Its domestic
conditions determine foreign policy for Sri Lanka. It is an island country in
the Indian Ocean, separated by the Palk Strait from the Indian subcontinent. Its
location has given Sri Lanka more strategic freedom to determine its diplomacy
independently than other South Asian countries. Though Sri Lanka is not an
advanced country, its economic statistics are better than most other economies
in South Asia.
His people have
every reason to pursue higher economic objectives. The country sits on one of
the busiest shipping lanes in the Indian Ocean. The shipping lane is a dynamite
location destined to bring enormous wealth to Sri Lanka. Due to its poor
infrastructure, however, it was difficult for the country to take advantage of
the transport road.
Cooperation with
China reflects the desire of Sri Lanka to take advantage of its geographical position
and become a transportation hub in the North Indian Ocean. But the ambition of
Colombo has made other major regional powers uncomfortable. They're entitled to
be concerned. Sri Lanka, however, also has the right to make policies in line
with its interests.
OSL Take: With this new political arrangement, Sri Lanka
is in a position to continue to pursue its development projects with a strong
ally in China. It is particularly noteworthy that within weeks of signing a
similar type of agreement with India, this agreement comes in. It outlines the
determination of governments to work with regional leaders and to enable them
to support the development of Sri Lanka. Such an arrangement also describes the
willingness of the government to maintain an increasing but neutral economic
relationship with two of the world's largest leading nations.
A Neutral Stance
will go a long way towards ensuring economic stability as well as diversifying
the risk dimension of increasing dependency on a more massive nation.
Sri Lankan-based
industries will receive a significant boost due to the many infrastructure
projects that the Chinese backed investors will be carrying out, and for a
potential investor this would mean significantly upgraded, and new operational
infrastructure will be in place.
China may enter
into a free trade agreement with the Sri Lankan Ambassador to China within the
year, sources say. Sri Lanka has stated that the best way to celebrate the 60th
anniversary of diplomatic relations with China is through the signing of a free
trade agreement.
Such an FTA
would further improve the benefits and level of integration achieved by this
agreement and would also enable both Chinese investors to invest in Sri Lanka
and open up new avenues for Sri Lankan businesses to tap into a much more
comprehensive marketplace and investor pool.
Another area
that can be included in this arrangement is tourism. The government of Sri
Lanka is expanding its search for investors to add significant headwinds to the
tourism industry in Sri Lanka. China could be a successful partner in
attracting both Chinese tourists and attracting world-renowned hotel chains
based in China to operate in Sri Lanka. We can expect the Chinese backed investors
in the hotel arena to see Sri Lanka as an attractive option due to both
government support and increasingly strengthened relationships. Moreover, with
many landmark projects close to completion in Sri Lanka, Sri Lanka will become
an attractive option for visitors around the world.
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