Sri Lanka brimming with promise

The full interview:
Continued from yesterday

Sri Lanka is profiled in the latest issue of the French independent review La Lettre Diplomatique (The Diplomatic Letter): 'Sri Lanka, Future Hub of the Indian Ocean Rim?' La Lettre Diplomatique was founded in 1988. The review carries interviews of key actors in the world of diplomacy and international relations. Its articles present the insights and prognoses of experts who keep close watch on the fast-changing geopolitical and strategic landscape, and carefully analyze the stakes of globalisation. The report on Sri Lanka carries an interview of Ambassador Dr Dayan Jayatilleka on questions of reconciliation, autonomy, development plan in conflict areas, economic growth and maritime security

T.D.L.: A large-scale reconstruction plan, with a budget estimated at over USD 2.5 billion, has been launched in conflict zones in Northern Sri Lanka. Could you describe some of the main infrastructure projects included in this plan?

Dr. D.J.: The Sri Lankan government is not waiting for the reconciliation process to be completed before it moves on the issues of reconstruction and rehabilitation of the areas affected by the conflict. Many social scientists think economic prosperity can solve the political problem. This is not true, because there is a problem of identity.

Meanwhile, the economic reconstruction remains a goal in itself, because some regions have lagged behind the rest of the country for so long.

The government has concentrated on major infrastructure because it believes that once the electricity is back, and the roads are repaired, then private companies will come back and invest. This is what is being done.

The links between the North and the rest of country were broken during the war, not only in a physical sense, but also in every possible way, preventing access to the market, sometimes due to very heavy security measures, because bombs were being transported to the cities.

Now all that is over. There is an important dynamic on the part of the private sector, which is moving into the North and the East. Besides the lack of infrastructures, there are also other obstacles, like mentalities that have not changed. Sometimes there is a reaction, for instance, against a big tourist hotel or some big enterprise that could change the way of life. It is seen perhaps as an intrusion.

The government has also the responsibility to remove land mines, which were about two million at one time. That was one of the major problems for reconstruction, and it prevented displaced persons who were housed in temporary camps from going back home.

Furthermore, the government is putting emphasis on reconnecting the former conflict areas with educational institutions. This is very important, because in Sri Lanka education is almost religious. Now even the young men and women who are in detention for having participated on the side of the Tigers can apply for educational programmes and exams for graduating.

There is a third dynamic, on the part of society. People are moving and domestic tourism is growing. There are also some successful initiatives that are worth mentioning. For instance, about 13,000 people joined a big trek in June 2011 from the Southern point of Dondra to the Northern tip of the island, Point Pedro, to raise funds to build a cancer pediatric ward at the Jaffna General Hospital.

Today, many young people have been invited to the South, creating interactions with their contemporaries in schools and high schools. Our country is now slowly healing, not only because of the government but because of people and the private sector. I think that something new will grow out of this process.

T.D.L.: The Asian Development Bank is predicting 8 percent growth for Sri Lankan GDP in 2011 and 2012. Has the economic turnaround in the Northern areas helped get the entire country moving forward towards development? There has been an upswing in high-level subcontracting activities. What other up-and-coming sectors hold strong promise for spurring sustainable economic growth in Sri Lanka?

Dr. D.J.: With the end of the conflict, there has been a massive increase in agriculture production and fishing. These economic sectors have been the most important in the Northeast. The East, for instance, is a particularly fertile region where rice is produced, which is as you know the staple food in the country.

It is true that the regeneration of activity in those areas is very helpful to the South, because it allowed rice production to increase and prices to reduce. But a lot must to be done, because there was a lot of destruction. We also need more fishermen and equipment.

Tourism is the third sector with great potential. It is more developed in the East than in the Northern part of the country, with several excellent beaches and well-known surfing competitions.

In Jaffna, tourism has been mostly domestic, bringing prosperity thanks to the large number of retail shops. Now there are opportunities to foster major tourist inflows from overseas.

