Foreign Policy of Sri Lanka

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 Content
Theoretical Approach of Foreign Policy
- State Relations
- Power
- National values, Aim and Interest
- Diplomacy
Sri Lanka
– A Historical , An Economic, Political and Socio-cultural Context
 
Foreign Policy of Sri Lanka

– Conceptual Framework of Diplomacy and Foreign Policy making

– Contours of Sri Lanka’s Foreign Policy
– Historical Aspects of Sri Lanka’s Foreign Policy
– Sri Lanka in Asia
– Sri Lanka’s Multilateral Diplomacy

The Indian Ocean Region and Sri Lanka’s Foreign Policy

 
Prospects and Challenges in Sri Lanka’s Foreign Policy
– Current Foreign Policy Approach
– Challenges for Foreign Policy Trends
– Emerging Sri Lanka’s Challenges & Opportunities as a Hub in the Region 
 
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 Content
Economic Diplomacy
– Trajectory of Sri Lanka’s Economic Relations
– Economic Strategy of Sri Lanka
– Prospects and Challenges in Sri Lanka’s Economic Policy
 
Emerging Sri Lanka
– Sri Lanka’s Economic Vision
– Western Regional Megapolis Project & Colombo Tech City
– Colombo International Financial Centre (Port City) Project
– Ports Development

Sustainable Sri Lanka 2030 Vision & Strategic Path and Sustainable Development Goals

Emerging Issues in the Indian Ocean

Sri Lanka Foreign Policy Issues

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 State Relations: A Theoretical Approach

 Classical Realism-
Theory of international relations established in the post-World War II era that seeks to explain
international politics as a result of human nature.

 Neo Realists –
Theory that says power is the most important factor in international relations.
It was first outlined by Kenneth Waltz in his 1979 book Theory of International Politics

 Power

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 Hans Joachim Morgenthau (February 17, 1904 – July 19, 1980,
German American) was one of the major twentieth-century figures in the
study of international politics.

 Works belong to the tradition of realism in IR theory

He is usually considered, along with George F. Kennan and

Reinhold Niebuhr, one of the three leading American realists of the post-
World War II period.

 Landmark contributions to IR theory and international law

 His ‘Politics Among Nations’, first published in 1948, went

through five editions during his lifetime.

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 Kenneth Neal Waltz ( June 8, 1924 – May 12, 2013, US])
was an American political scientist who was a member of the
faculty at both the University of California and Colombia
university and one of the most prominent scholars in the field of
IR.

 He was a veteran of both WW II and the Korean War

Waltz was one of the original founders of neorealism, or

structural realism

Waltz's theories have been extensively debated within the

field of international relations.

In 1981, Waltz published a monograph arguing that in some

cases the proliferation of nuclear weapons could increase the
probability of international peace.

Columbia University colleague Robert Jervis has said of

Waltz, "Almost everything he has written challenges the consensus
that prevailed at the time"[ and "Even when you disagree, he moves
your thinking ahead." 6
 POWER

What is Power?

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 POWER

What is Power?
 The ability or Capacity to do something or act in particular way

 The capacity or ability to direct or influence the behaviour of others ( Accordance with own
objectives)
Maritime Power

The ability of a nation to exploit the oceans to its advantage and also strengthens to protect this ability
from interference. It also implies the ability of a nation to influence others in peace and impose its will in
war.

Component of power
 Force
 Influence
 Authority

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 POWER

Elements of Power
 Geography
 Natural Resources
 Industrial Capacity
 Population
 Military
 Technology
 National character
 National Morale
 Leadership
 Quality of Society
 Governance
 Quality of Diplomacy

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 POWER

Instruments of Power 
All of the means available to the government in its pursuit of national
objectives. They are expressed as:

 Diplomatic
 Informational
 Military
 Economic

DIME

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 The Tragedy of Great Power Politics
 Great power fear each other

 States cannot depend on others for their own security

Each state tends to see itself as vulnerable and alone, and

therefore it aims to provide for its own survival

The best way to ensure their survival is to be the most

powerful state in the system

 The pursuit of power stops only when hegemony is achieved

There has never been a global hegemon, and there is not

likely to be one anytime soon

Determining how much power is enough becomes even

more complicated when great powers contemplate how much
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power will be distributed in future
 Hegemon Power

Hegemonic countries are ones deemed to have a very large advantage over all
other countries in the possession of such resources. Such an advantage is presumed to
translate into unusually great influence over the actions of other countries.

