hundreds of thousands of women are condemned to toil in abusive Arab households.
 

"It suspended a number of major infrastructure development projects; many of which were funded by China."


It is always good to stand on the side of  the free world, in principle, however, trying to give practical expression to those rhetoric by our own accord or due to someone’s dictat, is counter-productive for countries like ours. Now, the Government could ask its Western friends, if Britain could share its nuclear security with China, what the fuzz with us leasing a portion of reclaimed land to a State-owned Chinese company? The bottom line is that no one else would bring in a hefty load of red Yuan as China. As the Chinese economy is slowing down and the country is shifting from its debt- fuelled infrastructure-driven growth to other avenues, Beijing is looking for more and more opportunities to invest overseas, especially in infrastructure, at which China excels. Sri Lanka should try to make it a welcoming market to Chinese investors (and its growing legions of tourists). At present, we are doing quite the opposite.

Also, perhaps the Government should also tell those busy bodies of environmental industry to go and fly a kite (In fact, Indian PM Modi did that). If Sri Lanka is to leapfrog from our current development level, we have to adopt laws in land acquisition, environment or labour etc, to be compatible with our current economic and social standards. Our current laws and regulations on those accounts are not meant to facilitate the growth, but to stifle it.

This Government is free of the burden of terrorism. The best it could do to its people is to create wealth. To that end, it should think about the self-interest of the country, and by extension of its people, more than anything else. If David Cameron and Osborne -- Ranil Wickremesinghe’s mates in  the International Democratic Union --  could do that, the new Government in Colombo should well be able to emulate them.  

Follow Ranga Jayasuriya @ RangaJayasuriya on twitter.

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