But I would say that the main economic advantage that will emerge is the educated young population of the former conflicted areas, which will be reintegrated into the rest of the country's dynamic.

We are really talking about a high value workforce, which is highly educated and capable, especially in information technology (IT). The government has been concentrated on restoring IT into those areas. Of course, as I said, the process in the Northern zone faces its own problems. Because of the collapse of the civil administration after 30 years of war, the Sri Lankan Army has to keep a heavy presence there. This situation cannot continue for long. The functions that it has to fulfill at the civic and administrative levels will be rolled back gradually as local capacity is developed.

It is true that besides tourism, cricket is also one of the things we are known to do well. More seriously, we have a very large and highly qualified workforce in accountancy and literate in the English language. It attracts a lot of outsourcing activities in Sri Lanka, making obvious the importance of this intangible resource, because quite a lot of what is going on in the IT sector is related to this brain industry.

More than that, Sri Lanka retains the great and irreversible advantage from is its location. We are positioned very strategically, not only in terms of military strategy, but also in economic terms, as a kind of gateway to Far East Asia and now on the doorstep of South Asia.

Within Asia, as we know, there are two major engines of growth: China and India. Sri Lanka has excellent relations with both. Our country's location permits access to these two high growth markets, but can also be a jumping off point. Thus, the potential of Sri Lanka has to be considered through these two aspects: a geo-strategic location that has always been important, but is more important with the Asian economic renaissance and a population conversant in English.

The evidence of our high potential is, as I already mentioned, the resilience of our economy even during the war. However, as a social scientist, I would admit that potential is one thing and fulfillment is another. There is a lot of work to be done for Sri Lanka to be able to move forward towards achieving its full potential.

T.D.L.: Sri Lanka is looking to capitalize on its strategic location at the crossroads of the globe's most important maritime trading routes, with projects like the new port in Hambantota. Is expanded economic cooperation with China helping advance things in this arena? How do you account for your country's relatively weak trade with its European and American partners?

Dr. D.J.: The American strategic scholar Robert D. Kaplan wrote a very thick chapter on Sri Lanka in his recent book, called Monsoon. He says that in this new period of history, the Indian Ocean Rim is going to be the epicentre of the world, positioning Sri Lanka at the centre of it. It is maybe too flattering, but I think that our country has a lot of potential and also attracts a lot of attention.

It is true that China has become our major economic support. The biggest Chinese investments concern is actually the Southern port that you mention in your question. Nevertheless, it is a matter of record that Sri Lanka offered it first to India, which is not only our neighbour; it is our relative as our President has said. For whatever reason, India was not ready to make that kind of investment. But we have excellent relations with both India and China.

Sri Lanka's relationship with China is multifaceted. Both countries have old cultural civilizations and religious links, and they have shared a common history along the Silk Road. In the modern period, and of course after independence, they have established excellent relations, whichever administration was in power in Colombo and its political orientation. And China, as we know, has been moving out, investing in Africa and Latin America.

As the Zambian economist Dambisa Moyo says in her book, Dead Aid, China has done in Africa what the West has not done for 60 years, like infrastructure, providing jobs, etc.

Unfortunately, for whatever reason, some in the West have chosen to distance themselves from Sri Lanka. I don't think this makes sense economically. It is like the American investors that want to go to Cuba, but they can't because of US government sanctions. The result is that the Europeans and the Canadians are already entrenched in Cuba. The same effects apply to Sri Lanka. We are positioned in such a way that the massive economies of India and China will always compete with each other to participate in Sri Lanka.

That said, we are open to everybody and we just wish that our friends in the West do not impose conditional fees and thus take themselves out of the game.

It is not good, even for peace and reconciliation, because I think interconnected globalization is positive. But this process cannot be at the expense of our relations with China or any other partner. From my point of view, Europe should reengage fully in our market, in terms of being a full economic actor.

To be continued