By Amila Muthukutti –

Amila Muthukutti

It is with the increasing interconnectedness of the countries in the world that the role of economic diplomacy has taken pride of place in today’s economic policies. In other words, the fact that how a government promotes the state’s economic interests, using its diplomatic ties with other nations, is highly critical to stay ahead of the economic competition. This has resulted in a higher number of bilateral and multilateral trade agreements and alliances. Consequently, every nation in the world uses its economic resources to achieve a set foreign policy target or vice versa.

Anura Kumara Dissanayake, leader of the National People’s Power (NPP) recently in an interview with BBC Sinhala Service revealed salient features of their foreign policy to promote trade and investments which always come under criticism, mainly due to misconceptions.

FDI

Needless to state that Foreign Direct Investments plays a crucial role in economic growth of developing countries like ours, as it injects not only capital but also technology into that economy. However, if that investment jeopardizes related industries and, in the end, national interests, it should be ruled out without delay. In my view, it cannot be interpreted as being against foreign investments.

Anura Kumara Dissanayake, elaborating his stance on foreign investment, stated that they are not against AMUL Dairy’s investment in Sri Lanka, but against giving authority of the dairy industry to a foreign investor. In his words, Sri Lanka Telecom PLC is the institution whose job is to develop infrastructure for the IT industry in the country, when sold to a competitor, can we expect that foreign investor to upgrade infrastructure necessary for development of the IT industry? Similarly, Sri Lankan Airline is one of the main facilitators to Sri Lankan tourism, when sold to a competitor, can we expect that foreign investor to develop our national carrier, so that tourists can conveniently come to Sri Lanka? As the answer is NO, rulers should think twice, before strategically important enterprises are sold to foreigners.

Misconception

There is an attempt to spread the misconception among the public that NPP’s policies are unfavorable to investments and the economy, as its roots are with Marxism. However, we all can experience the plight of the economy that other two main parties have created for us. Recently, Shantha Jayarathne writing an article “NPP’s stance on foreign investment: Unravelling misconceptions”  in reply to Prof. Rohan Samarajiva’s article “JVP’s plan to exclude foreign investors from the energy sector” suggests readers to discern the nuances of the NPP’s stance on foreign investment rather than succumbing to misleading portrayals that may be driven by political motives.

When questioned about acquiring sold enterprises, Anura Kumara Dissanayake frankly replied that as an economically bankrupt nation, we are not in a position to bargain with other nations, while we are seeking donations or loans from them. This is to be appreciated, when other politicians promise to acquire those enterprises, after coming into power.

Foreign policy 

Anura Kumara Dissanayake obviously stated that their foreign policy is based on non-aligned policy, specifically mentioning on relations with China and India. Even though the Non-Aligned Movement (NAM) was established in 1961, when the world was divided into two; socialist camp headed by USSR and capitalist camp headed by USA, there are several superpowers including China and India at present. Therefore, it is imperative for Sri Lanka to have a non-aligned foreign policy which previous rulers deviated from time to time.

He further stated that with the power struggle between China and India, we should be mindful of the way in which India thinks of our economic and foreign policies. Sri Lanka’s foreign policy is likely to pose a threat to India, owing to its geographical location. On the other hand, Sri Lanka is important for China too. Hence, he identified it as their responsibility not to make the country a place for a proxy war between those two nations.

In conclusion, having strategically balanced relations with China and India without compromising the one with the other will be a key priority for any government in the future, as India is on a rapid economic journey. Strengthening bilateral, multilateral relations and most importantly trade agreements is also a highly contributing factor in this regard. Japan too must not be forgotten. It is a well-shaped and well-balanced foreign policy that creates new economic opportunities.