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Sri Lanka and the Born-again Commonwealth

Mar 20 2017 (The Sunday Times - Sri Lanka) - Interestingly, if not ironically, the British Government having voted to exit the European Union (EU) in accordance with the wishes of a majority of its people, is now looking forward – or maybe looking back – at the Commonwealth once again.

The 53-nation Commonwealth, the third largest global grouping, next only to the United Nations and the Non-Aligned Movement, was often contemptuously dismissed as a club living in the somewhat inglorious past of the British Empire serving neither man nor beast. And then, Britain, the primus inter pares in this club, itself dumped the Commonwealth for a new and more attractive bride – the EU, until it found that was a mistake.

Marking Commonwealth Day last Monday, a day long forgotten except by the titular head of the group, the Queen of the United Kingdom, Britain’s Prime Minister Theresa May spoke of a “truly global Britain”, a clear reference to looking beyond Europe – and re-engaging with other countries, mainly the Commonwealth of nations.

The week before, Trade Ministers from 35 of the 52 member-states, including Sri Lanka’s Trade Ministers met in London. (Yes; we have two Trade Ministers). The fact that the Commonwealth Trade Ministers were meeting for only the first time since 2005 spoke for itself.

Sri Lanka’s International Trade Minister Malik Samarawickrama gave a sound-bite to the media on the sidelines of the meeting saying it was the right time “for a new Commonwealth trading bloc”. Unfortunately, we have no further information on what this ‘new Commonwealth bloc’ is until the Minister enlightens us.

Britain’s decision to sideline its age-old trading partners in the Commonwealth was recognised at that very meeting and the country was asked, not necessarily to beg forgiveness, but to re-approach with “a degree of humility” old partners who were cast aside.

As Britain moved away from the Commonwealth (its funding dried up so much that the Commonwealth Press Union once known as the Empire Press Union, had to fold up, one day short of a hundred years of existence), so did the other Commonwealth countries move away from Britain. They had to seek new trading partners. Many countries found a great new economic partner — China.

China has spread its tentacles — and its influence far and wide, especially in the Asia-Pacific region and Africa where much of the Commonwealth membership is. As everyone knows, Sri Lanka too has had to look to China in recent years for economic succor, though not necessarily in trade.

Last year, Sri Lankan exports plummeted by as much as 3 percent and this decline continues despite what was an anticipated prognosis that a new pro-West Government in 2015 would attract more markets abroad. With its mainstay, garments only showing a marginal increase, and the EU still keeping Sri Lanka waiting for the GSP+ concessions, the country’s Balance of Payment problems have aggravated. The domino effect on the ordinary citizen is felt by inflation topping income levels and the resultant rise in the Cost of Living.

With the rupee continuing to slide to the US dollar, some expecting it to hit Rs. 160 sooner than later, all imported items will be costlier. Economic analysts point out that if the Sri Lankan consumer, especially the growing middle class, is forced to cut back on his or her lifestyle, it would have a knock-on effect on foreign investors who will not see Sri Lanka as a worthwhile market to invest in. The only attraction then in Sri Lanka would be for manufacturers seeking re-export facilities to third countries.

Our Economic analyst, Dr. Nimal Sandaratne, a former Deputy Governor of the Central Bank said last week in his column that Sri Lanka’s crisis is because of “the fundamental weaknesses in the trade balance, capital outflows, the non-realisation of expected inflows of Chinese capital and inadequate foreign investment”. Our exports earnings are only a little over a half of our import bill.

Many economic analysts blame inconsistent statements and actions by the National Unity Government for the lack of investor confidence in Sri Lanka. UNP Ministers and SLFP Ministers talk differently on economic policy leading to confusion all round. Unable to articulate their intentions properly, coupled with a veil of secrecy in what the pro-free market UNP Ministers want to do has given rise to suspicion that a cabal is dictating the Government’s economic agenda. This in turn, has met with objections from SLFP Ministers, including the President. SLFP Ministers more comfortable with an outdated pro-centralised economy are often tripping up the UNP Ministers, the result being the Government is going nowhere.

Sri Lanka is not ‘the only girl on the beach’ anymore. Many other countries have already made inroads into markets which Sri Lanka long thrived on; tea, apparels, tourism and while some of these newly emerging countries have already forged into diversified fields like electronics, Sri Lanka stagnates. Free Trade Agreements with Singapore, China etc., controversial as they are, still remain on the drawing boards and an FTA + called ETCA with India has already raised an anti-Indian bogey.

Going back to Britain’s Commonwealth ‘Born Again’ strategy, it is pertinent to note that while it calls for a return to the past, an all-party parliamentary group for Tamils (Sri Lankan Tamils only, it seems) just late last month slammed the Government of Sri Lanka for slow progress in post-war reconciliation and the setting up of a war crimes tribunal with foreign judges via the UNHRC Resolution 30/1 in Geneva.

The British Government, with its Lilliputian allies like Macedonia and Montenegro, who have nothing to do with Sri Lanka are now the new promoters of Resolution 30/1 in Geneva. Only MP Ian Paisley defended Sri Lanka in the House of Commons committee saying when Britain rejects an international inquiry into ‘Bloody Sunday’ or the Iraqi invasion, it runs the risk of being hypocritical in asking others to hold international inquiries. To a lesser degree, the former foreign affairs state minister Sir Hugo Swire said that the very fact that the parliamentary group was for the interests of the Tamils in Sri Lanka displayed how anti-integration the British Parliament might be seen to be and added that what all Sri Lankan communities want right now is “economic prosperity”.

Last month, Sri Lanka marked 69 years of Independence from Britain, but it has not sunk into many British MPs that the writ of Westminster no longer holds sway over this country. Maybe, they are only pandering to some of their constituents, but the British Government will have to make a call on wanting to do business with its old Commonwealth partners, while hauling some of them over the coals at the same time.

 
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