By Dr Palitha Kohona*
The Indian Ocean part is experiencing a fondly anticipated luxury. Almost every 1 of the economies of the part is expanding at a charge per unit of measurement that gives hope to the entire region, especially to its pathetic together with marginalised. The hope of prosperity enthusiastically proclaimed at independence from colonial rule, so many decades ago, may at terminal acquire a reality. Bharat is powering ahead with an anticipated increment charge per unit of measurement of 7.3% together with instantly is ahead of China. Still the South Asian part continues to live on confronted past times an inexcusably massive burden of poverty, literacy deficits, malnutrition together with deprivation. Southern Asia has the dubious distinction of beingness habitation to the largest concentration of the pathetic inward the world. Inadequate policy frameworks, corruption, state of war machine rivalries together with internal conflicts, alongside others, drain resources which could live on devoted to economical advancement. Some internal conflicts are funded from the outside. Encouragingly, the countries of the part have got been attempting to collaborate with each other on economical matters, although ever so slow together with inward fits together with starts, having recognised that at that topographic point is much to live on gained through cooperation with each other than through rivalry. There is withal much to a greater extent than mutually beneficial progress that tin live on achieved through cooperative efforts. Bharat itself has expanded its vision with a slogan, “Look East Act East”.
The SAARC countries have got concluded the understanding on the South Asian Free Trade Area (SAFTA) roofing over 1.5 billion people together with the South Asian Agreement on Trade inward Services which tends to follow the Gats model. For a multifariousness of reasons, including political tensions, religious rivalries, internal conflicts, historic menses old suspicions, externally generated unease, colonial hang ups, etc, these agreements have got non realised their intended potential.
Intra SAARC merchandise accounts for only 5% of the merchandise of its members. (In the NAFTA intra fellow member merchandise accounts for 51% of their trade, inward the EU, 65% together with inward the ASEAN, 25%). Sadly political rivalries have got held dorsum SAARC together with many experience that the organization created inward 1987 could have got achieved to a greater extent than inward its 30 years of existence. There is fifty-fifty a proposition that the SAARC should live on left to croak a natural death. Influenza A virus subtype H5N1 sorry thought indeed.
The Bay of Bengal countries are business office of the Bay of Bengal Initiative for Multisectoral Technical together with Economic Cooperation (BIMSTEC). This understanding too, could generate improve results, if methodically implemented. The part has also much inward mutual that tin live on easily marshalled for mutual benefit. History, culture, religion, shared values, etc, all scream for collaboration, but petty withdraw heed has been given to this incessent call. Centuries of cooperation together with merchandise beckon us to respond.
Sri Lanka has concluded costless merchandise agreements (FTA) with Bharat together with Islamic Republic of Pakistan together with is inward the procedure of negotiating an Economic together with Trade Cooperation Agreement (ETCA) with India. Following the FTA, exports from Bharat to Sri Lanka have got boomed, reaching an impressive 4.5 billion Dollars. While Sri Lanka’s exports to Bharat have got grown but non at the same dizzying stride together with hover to a greater extent than or less .5 billion Dollars. This disparity has given ascension to suspicions together with opposition to the determination of the proposed ETCA. Serious perceptional together with practical issues stay to live on addressed with regard to the bilateral costless merchandise agreement.
The Southern Asia region, every bit a unity, is withal to secure international acceptability. Its leaders together with policy makers demand to live on to a greater extent than flexible, imaginative together with ambitious. While nosotros fighting with such issues, a novel component has entered the equation.
One Belt One Road initiative
Chinese President Xi Jinping’s One Belt One Road (OBOR) initiative, also known every bit the Belt together with Road, unveiled inward 2013, has provided the countries of the wider part with a novel challenge every bit good every bit an unique chance to fast rails their economies along the path to development. An investment bonanza is beingness dangled nether the OBOR initiative, especially attractive to the countries on the Maritime Silk Road. Carefully managed together with sensitively implemented, it could revive the glory days of the ancient Silk Route. Sri Lanka, sitting at the hub of the Silk Route, has embraced this concept.
It has been said that China’s OBOR investment ambitions, focused mainly on cooperative infrastructure together with connectivity enhancement, has the potential to brand a greater touching than the ship World War U.S. Marshall Plan. The Marshall Plan provided fiscal assistance to the state of war devastated economical giants of Europe together with was a major component inward their quick recovery. But the funds available nether the OBOR brand the Marshall Plan pale inward to insignificance. The Marshall computer program provided over $140 billion, at 2017 dollar values to aid Western European economies.
The Belt together with Road inaugural expects to brand available a stunning USD 4 – 8 trillion, albeit to a much wider region. While the Marshall Plan achieved much, the OBOR funds are expected to realize substantially much to a greater extent than past times creating an extended part of shared prosperity, the clear beneficiaries beingness a large number of developing countries.