States adopt in alliance formation – balancing or bandwagoning

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 Foreign Policy

A country’s  foreign policy  is formed through a set of goals

about how the country will engage and work with other
 
countries economically, politically socially and militarily.
 or
Foreign policy means the policy of nurturing and promoting
one's national interest while interacting with other countries.

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Strategy

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 Foreign Policy

 National values
The values which evolve from a nation’s, history and culture. Democratic Socialist
Republic of Sri Lanka recognizes freedom, equality, justice and fundamental Human
Rights as core national values based on the constitution.

 National Aim
National aim provides the basis for defining national interests. Sri Lanka’s national
aim is derived from the Constitution, is the creation and preservation of a just and free
society guaranteeing the dignity and wellbeing of succeeding generations, with
unhindered economic progress, social and cultural order attained, the unity of the
country restored, and concord established with other nations.
 

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 Foreign Policy
 

 National Interests
The combination of national values and national aim gives shape to National
Interests which in turn determine the National Objectives. Sri Lanka’s national interests
are expressed in the Constitution.
 
 National Strategy
National Strategy is the plan for employment of various tools and instruments of
national power in accordance with the national policy, to achieve the desired national
objectives in support of national interests.
 

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 National Interest

‘National Interest’ is a key concept in International Relations.

All the nations are always engaged in the process of fulfilling or securing the goals
of their national interests.

The foreign policy of each nation is formulated on the basis of its national interest
and it is always at work for securing its goals.

It is a universally accepted right of each state to secure its national interests.

A state always tries to justify its actions on the basis of its national interest.

The behaviour of a state is always conditioned and governed by its national

interests.

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 National Interest

“The meaning of national interest is survival; the protection of physical, political and
cultural identity against encroachments by other nation-states”
Morgenthau.

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 Diplomacy

‘Diplomacy is the political process under which political entities are

interconnected with official relations in the framework of international
environment to formulate policies and strategies centered around their own
national interest and thus results in maximization of profit for the state’

Harold George Nicolson

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 Diplomacy

Preventive Diplomacy
Aims to prevent disputes for developing, or to prevent existing disputes from
escalating.

Naval diplomacy
The use of naval force in support of diplomacy to support, persuade, deter or
compel.

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 Diplomacy Historical Evolution

Greece, Byzantium and Renaissance Italy made the most notable contribution to the evolution of
Diplomacy

 Byzantine Diplomacy - concerns the principles, methods, mechanisms, ideals, and techniques
in order to negotiate with other states and to promote the goals of its foreign policy. Used the
formalized legal structure

 Italian Diplomacy: the practice spread from Italy to the other European powers. Milan was the
first to send a representative to the court of France in 1455.

 Diplomacy in Europe: Peace of Westphalia 1648 ( Treaties ended the 30 Y (1618–1648) war,
loss eight mil).

 Post Westphalia Diplomacy - New system for central Europe and peaceful coexistence , concept
of soveriegn states and lead to prevailing world order.

 Diplomacy in India : Kautilya, 4th Century

 

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 Traditional Diplomacy
Pre 19 century Dip lomacy is termed as Trad itional Diplomacy

Features
 Europe centric: Concert of Europe

Monopoly of Aristocratic class and of professional diplomats

Based largely on Bilateral basis and was usually undertaken in

secrecy

Agenda of traditional diplomacy was parochial and narrow in

comparison.

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 Naval Diplomacy
Naval diplomacy is a term which applies to a wide range of peacetime naval activities whose
purpose is to influence the behaviour of another nation. The use of naval force in support of
diplomacy to support, persuade, deter or compel.

Sir James Cable defines gunboat naval diplomacy as the use or threat of limited naval
force by a government, short of an act of war, in order to secure an advantage or to avert
loss. 

Naval blockade forms one such level of use of limited naval force in a spectrum that runs
from port visits by warships to freedom of navigation exercises to limited strikes on targets
ashore.

All of these actions are elements of coercive diplomacy which uses naval force to send
signals of interest, support and concern, or to force change in the behaviour of another state.

