My take on News. Past Facebook posts.

SRI LANKA.

NEWS: “Sri Lanka Economy Has ‘Hit Rock Bottom,’ Putting Pressure on President.” The South Asian nation of 21.9 population was supposedly enjoying a fine GDP growth until problems ensue. Now the country’s Rajapaksa dynasty is facing its toughest challenge yet as protesters demand that the president step down amid a devastating economic crisis. Food and fuel are suddenly either unavailable or exorbitantly priced. New York Times: “Protests are rising against a president with a reputation for brutality.”

       Before the tempest, Sri Lanka's GDP in terms of purchasing power parity is the second highest in the South Asian region in terms of per capita income, according to the I.M.F. The country’s economy has always been strong. In the 19th and 20th centuries, Sri Lanka became a plantation economy famous for its production and export of cinnamon, rubber, and Ceylon tea, which remains a trademark national export.

       Formerly known as Ceylon, Sri Lanka was a strategic port importance for the British when it was under its rule between 1815 and 1948. After independence, socialism strongly influenced the government's economic policies till 1977. Colonial plantations were dismantled, industries were nationalized, and a welfare state established. In 1977, free market economy was introduced to the country, incorporating privatization, deregulation, and the promotion of private enterprise. I don’t see anything wrong with such a transition.

       But tough times followed. Sri Lanka's more recent history was marred by a 26-year civil war, which began in 1983 and ended decisively in 2009, when the Sri Lanka Armed Forces defeated the Liberation Tigers of Tamil Eelam. 🇱🇰🇱🇰🇱🇰

TOUGH times. Seems like the world is falling into a spiral of strife. Despite this challenge, Sri Lanka has a decent economic pace of 5.5 percent, coming from last year’s 3.7 percent, and 2020’s not surprising and expected -3.6 percent, which is a global downward GDP trend.  

       Sri Lanka has a globally competitive set of industries, topped by its world-class tea, apparel, textile, rice production, and other agricultural products. Tourism is also a huge income-generating business. In addition to these economic sectors, overseas employment contributes highly to foreign exchange reserves. A huge 90 percent of expatriate Sri Lankans reside in the Middle East, mostly workers in oil fields.

       As expected, Chinese investments are a fact of economic life in the region or in the country. China controls a key international harbor built on the southern coast and has a terminal in Colombo Port. In 2021, the government also awarded the construction and operation of an elevated highway on the outskirts of Colombo in exchange for a $1 billion investment.

       Meanwhile, a subsidiary of state-owned China Communications Construction Company has led several infrastructure projects in the country, including Hambantota Port and Mattala International Airport. Construction of the $1.4 billion Colombo Port City started in 2021. 🇱🇰🇱🇰🇱🇰

THESE are the events, political shudders, that serve as magnet for Washington to fortify its relations with Sri Lanka. Pretty much expected. China slows down its FDI aggressiveness when social strife sets in.

       Yet despite the obvious imposing trade presence of China in the region, the United States remains as Sri Lanka’s top trading partner. Next: United Kingdom, India, and Germany.

       But the more significant Washington interest in Colombo is military alliance although security relations were ruffled by the United States’ opposition to how the country’s army handled the long Civil War that ended in 2009 (from 1983). The thumbs-down didn’t amount to larger sanction, however.

       Meantime, during a 2020 visit by then Secretary of State Mike Pompeo to Sri Lanka—which also included India, the Maldives, Indonesia and Vietnam—Washington via President Trump’s rep denounced the Chinese Communist Party as a "predator" in front of Sri Lankan President Gotabaya Rajapaksa. With the current hawkish Biden administration, such words would mean a lot.  

       The U.S. Armed Forces maintain a limited military-to-military relationship with the Sri Lanka defense establishment. Yet these days, Washington and Colombo have enhanced defense relations beyond the sale of military equipment and military training facilities. 🇱🇰🇱🇰🇱🇰

Photo credits: BBC / Botschaft von Sri Lanka.