The Marshall Plan allowed the U.S. to export its currency. The U.S. dollar was used to render the subsidies, piece European countries purchased U.S. goods with their ain currencies. Over time, the U.S. dollar became a tool for stability; funds provided past times the computer program created the footing for futurity frequent easing of merchandise restrictions.
Adding strength to the OBOR initiative, the Chinese Yuan has instantly been recognised every bit a reserve currency past times the IMF together with Red People's Republic of China appears to live on increasingly moving towards international payments inward Yuan. The International Monetary Fund elevated the Yuan, also known every bit the renminbi, or “people’s money”, on the same solar daytime that the Communist Party celebrated the founding of the People’s Republic of Red People's Republic of China inward 1949.
The Yuan joins the U.S. Dollar, the Euro, the Yen together with British Pound inward the IMF’s special drawing rights (SDR) basket, which determines currencies that countries tin have every bit business office of International Monetary Fund loans. This would live on the starting fourth dimension time that a novel currency has been added since the Euro was launched inward 1999. It is an impressive achievement every bit the Yuan had rattling petty or no credibility every bit of late every bit 30 years ago
Today, Red People's Republic of China is the world’s largest economic scheme past times purchasing powerfulness parity. This is a massive outflow from less than USD 200 per capita gross domestic product inward 1970. Sri Lanka’s per capita gross domestic product is to a greater extent than or less USD 3800. (USD 270 inward 1980).
The outward looking Belt together with Road initiative, is designed to have got a massively transformative touching on the economies of the vast Asian together with African regions encompassing 68 countries with over 65% of the world’s population. It volition live on a closely related component every bit Sri Lanka seeks to realise its ain Vision 2025. Vision 2025 provides the evolution pattern for the province for the adjacent 7 years
The OBOR goal, backed past times China’s substantial economical clout, including through the Asian Infrastructure Investment Bank (AIIB) which has 61 province members at present, possesses the potential to create pregnant opportunities for the entire region. Bharat has joined the AIIB.
SEIC 2017
It is against this background that the successful SEIC 2017 was organized inward Colombo, Sri Lanka, inward Nov 2017. The objective was to highlight Sri Lanka every bit a trading pump together with an investment destination. Influenza A virus subtype H5N1 pregnant number of the participants at SEIC 2017 came from overseas, especially from China. Others came from Wall Street, London, Geneva, Dubai, India, Hong Kong, Singapore together with Amsterdam.
Historically, traders together with casual visitors recognised Sri Lanka’s potential both every bit a finish to see together with a trading hub. Ibn Batuta, the Moor from Tangiers, who visited the isle inward the 14th century, was non incorrect past times much when he observed that this was the almost beautiful isle on world together with was only twoscore leagues from paradise. That paradise must live on preserved despite the race to modernize, together with attain a higher grade of sustainable prosperity for the people of the province every bit they seek to climb upwardly the evolution ladder.
The copious writings of the 5th century scholar monk Fa Xian from Red People's Republic of China who spent a number of years inward the ancient capital, Anuradhapura, after a long sojourn inward northern India, tell a tale of bygone prosperity together with complex international diplomatic together with trading relations. Fa Xian carried a ship charge of religious texts from Sri Lanka to China. Sri Lanka, similar other countries of South Asia, had developed of import relations, religious, trading together with social, with the Middle Kingdom from early on days.
The Belt together with Road inaugural invokes memories of the multitude of traders who visited us inward the past times together with contributed to our prosperity. Already the Chinese largess is impacting on a swath of countries together with regions. Islamic Republic of Pakistan has been promised USD 54 billion inward investments inward infrastructure. The Bangladesh-India-China-Myanmar corridor volition link Red People's Republic of China with the Bay of Bengal.
Africa reaping the benefits of China’s investments
Africa is reaping the benefits of China’s investments together with many African economies are prospering for the starting fourth dimension time inward many years. By 2014, Chinese investments inward Africa had risen to a greater extent than than 20-fold to $220bn according to the Red People's Republic of China Africa Research Initiative at Johns Hopkins School of Advanced International Studies inward Washington. Certain reservations concerning Chinese investments have got also emerged. It is probably that this tendency volition accelerate every bit Red People's Republic of China also learns from experience together with responds to a greater extent than to the intrinsic aspirations of the people of the continent.
Since 2000, Federal Democratic Republic of Ethiopia where the African Union is headquartered, has been a major recipient of Chinese loans to Africa, with financing for dams, roads, railways together with manufacturing plants worth to a greater extent than than $12.3 billion, to a greater extent than than twice the amount loaned to oil-rich Sudan together with mineral-rich Congo.