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 Naval Diplomacy
Emerged together with the Balance of Power System as at the heart of the transition lay the
suspicion of then public about the whole system of balance of power which they identified as the
main cause of the First World War

 Role of Diplomacy merged with secrecy and espionage

President Woodrow Wilson: Diplomacy to thrive in public view rather in private international
understandings

Integration of public opinion into Diplomacy and formulation of Foreign Policy

Change in the structure of the International Society: rise of multilateral diplomacy and role of
UNO

 The stage of diplomacy and shared with other Non-state actors

The agenda of new diplomacy also includes Economic and social welfare as well as military
issues.

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 Modern Diplomacy
In the post-cold war period, the role of Diplomacy has taken a huge turn.

Diplomacy in its current form helps not only in maintaining International peace and
security but also promotes International cooperation and helps in maintaining global
stability.


The widening of its agenda has resulted in a change of emphasis (economic,
environmental, energy, cultural and technological concern than on traditional high
politics)

The new method of diplomacy cooperated well with globalization


The globalization makes the world faster, which affected the way that diplomacy works
with such development as technology, which made diplomacy more transparent.


Media and social media now allows the information to spread faster to public and
sometimes even before the embassy receives the same information. 


The varieties method of diplomacy provided to new way of relations between countries
 

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 Changing Nature of Modern Diplomacy

 New issues : refugees, human rights, transnational crime and terrorism,

drugs, and the politics of environment, globalization, as well as the economics,
intellectual property, and technology concerns) require new forms of
diplomacy. This, in turn, has changed diplomatic techniques and practices.
 
 The new emerging problems are transnational and have its impact on every
country. In these circumstances, the central task of diplomacy is not only the
management of order, but also the management of change, and the maintenance
by continual activity.
 
 The scope of diplomacy has assumed formidable dimensions. It now
embraces not merely political but cultural, military, financial and commercial
as well as the technical matters.

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Historical Aspects of Sri Lanka’s Foreign Policy

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 Sri Lanka: A Historical Context

“Diplomacy requires a strong understanding of history and heritage”

• A new era in the history of Sri Lanka began in 1505 when the Portuguese arrived.
• In 1658, the Dutch took over the maritime provinces of Sri Lanka
• In 1796, Dutch rule gave away to the British.
• Sri Lanka became an independent nation on 4 February 1948. Diplomacy requires
a strong understanding of history and heritage. It enables diplomats to reach out
and engage with people, and to create connections that are solidified through
friendship.
• There are four integral factors that need to exist symbiotically to represent
heritage:
• Culture
• Environment
• Knowledge and wisdom from the past
• Next generation.

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 Sri Lanka Foreign Policy
PMs- D.S Senanaike, Dudly Senanaike, and Sir John Kotalalwela
Major Foreign Policy Initiatives 1948-1956

 Commonwealth emphasis

 “It will be the endeavour of my government to maintain friendly

relations with the countries of the Commonwealth” , D.S. Senanayake

 Friendship with everyone and enmity of non. A typical Small

state foreign Policy approach

 Policy of non align with any block and middle path.’

 Support for regionalism

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 Ten Principles of Bandung

The result of the 1955 Asian-African Conference was known as the Ten
Principles of Bandung, a political statement containing the basic principles in
the efforts to promote peace and cooperation in the world. The following are the
Ten Principles of Bandung:

1.Respect for fundamental human rights and for the purposes and the
principles of the Charter of the United Nations.

2. Respect for the sovereignty and territorial integrity of all nations.

3.Recognition of the equality of all races and of the equality ofall nations
large and small.

4.Abstention from intervention or interference in the internal affairs of

another country.

5. Respect for the right of each nation to defend itself singly orcollectively, in
conformity with the Charter of the United Nations. 30
 Ten Principles of Bandung Cont.

6. Abstention from the use of arrangements of collective defense to serve the

particular interests of any of the big powers, abstention by any country from
exerting pressures on other countries.

7. Refraining from acts or threats of aggression or the use of force against the
territorial integrity or political independence of any country.

8. Settlement of all international disputes by peaceful means, such as

negotiation, conciliation, arbitration or judicial settlement as well as other
peaceful means of the parties' own choice, in conformity with the Charter of the
United Nations.

