We are Still Hopeful of Taking Advantage of Sea Lanes – State Minister Tharaka Balasuriya
State Minister of Regional Cooperation Tharaka Balasuriya speaks to Ceylon Today on the regional interest the government has particularly in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) which is chaired by Sri Lanka. On international investors from US allies such as India, Japan, and Australia have not yet focused on Sri Lanka, the Minister said, “What we have to do is offer the right value propositions, and when we do that I am confident companies from any of these countries will do business in Sri Lanka.”
By Sulochana Ramiah Mohan
Despite Sri Lanka being located on the busiest East-West lane, it has not reaped the best benefits using its potential but instead is categorised as a highly debt-ridden country in the region. How can we change this position under your government?
A: It was the intent of the Mahinda Rajapaksa regime when they embarked on the Hambantota harbour project, to utilise Sri Lanka’s strategic location and convert it into a regional hub. Although the asset has now been given on a long-term lease, we are still hopeful of taking advantage of the sea lanes. Therefore, we feel, with ships getting bigger and bigger, and ports needing more space to dock these vessels, a large port like Hambantota will be useful.
The debt-ridden aspect is mainly because of the mismanagement of the economy by the previous Government. In 2015 when Mahinda Rajapaksa took over the Government the Debt-to-GDP ratio was 71.33% and when the country was handed over in 2019, this figure jumped to more than 86%. Therefore, we are careful in going for debt options and are more focused on investments and joint ventures both local and foreign partners.
President Rajapaksa said no more loans but we would embrace international investments. With the ongoing row between China and the US, do you think US allies such as India, Japan, Australia and the EU countries, will invest in the Port City, at Hambantota Port and at the Industrial park located in Hambantota? How would you attract them?
A: The geopolitical tensions between the US and China has not stopped the US companies from investing in China or the Chinese companies investing in the US. Despite all these tensions, that figure was about $14 Billion in 2019. Chinese investments in the US were $5 Billion. There is a similar story between Europe and China.
Furthermore, I have to mention that even Port City is a Sri Lankan project; it is a Sri Lankan project where we have allocated them a piece of land. This is the same in the case of the Hambantota Industrial Parks.
What we have to do is offer the right value propositions, and when we do that I am confident companies from any of these countries will do business in Sri Lanka.
Sri Lanka is the current chair of BIMSTEC and has to set the date for the next summit. When would it be?
A: Sri Lanka informed at the 21st Session of Senior Officials’ Meeting that we are planning to hold the Seventeenth BIMSTEC Ministerial Meeting and the Fifth BIMSTEC Summit in early January 2021. This Ministry has sought the advice of the Presidential Secretariat on the modalities and the date on hosting the Fifth BIMSTEC Summit. The 17th Ministerial Meeting will precede the Summit.
Sri Lanka has focused on the need for institution building, through the finalisation of the BIMSTEC Charter, and the allocation of defined areas of cooperation among the Member States, in order to add focus to the future activities of BIMSTEC. By doing so, Sri Lanka looks forward to ensure that sectors led by each Member State will make greater headway by the time Sri Lanka hands over to Thailand, so that Thailand could focus on taking the next lap of BIMSTEC to something truly productive.
Bilateral and trade ties seem to be power centric but BIMSTEC with seven nations of South Asia and Southeast Asia, housing 1.5B people and having a combined gross domestic product of $3.5 trillion, the prospects are enormous. We have a second chance to try it out post-pandemic scenario. Are we working on a roadmap to boost BIMSTEC to take it to a next level with some serious input? Even our trade and tourism with BIMSTEC is excessively poor. Do you see better prospects in this area as well?
A: There are very many multilateral agreements such as the APEC and ASEAN. While the prospects are enormous, in order for multilateral agreements to flourish, it has to be a win-win situation. This is not a zero-sum game however. By collaborating, if we can emulate ASEAN it will be a win-win for everyone. If this isn’t the case, issues may arise.
One of the key components to the success of these agreements is political will of the leaders of the nations. Therefore, while I see great prospects within BIMSTEC, the fulfilling of the potential of is down to the actions we take both individually and collectively.
Sri Lanka's Foreign Secretary Admiral Prof. Jayanath Colombage at the senior officials’ meeting held on 2 September 2020, urged the BIMSTEC member states embrace the new normal and adapt fast, meaning to work around the pandemic situation. Can this be elaborated?