The OBOR concept piece raising some concerns, especially alongside the onetime colonial powers who ruthlessly ravaged Africa together with Asia when they had the opportunity, tin live on used past times countries of the Indian Ocean part together with beyond to heighten their mutual prosperity without beingness constrained past times the fears together with suspicions inculcated past times the colonial past. More importantly, without territorial occupation, racial discrimination together with forced touching on cultures.
Further East, Commonwealth of Australia received AUD 15.4 billion inward Chinese investments involving 103 deals. Commonwealth of Australia has been a major finish for Chinese investments after the United States of America together with Europe together with investors have got grabbed hotel assets, existent estate, agri businesses, vineyards, wellness care, infrastructure, etc, giving ascension to a latent xenophobic anti-Asian together with anti-Chinese sentiment. The port of Melbourne is instantly controlled past times a Hong Kong-Chinese concern.
Europe together with USA also have Chinese investments
A pregnant part of Chinese investments has also headed to Europe. The European Union whose mo largest trading partner is China, received Euro 35 billion inward Chinese investments inward 2016 alone. Iconic facilities such every bit the Toulouse Blagnac aerodrome where the Airbus 380 is assembled (sold to the Shandong Hi-Speed Group together with a Hong Kong investment business solid piece Emanuel Macron was the Finance Minister), Volvo (to Geely), the air conditioning Milan football game club, the Piraeus harbour (owned 70% past times COSCO), High German robot manufacturer Kuka (now owned past times a Chinese company). Not to shout out a number of historic vineyards together with buildings are inward Chinese hands. Chinese companies are edifice the rail link betwixt the Piraeus harbour together with Serbia together with Hungary.
Trains carrying East Asian products instantly move through the Euro-Asian ground mass, the modern Silk Route, to European capitals, including London, together with also link upwardly with Tehran. The Asian Railways Network sponsored past times ESCAP provides Southern Asia also the chance to link upwardly with the European network through Central Asia. Tremendous merchandise opportunities could opened upwardly up with a high speed railway linking Southern Asia with Europe. Natural gas from Central Asia flows along 4 pipelines to China.
The U.S. has received USD xc billion inward investments since 2007. In New York, the Waldorf Astoria has been acquired past times Chinese interests. However, Red People's Republic of China has also tightened overseas investments, especially inward existent estate, hotels, celluloid together with amusement together with sports clubs, to trim back excessive uppercase outflows together with unusual central risks. Those countries seeking to do goodness from the Chinese gravy educate should live on witting of this development.
The expansion of China’s economical together with political attain has caused to a greater extent than than a few nervous reactions inward sure international circles, especially alongside powers which had been used to dominating Earth stage. France, FRG together with Italy are leading an inaugural to require the European Union to scrutinise Chinese investments inward Europe to a greater extent than carefully.
Recently, it has been said that America’s focus on terrorism every bit the original threat has instantly shifted to Russian Federation together with China. According to a novel Pentagon strategy released of late past times Defense Secretary Jim Mattis, the U.S. must construct upwardly its state of war machine to laid for the possibility of a conflict with Russian Federation together with China. The U.S. continues to take in Earth inward terms of hostile competitors.
China together with the U.S. closely intertwined
Given that Red People's Republic of China together with the U.S. are closely intertwined inward a complex economical embrace, the usage of such terminology is curious. The U.S. is China’s major trading partner. The bilateral merchandise inward 2016 was worth USD 579 billion piece the U.S. merchandise deficit was over USD 379 billion. And Red People's Republic of China is the original lender to the U.S. together with also holds over 1.2 trillion Dollars inward U.S. securities.
China is the biggest marketplace for many U.S. agricultural products together with millions of Chinese tourists see the U.S. annually, non to shout out the thousands of students who written report there. Any conflict betwixt the 2 countries, including a merchandise war, would do irreparable harm to both, non to shout out the residue of the world.
The 2 countries have got a unique chance inward history to acquire away from historical powerfulness based contest to cooperate for the mutual good. Cooperation cannot live on managed inward a hurry but the chance is there. Many aspects of East Asian culture, including food, eating habits, traditional wellness care, yoga, Zen meditation together with mindfulness, martial arts, dress, philosophy have got been seeping inward to Western together with American life over the years.
The U.S. has been an inspiration inward liberal ideas, democracy, transparency, legal propriety, administration style, sports, music, film, etc. These ideas volition non live on adopted past times the East overnight. Nor volition the Eastern trend of living, faith or doing business concern live on adopted past times the West lock stock together with barrel whatever fourth dimension soon. It volition convey fourth dimension for a deeper understanding together with appreciation of each other.