9. Promotion of mutual interests and cooperation.

10. Respect for justice and international obligation.

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 Bandung Principles - Key

To respect state sovereignty and equality of individual state in accordance

with UN principles

To settle all international disputes by peaceful means in conformity with

the UN Charter

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 The FP of newly independent Sri Lanka under PM D.S. Senanayake

Focused on Asia and:

 Supported the independence struggle in Indonesia

 Recognized the People’s Republic of China
 Called for a formal peace treaty with Japan
 Sri Lanka and Australia proposed the Colombo Plan at the
Commonwealth Foreign Affairs Conference held in Colombo in 1950
 Entered into the Rubber-Rice Pact with China in 1952

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 1956-1960 Under SWRD Bandaranaike
A period of transition Foreign Policy Premises 1956 under SWRD

 Follow the policy of neutrality- Switzerland of the East

 Non Alignment

 Bring economic problems to the outside world Attention

 Make use of Foreign Policy to its own advantage.

Ceylon’s role in the promotion of international peace and justice.

 Ensure defence of the country

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 Evolution of foreign Policy activities under PM Mrs. Bandaranaike

from 1960 -1965 and 1970-77

 Personal Relations with State Leaders

 Commitment to NAM cause

 Independent Foreign policy making

 Radical NAM approach

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 Under President JR Jayawardena 1977-80

 “Strict Non Aligned Policy”

Non Existence of personal relationship between the leaders highlighted the

importance of relations with India.

Government’s western friendly foreign policy in the NAM policy

 Introduction of open economy policy .

Continuing Relations with China continue to develop further under JR

leadership. Friendship with China was established as a counterbalancing India’s
influence. Relations with Japan also warmed as well and focused on economic
assistance.

JR had a pro business and west leaning after he came to power in 1977.

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 Foreign Policy under President Premadasa 1989

 Two major issues confronted :

1. Tamil insurgency in the North and east and,

2. JVP insurgency in the South.

Indo-Sri Lanka Peace accord also remained controversial

during this period. Premadasa was not considered a friend of
India the sending away of IPKF, the expulsion of the British
High Commissioner and the closure of the Israeli interest section
were bold and courageous decisions.

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 FP under President Kumaratunga 1994-2003

Foreign Relations, aimed giving Sri Lanka a new dignity and a new image within the
comity of nations

Sri Lanka’s foreign policy on an “even handed that safeguards the country’s national
interests while at same time fulfilling its international obligations as an active participant on the
world stage

The changed attitude of her Government towards the promotion and protection of human
rights

Building investor confidence and promoting Sri Lanka as a gateway to South Asia.
Realisation that the multipolar world

 The Indian Ocean Policy.

 Look East Policy

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 Foreign Policy Under President M. Rajapaksa

 Strong NAM and Developing country Centric

 Leaned towards Chinese Partnership

 Balancing to Indian concerns

 National Priorities outweighed international obligations

 Balanced Middle-East policy

 Negative Western sentiment

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 Unity Alliance Foreign Policy Goals

Promotion of Relations with every country Enmity with none- Renewal of

relations with west, and UN systems.

Leveraging Indian resources to accelerate growth through cooperation and

ensure security of the sea lanes

Market access through securing trade concessionary terms such as GSP+ and
Free Trade and services with India, China and Singapore.

 Modification to rule based system to promote FDI

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Prime Minister of Sri Lanka at the Indian Ocean Conference on 1st September
2016 Shangri La Hotel, Singapore

 
Recognised living in a globalized new world. In that context, every country in
the world is important to us.

Government to pay more attention towards an Asia-centric middle-path foreign

policy.

Sri Lanka to be economic hub of Indian Ocean Region

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 Unity Alliance measures
 Renewal of Engagement with UN systems

Significant steps to strengthen democracy and good

governance and foster reconciliation

 Transitional Justice Process-

Signed Climate Change Agreement that take into account

national concern and formulate long term national policies.

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 Unity Alliance measures

 Endorsement Sustainable Development Goals and Agenda

 UN Peace Keeping

 Pro-business and Investment Policy

 Cooperation in Indian Ocean

 Leveraging Diaspora

 ICT Development

 Became signatory to Cluster Munition and Landmine Conventions

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 Sri Lanka: An Economic Context

Evolving Asian Economic Outlook and Implications for Sri Lanka

 
• IMF forecast world growth at 3.7% in 2018-2019 and growth in developing Asia at about 6.0%.

• Asia’s rapid growth is underpinned by a rapidly growing India, a moderating China and steady growth in South-
East Asia.

• In terms of population, developing Asia will be the world’s largest region.