A: It is understood that things have changed because of Covid-19. The Secretary was right in saying that we have to work in a new normal, because many an expert has already said that we will not go back to the pre-Covid-19 normal for another year or so.
In saying that, are we to hold on to business and economic activity? Are we to put a halt making decisions and taking action? What we need to do is to find ways to get our work done, push our economies forward and facilitate the progress of the country in these less than ideal circumstances. I believe that this is what the Secretary was trying to articulate.
Autocratic governments such as Taiwan, Vietnam and Singapore have brilliantly performed in pandemic preparedness but BIMSTEC countries including Sri Lanka and India in spite of COVID-19 management being in place, the virus spread is on the rise. How can the region effectively deploy technology to manage the pandemic?
A: I’m not sure about the classification of the countries you have mentioned are necessarily autocratic. Even in democracies with strong Parliamentary majorities, it helps if legislation can be brought forward in such times as this to take decisive actions.
What we have to remember is that this is a learning experience for the whole world. Many countries in Scandinavia adopted a ‘no lockdown’ approach but are now having to change their strategy.
In addition, we must note that all these countries are different with different areas of concern to address. While we can share knowledge within the region, all Government will take steps based on what they feel is the best course of action to mitigate the issues that arise with this pandemic as there is no one size fits all answer.
China has created a new Asia-Pacific Trade Pact joining ASEAN called the RCEP where some of the countries of the BIMSTEC are there. Will that hamper the BIMSTEC roadmap or should the BIMSTEC welcome such a new move?
A: Countries tend to decide on entering a free trade agreement based on the benefits or lack thereof, to their economies. Whether we welcome the move is immaterial as the parties concerned have already taken the decision for their economic benefit. Similarly, we also believe in an integrated world and feel that we should explore the opportunities that arise as a result.
In addition, a decision to enter an FTA does not mean that they will halt business with others. Singapore for example has signed FTAs with multiple partners but they are not exclusive in doing business with those partners only.
Business takes place where there are high returns and as long as we can offer that favourable environment, we can attract interest.
Some say RCEP by China is to protect its Asian interest and that Sri Lanka should be careful as India has already said no to it. Sri Lanka is left with many choices in boosting FTA with many countries and our foreign policies have been politicised in the past. How will it be in the coming years?
A: Sri Lanka is in the process of developing a trade policy and a framework. We also need to improve our legal framework before entering into FTAs.
India for example, regardless of the FTAs they get into tends to protect their tribal handicrafts. This is also the case for many nations when it comes to agricultural produce. We need to understand our stance on our domestic industries.
We need to formulate these policies and apply the rules to ensure that the results of entering an FTA do not prove to be detrimental.
It’s based on the policies we place and our economic interests that our future course of action will be determined in the coming years.
Under US President Joe Biden do you see a strengthening tie in the Indian subcontinent? What role could the US play especially with regard to defence and security cooperation? India, the Maldives and Sri Lanka will set up an intelligence-sharing to fight terror, drug-trafficking and maritime security. How important is this for BIMSTEC and can such a network for all the BIMSTEC countries be put in place?
A: We have always maintained a foreign policy of non-alignment and now also have 20-point foreign policy directive which guides our work.
America’s policy within the region has been largely consistent over the years regardless of the administration that has been in office and we are happy to cooperate with them in any way that we see is beneficial to our interest as well.
The same applies to our arrangement with India and the Maldives. While the partnership with our two closest neighbours is essential to us securing our nation’s borders, particularly from the increasing threat of drugs, we are committed to working with other nations also in sharing information as necessary.
Even in the case of terrorism, which has now become a cross-border problem affecting regions as a whole, it is vital we work with everyone willing to help. This strategy of cooperating with our regional partners aided us in defeating the LTTE.
Sri Lanka has resources and expertise in many fields. How could we support BIMSTEC?
A: As the lead country for science, technology and innovation with sub sectors technology, health, and human resource development, Sri Lanka has an important role to play within BIMSTEC during and post COVID-19 pandemic which has affected Member States adversely.
The Government is of the view that, only collective efforts based on cooperation can make the region flourish from the setback that has affected the very fabric of life.
The Government will put forward its proposals as the lead country on science, technology, and innovation to enhance the sector within Member States. Further, once the Memorandum of Agreement (MoA) on BIMSTEC Technology Transfer Facility, the Government will sign during the Summit, Sri Lanka will take the lead in setting up and operationalising the Centre.