There are clear opportunities for education the 2 to each other. Instead of thorax thumping together with posturing, it volition serve humanity’s interests improve inward the long run if the giants of the world, both Eastern together with Western, could cooperate for mutual betterment.
Similarly a major concern is India’s sensitivities regarding China’s outreach. The fact that the 2 countries fought a edge state of war inward 1962 together with have got occasionally skirmished along a disputed colonial edge have got non been forgotten. But India’s natural concerns together with sensitivities have got impacted on the thinking of the smaller countries of the Indian Ocean region. India’s growing human relationship with the U.S. has clear state of war machine implications.
The U.S. has of late agreed to sell Guardion drones to Bharat for maritime surveillance. India, piece strengthening its naval capabilities inward the Andaman together with Nicobar Islands, has also quietly developed strategic relations with Commonwealth of Australia together with Japan, participating inward regular articulation naval exercises.
India, Red People's Republic of China together with Sri Lanka
India maintains a base of operations inward the Republic of Seychelles together with has simply concluded an understanding to construct an airstrip together with a sophisticated “monitoring station” at a terms of US$45million. Bharat has also signed a Bilateral Agreement for Navy Cooperation with Singapore that provides Indian Navy ships temporary deployment facilities together with logistics back upwardly at Singapore’s Changi naval base, which is nigh the disputed South Red People's Republic of China Sea. Indian state of war machine strength inward Indian Ocean part is formidable.
It seems unlikely that China, fifty-fifty if it wished, would live on rash plenty to challenge nuclear-armed Bharat inward the Indian Ocean for decades to come. Bharat enjoys overwhelming state of war machine superiority inward the Indian Ocean. Furthermore, the U.S. maintains a mammoth base of operations on Diego Garcia to the S of Sri Lanka. It is highly improbable that Chinese policy makers would consider challenging the existing powerfulness arrangements inward the Indian Ocean whatever fourth dimension soon, if ever. They have got non done so since Admiral Zheng He’s flotilla entered the Indian Ocean inward 1405 together with paid a few visits till 1433. To over extend inward monastic tell to encounter a possible challenge from Red People's Republic of China would effect inward expending scarce resources for a confrontation that is unlikely to happen.
Sri Lanka, every bit a pocket-size neighbor eager to ascend the evolution ladder inward the shortest possible fourth dimension is caught betwixt the sensitivities of our closest neighbor together with the demand to develop stronger together with pragmatic economical relations with another. There is petty doubtfulness that every bit a long fourth dimension friend together with a province that has provided much of Sri Lanka’s religious, especially Buddhism, together with cultural inspiration, Sri Lanka must create together with hold an surroundings that makes Bharat comfortable.
Sri Lanka’s diplomatic comfort grade with Bharat has e'er been cherished. Bharat has been a major origin of investments together with tourists. The large neighbor must experience the reassurance that the pocket-size isle to the S volition non pose a strategic threat, together with volition non collude with whatever other country. It should never acquire mortal else’s large aircraft carrier! Sri Lanka’s ain interests volition live on served good with a reliable human relationship with India.
This does non hateful subservience or a one-way approach dominated past times hectoring together with gratuitous advice. The relationship, if it is to live on comfortable together with sustainable, must live on 1 betwixt 2 proud sovereign nations. Bharat has a positive usage to play every bit the bigger together with stronger neighbor to the north. India’s burgeoning economic scheme could render a create outlet for Sri Lankan businesses to expand but over-zealous together with rash opening upwardly of our economical doors with no comparable reciprocity would for certain create unease.
Sri Lanka must seek its ain evolution path together with that mightiness hateful seeking to collaborate with whomever nosotros like, including China. Sri Lanka has maintained splendid relations, especially economic, with Japan, Korea, Malaysia, Singapore, Thailand, etc. China, coincidentally, is India’s major trading partner. Nippon has been a consistent origin of evolution funds together with political back upwardly for Sri Lanka.
Both the Chinese together with Indian leaders have got made explicit overtures to each other with repeated references to historical religious, cultural together with trading links, both recognizing the opportunities presented past times cooperation than past times confrontation. China’s Buddhist links with Bharat go dorsum a long time. Recent efforts to recalibrate the bilateral human relationship volition live on welcomed past times all.
A prosperous together with stable Sri Lanka volition live on an property to Bharat non an unhappy together with resentful neighbor to the south. Sri Lanka’s prosperity including through the Belt together with Road inaugural volition live on to India’s wages every bit well. Bharat could also do goodness extensively from a proactive appointment with the OBOR initiative.
*The author is onetime Permanent Representative of Sri Lanka to the UN together with onetime Foreign Secretary. – The Editor
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