• Looking towards 2025, it is likely that Asia’s global rise will continue but at a slightly reduced pace than before.

• The region’s share of world GDP will reach 30.5% and Asia will largely be a middle-income region by 2025.

• Some of the risks include:

• The likelihood of a third financial crisis .

• There is an overall rise in trade protectionism in the post-crisis area, especially the trade war between the US and China.
• There is a slowing of foreign direct investment (FDI) inflows to developing Asia
• The South China Sea has faced issues relating to its maritime security.
• The Indian Ocean also faces a variety of rising traditional security threats and non-traditional threats (e.g. maritime crime and environmental
degradation).

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 Sri Lanka: An Economic Context

Some key mega-trends—that would be game-changers for Asia—are (i)

China’s ever-evolving GVCs, (ii) China’s Belt and Road Initiative that will be
larger (in funding) than the Marshall Plan, and (iii) aid becoming scarcer for
middle-income Asia and rising dependence on the capital markets, which
entails risks to borrowers.

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 Sri Lanka: A Political Context

“Sri Lanka’s location heavily influences its political leverage within the region,
and in the sub-continent and globally”

• The operation of the political system in a country is greatly influenced by

its political culture.

• Sri Lanka is not a homogenous society. It is multi-ethnic, multi-religious

and multi-linguistic.

• Except for one occasion Sri Lanka’s armed forces have not attempted to
seize political power.

• The universal adult franchise was introduced 1931.

• Sri Lanka has been described as the “oldest democracy in Asia.”

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 Sri Lanka: A Socio-cultural Context

“Sri Lanka is home to eight UNESCO World Heritage sites”

• Sri Lanka is a multicultural and multi-religious country.

• Ethnicities range from Sinhalese, Tamils and Muslims to Burghers, the latter are the
descendants of the Portuguese and Dutch who colonised Sri Lanka prior to the
British.

• Sri Lanka is home to eight UNESCO World Heritage sites.

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 Foreign Policy of Sri Lanka
Contours of Sri Lanka’s Foreign Policy
 
“Sri Lanka makes its best contributions to the international community when it leads
from the centre, rather than positioning itself in a manner either to be taken for
granted, or to remain isolated”

• Focused on two elements:

– Priorities and imperatives of Sri Lanka’s foreign policy
– Actors, pressures and challenges faced when formulating foreign policy.

• European colonisers; first the Portuguese in 1505 A.D, later the Dutch in 1658 and
finally the British in1796, from whom Sri Lanka gained independence in 1948.
• It is noteworthy that Sri Lanka did not engage in a violent struggle for its
independence.

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 Foreign Policy of Sri Lanka

• The first PM of independent Sri Lanka, D.S. Senanayake retained the British
legacies, especially the civil service, administration, judiciary, and the Westminster
form of governance that were inherited from its colonial past, and joined the
Commonwealth.
• He continued close economic and political ties with the West, and as a result Sri
Lanka was subjected to the international tug-a-war that was unfolding in the early
years of the Cold War.
• Sri Lanka was blocked from obtaining a seat at the United Nations.
• 1955 secured membership of the UN
• 1956 under PM S.W.R.D. Bandaranaike Sri Lanka established diplomatic relations
with China and the USSR.

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 Foreign Policy of Sri Lanka

• Sri Lanka took several bold positions:

– The signing of the Rubber-Rice Pact with China (1952)
– SL position on the Suez issue (1956)
– Nationalisation of foreign owned oil companies (1962)

The efforts made by Sri Lanka to resolve the citizenship question among the Tamil
community of recent Indian origin (1964/74)

Maritime border issue with India (1974/76) were demonstrative of a mature and
practical foreign policy.

Efforts taken to reconcile differences between India and China following the 1962
Sino-Indian border conflict, showed considerable diplomatic maturity.

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 Foreign Policy of Sri Lanka

• Pursued Afro-Asian solidarity from the Colombo Powers (1954) through Bandung
(1955)
• 1961, emerged as a founding member of the Non-Aligned Movement (NAM). Mrs.
Sirimavo Bandaranaike, the world’s first woman Prime Minister, played a pivotal
role in fostering NAM together with President Nasser of Egypt, President Tito of
Yugoslavia, Prime Minister Nehru of India and President Sukarno of Indonesia.
• PM Bandaranaike hosted the NAM Summit in 1976 marking a highpoint of Sri
Lanka’s multilateral diplomacy.
• Ambassador Shirley Amarasinghe chairing the Law of the Sea Conference in 1974
• Dr Gamini Corea’s role as Secretary General of the UNCTAD 1974-1984
• Ambassador Jayantha Dhanapala chairing the Review Conference on the Non-
Proliferation Treaty in 1995.

