Eye On India And Indian Ocean Region, Sri Lanka Looks To Spread Trade Wings

0
472
WALKING TOGETHER: Sri Lankan President Gotabaya Rajapaksa who was in India last week held talks with Prime Minister Narendra Modi.

NEW DELHI: The Sri Lankans have a grouse against India, actually several. They complain that trade volumes at just around $5 billion are very low; India’s investment of $1 billion in the last 16 years is seen as laughable compared to China’s $12 billion; India refuses to open its market to Sri Lankan textiles, fearing its own textile sector will lose out!

“We are a small country; how can Sri Lanka’s textile sector compete with that of a giant like India,” asks Ganeshan Wignaraja, executive director of Laxman Kadirgamar Institute of International Relations & Strategic Studies, a Colombo based think tank. He was speaking in New Delhi on bilateral relations in the context of the recent visit of his country’s President Gotabaya Rajapaksa.

He insisted his views were his own, not that of his government, and his engagement in India was fixed long before even the elections that won Gotabaya Rajapaksa the presidency. Nevertheless, it was pretty clear his views had the endorsement of the Sri Lankan authorities, which is why Wignaraja’s comments are important.

He said India’s decision to walk away from the RCEP (Regional Comprehensive Economic Partnership) negotiations may have won some applause at home but was a crushing disappointment for Colombo. “We were hoping to enter East Asia through India once RCEP was in place but that was not to be,” Wignaraja regretted underscoring that in his view, “integration of South Asia is the way forward given the global trend towards de-globalisation, the shrinking elasticity of trade-driven growth worldwide and the trade tensions between the U.S. and China on the back of weak growth”.

Ganeshan Wignaraja (Photo: Laxman Kadirgamar Institute of International Relations And Strategic Studies)

He noted that talks on a BIMSTEC free trade area combining seven neighbours (India, Bangladesh, Bhutan, Myanmar, Nepal, Thailand and Sri Lanka) are still ongoing while Delhi-Colombo talks on a bilateral comprehensive economic partnership are yet to fructify. The South Asian Free Trade Area never really took off and SAARC (South Asian Association for Regional Cooperation) has not met since the 2016 Islamabad summit was cancelled.

But Wignaraja believes integration is still possible through the Indian Ocean. Writing in March this year, he said the Indian Ocean brings together “28 dynamic economies that border the ocean across Asia, Africa, the Middle East and the Pacific. They are expected to grow at 6 per cent per year in the next few years compared to only 3.7 per cent for a fragile world economy. Per capita income is expected to grow from $3200 to $6150 by 2025, marking it out as an upper middle income region.”

Sri Lanka strategically located at the “centre of the Indian Ocean” is pursuing plans to emerge as a trading, logistics and financial hub between Singapore and Dubai. The Colombo Port City project being funded and built by China could become an international financial centre and complement Sri Lanka’s drive to become a services-driven economy.

Wignaraja acknowledged the pitfalls ahead. The Indian Ocean is at the risk of big power competition (as in the South China Sea) and any impasse leading to confrontation could disrupt international trade (including Colombo’s). There are at least 160 naval warships in the Indian Ocean at any time, he said. Then there are concerns about overfishing by trawlers belonging to powerful countries that are depleting marine resources at an unsustainable rate. Piracy, human and drugs trafficking is on the rise in the Indian Ocean Region. In 2017 more than 46 per cent of piracy cases were in the Indian Ocean.

“India is no less vulnerable than Sri Lanka,” Wignaraja pointed out stating the obvious. The concerns are well documented but getting people and countries on board is never easy given rising nationalist sentiments everywhere. But with new governments in Delhi and Colombo and Prime Minister Modi likely to visit Sri Lanka early in the new year, there’s always hope on the horizon.

LEAVE A REPLY

Please enter your comment!
Please enter your name here