If Britain can cozy up to China, why cant

Sri Lanka?
2015-10-26

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, Britains 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 Chinas 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 regimes 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-Presidents role in the
countrys infrastructure drive. Mahinda Rajapaksa can be blamed for many
things, but his regimes track record in revamping the countrys
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 Governments
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 countrys
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 someones 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 debtfuelled 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 selfinterest of the country, and by extension of its people, more than anything
else. If David Cameron and Osborne -- Ranil Wickremesinghes mates in the
International Democratic Union -- could do that, the new Government in
Colombo should well be able to emulate them.
Posted by Thavam