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 Foreign Policy of Sri Lanka

• Despite having being invited to do so, Sri Lanka passed on the opportunity
to join ASEAN at its inception in 1967. While the merits of this decision
may be debated by us now as we struggle to become a dialogue partner,
at the time the Cabinet was apprehensive about joining ASEAN as it would
draw Sri Lanka into taking sides in the big power rivalry playing out in the
region. In 1985, Sri Lanka became a founding member of SAARC, which in
itself was a decision mooted in the background of many geopolitical
considerations.

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 Foreign Policy of Sri Lanka

• The period between 1976 and 2009 was a challenging one for Sri Lanka’s
foreign policy.
– Opening up of the Sri Lankan economy by President J.R. Jayawardene in 1977
– Separatist conflict, of which the foreign policy ramifications were myriad.

As for the relationship with India, that certain elements in India had trained
and armed the LTTE, the Indo-Lanka Accord signed in 1987 and the order by
President Ranasinghe Premadasa for the withdrawal of the IPKF. The tragic
assassination of Indian PM Rajiv Gandhi at the hands of the LTTE in 1991
resulted in Indian policy on Sri Lanka coming a full circle

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 Foreign Policy of Sri Lanka

• Tamil diaspora as a formidable pressure group in our international relations.

• The conduct and outcome of the talks were also largely dependent on the support
the LTTE had from international quarters. Minister Kadirgamar was also
instrumental in efforts to develop an international legal regime to tackle the
problem of International terrorism and in drawing global attention to child
soldiers.

• Countering the international propaganda campaign of the LTTE was also a new
aspect that Sri Lanka’s foreign policy had to grapple with, which was long and
arduous.

• It was not until 9/11 that Western countries recognised the destruction caused by
terrorism and the dangers of allowing funding activities. But by then the LTTE had
grown in to a formidable conventional force.

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 Foreign Policy of Sri Lanka
• In 2002 a Ceasefire Agreement was signed with the LTTE via Norwegian facilitation.
• In 2005 Foreign Minister Kadirgamar was assassinated by the LTTE.
• Following the failure of a further two rounds of peace talks, a concerted effort to
defeat the LTTE was embarked upon in mid-2006. The LTTE was defeated in May
2009.
• Alleged human rights violations during the last phase of the conflict became the
international focus with several resolutions in the Human Rights Council in Geneva
on Sri Lanka since 2012.
• Since 2015, relations with Western countries, which were previously estranged has
been restored, and there have been a number of committed steps taken by the
Government towards reconciliation, ensuring good governance and the
furtherance of human rights.

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 Foreign Policy of Sri Lanka

• Sri Lanka is committed to engage with all nations and to seek to achieve the best
interests of all concerned.
• While national security will remain a fundamental component of SL foreign policy,
as with any other post-conflict situation which takes time to recover fully, there is
nevertheless scope to aggressively pursue Economic Diplomacy and Public
Diplomacy with a view to ensuring Sri Lanka’s products and services are better
marketed and international image is re-cast.

• The Indian Ocean Conference held in October 2018, brought together the key
players in the region that use the Indian Ocean, for robust discussions and a
Ministerial Conference is to follow.
• After 22 years, Sri Lanka as President of the Conference on Disarmament in Geneva
was able to bring about a consensus and unanimously adopt Decision CD/2119
setting up 5 subsidiary bodies to commence substantive work.

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 Foreign Policy of Sri Lanka - Sri Lanka in Asia
 
“Indo-Pakistani rivalry is often cited as a reason why SAARC has weakened, but it may
also be viewed as an opportunity to come together ”

• Sri Lanka is centrally located in Asia and has always had wide-ranging diplomatic
relations. Its actions have an influence in South Asia, however small.
• South Asian values and the necessity for cooperation that led to SAARC.
•
• Sri Lanka is confident about the strength and potential of SAARC. The cancellation
of the recent conference is a disappointment, but it also reinforces the point that
SAARC members have to work together and support one another to be regionally
relevant and strong.
•
• Indo-Pakistani rivalry is often cited as a reason why SAARC has weakened, but it
may also be viewed as an opportunity to come together, and to resolve rather than
destroy.

