A foreign policy for national development

Posted on July 3, 2017  /  0 Comments

Below is what I planned to say when introducing a panel on foreign policy for national development at the Lakshman Kadiragamar Institute on the 29th of June. Given time constraints, I did not say it all, but it reflects what I did say.

Sri Lanka is like Greater Mumbai. Our small size as well as our location define our position in the world and determine our foreign policy.

As we become wealthier as a country and as individuals, much of our consumption is of foreign made goods. Our current major export, apparel, depends on imports of critical inputs. Even the tea bushes that form the basis of the second largest export are kept productive by the application of foreign-manufactured fertilizer. Remittances sent by 1.1 million expatriate workers amount to a total of USD 7.2 billion which is about the same as what we earn from service exports.

While our trade dependency decreased significantly in the past decade, we remain highly globalized. Between 1970 and 1977, we tried to be self-sufficient. The results were not limited to low growth in GDP. Caloric intake of 43 percent of the population declined to below minimum levels of nutrition and children with Kwashiorkor and Marasmus were observed in Colombo.

So our national development is inextricably connected to our engagement with the rest of the world. We cannot have an effective development policy without an effective foreign policy.

Until the end of the civil conflict, politics tended to over-shadow economic considerations, as exemplified by the loss of GSP Plus. The new government making the restoration of GSP Plus one of its highest priorities is indicative of the emergence of economics from the shadows.

In this session we will discuss geo-economics, not geo-politics. We will discuss in depth commercial diplomacy and energy.

Our size and location should define our priorities in the areas of commercial diplomacy and energy. We cannot make the peaks and the troughs of our diurnal electricity consumption pattern without connecting to a larger grid, the only available one being the South Indian grid which is just 24 kilometers away. Without a bigger grid we cannot fully exploit the potential of renewable wind energy which is already at 128.4 MW. Engineers and economists keep raising this issue, but it has not been a diplomatic priority.

We need a High Voltage Direct Current cable across the Palk Strait. How does this fit with Indian energy diplomacy? Should the cable be under the water or should it be part of a bridge? What are the economic terms under which electricity should flow sometimes from Sri Lanka, and sometimes from India? How can concerns about Indian interference of the kind seen in Nepal and Bhutan be addressed?

This is an example of the intertwining of energy and commercial policy and national security considerations. I am sure our panelists will shed light on these inter-relationships and we will be able to come up with 3-4 actionable recommendations at the end of the discussion.

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