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 Foreign Policy of Sri Lanka

• Sri Lanka’s partnerships, in terms of both debt and development

strategies, are relevant here. Sri Lanka’s relationship with China is very
strong, the links ranging from Buddhist association, people-to-people ties
and aid assistance

Sports diplomacy is an undervalued and underutilized strategy, as the

foundations for strong relationships may be laid in sports exchanges.

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 Foreign Policy of Sri Lanka
Sri Lanka’s Multilateral Diplomacy

“Sri Lanka’s contribution to multilateral institutions is also demonstrated through the

volume of its citizens in high calibre professions who have served among various UN
principal institutions”
Recent global political current trends towards isolationism and populism
• The accountability of States towards its own citizens and towards other nations remain the
fundamental objective of multilateral institutions, especially its primary incarnation - the
United Nations.
• Sri Lanka from its inception has viewed multilateralism as a key instrumental precept in its
foreign policy framework
• For smaller States like Sri Lanka, multilateral cooperation is invaluable in its ability to amplify
their voice on issues arising out of systemic power imbalances, geo-strategic power
competition, and other traditional and non-traditional security threats
• multilateralism remains the best and perhaps the only way particularly for smaller States like
Sri Lanka to convert these asymmetries into productive complementarities.

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 Foreign Policy of Sri Lanka
The Indian Ocean Region and Sri Lanka’s Foreign Policy
“The Indian Ocean is a shared resource which can benefit all regional
economies including Sri Lanka”
• At present Oceans are under threat from over exploitation, pollution,
declining bio-diversity and climate change.
• The output of the global ocean economy is estimated at EUR 1.3 trillion
and this could more than double by 2030.
• Safe, Secure, Clean and Sustainably Managed Oceans are fundamental for
the survival of the planet. This is where foreign policy making and Blue
Economy converge: evolving policies that protects and preserves the
oceans whilst allowing states to use the resources for economic benefit

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 Foreign Policy of Sri Lanka

• Sri Lanka held a conference in October 2018 titled “The Indian Ocean: Defining
Our Future” at Temple Trees.
• It explored four particular areas including the Indian Ocean’s future as the new
global growth pole, safety and security at sea, sustainable and low-pollution
development, and stability of the Indian Ocean within a rules-based approach.

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 Foreign Policy of Sri Lanka

Emerging Sri Lanka’s Challenges and Opportunities as a Hub in the Region

 
“Sri Lanka’s ambition to become a regional hub can be furthered by PPP infrastructure projects, improved logistics,
and tourism, among other activities”
• The challenges that Sri Lanka faces are complex and require complicated and often cumbersome approaches
that do not always make business sense or align with business interests.

• Challenges include asset ownership, fundraising and fund allocation, risk allocation, and regulations (or rather
lack of them). A further complication is the rapid pace at which the government is expected to show results.
• The primary concern of all tourists is safety and security. Sri Lanka aims to become the number one country for
independent female travel, and one of the means of achieving this is by building the capacity of a tourist police
unit.

• Other challenges include connectivity, seamless touch points with locals, particularly during services, and the
attraction and retention of solid FDI in tourism. Although there is currently a strong focus on new products and
services, promotions and messaging overseas do not reflect this.

• The future prosperity of the Indian Ocean is not guaranteed. Countries in the region face three major challenges: (i) gaps in
infrastructure, particularly in ports; (ii) large differences in the level of development between counties in the region; and (iii)
an uneven architecture of regional organisations.

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 Foreign Policy of Sri Lanka
Prospects and Challenges in Sri Lanka’s Foreign Policy  
“Sri Lanka has a history of leadership in foreign policy, grounded in the principle of
non-alignment”

In the current post-conflict context, three objectives are evident in Sri Lanka’s foreign
policy. These are: (i) promoting economic growth, (ii) ensuring national security and
supporting regional stability; and (iii) engaging external support for domestic stability
in Sri Lanka.
• A key prospect for achieving Sri Lanka’s economic objective, and related targets, is
harnessing the economic potential of the Indian Ocean. The 28 economies of the
Indian Ocean region are expected to grow at about 6% a year in the next few years,
compared to only 3.7% for overall world economy
• Sri Lanka should focus its bilateral and multilateral initiatives on tapping the
prospects of being an Indian Ocean and subcontinental economy

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 Foreign Policy of Sri Lanka

• A major economic challenge is managing the national debt, which is currently

around 78% of Sri Lanka’s GDP
Other Prospects and Challenges: National Security and Regional Stability
• A key challenge to Sri Lanka’s security and to regional stability is the rising
geopolitical tension in the Indian Ocean region among global and regional powers

Other Prospects and Challenges: Domestic Stability

• Sri Lanka’s foreign policy aims to engage external support for Sri Lanka’s post-
conflict domestic stability and peacebuilding

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 Foreign Policy of Sri Lanka
Economic Diplomacy

“While Sri Lanka faces many internal and external challenges, continuing with economic
reforms alongside emphasis on economic diplomacy will yield improved prosperity in the
medium term”
• Sri Lanka’s economic reforms, initiated in 1977, laid the foundations for decades of
export-led growth and private sector development in Sri Lanka. In a break with the past
inward oriented strategies, the country opened up to trade and foreign investment

• Some recent measures to foster post-conflict economic development in Sri Lanka

include: improving macroeconomic management using inflation targeting and
improving tax collection, streamlining import tariffs, reducing the red tape affecting
businesses, regaining the GSP+ trade concession from the European Union, and
concluding the Sri Lanka-Singapore FTA. These measures are beginning to show results
in terms of an improved business climate and better macroeconomic management.

65
 Foreign Policy of Sri Lanka

• An important geo-political challenge is how to maintain a non-aligned foreign

policy amidst competition for regional maritime supremacy among major powers
and tussles over infrastructure projects.

• While Sri Lanka faces many internal and external challenges, continuing with
economic reforms alongside emphasis on economic diplomacy will yield improved
prosperity in the medium term.

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 Foreign Policy of Sri Lanka
Economic Strategy of Sri Lanka
“Boosting FDI is a priority, with investors noting that Sri Lanka is advantageous because of its
strategic geographic location”
• Sri Lanka has recently undertaken some key initiatives to boost its trade performance,
including- o Formulation of the National Export Strategy 2018-2022, which aims to boost six
priority sectors and four trade support functions;
– Promotion of the Innovation and Entrepreneurship Strategy to support small and
medium-sized enterprises (SMEs);
– Introduction of policies to support innovation, develop a ‘start-up ecosystem’, and
reorient research and development towards enterprise needs;
– Promotion of FTAs as a means of boosting trade and investment; and
– Introduction of trade facilitation measures and other reforms to improve the ease of
doing business.

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 Foreign Policy of Sri Lanka
Prospects and Challenges in Sri Lanka’s Economic Policy
 
“Sri Lanka’s avowed goal to become an advance economy by 2025 can only be achieved through
greater engagement with international trade. This requires improved access to other markets
through new trade agreements and linking Sri Lanka to global production networks to increase the
complexity of its exports”

• The most pressing threat to the health of the global economy is the escalating trade disputes
between the US and its most important trade partners. The IMF is also taking a fresh look at
the outlook for the world economy. While the US is growing strongly, there are increasing
signs that economic momentum is slowing in the Eurozone and Japan.

• Emerging economies in Asia and Africa are not immune to the effects of the growing trade
disputes as their exports are likely to be affected too. These economies are also vulnerable to a
tightening of global financial conditions as the US dollar strengthens and its monetary policy
is tightened. Indeed, a number of currencies, including the Sri Lankan Rupee, have recently
come under pressure.

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 Foreign Policy of Sri Lanka
Emerging Sri Lanka
Sri Lanka’s Economic Vision

“While global risks are affecting Sri Lanka’s debt dynamics, the current economic
situation can be carefully managed”

• Sri Lanka’s Vision 2025 called for a knowledge-based, competitive social market economy. It
reiterated that Sri Lanka’s growth model must be anchored on export transformation and
improved education.

• In future, Sri Lanka should avoid taking on loans for non-valued projects and, instead,
evaluate projects in light of their contribution to domestic development. Mobilising capital
effectively will help address macroeconomic stress on the economy, which will improve the
trajectory of development

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 Foreign Policy of Sri Lanka
Western Regional Megapolis Project and Colombo Tech City
“Colombo and other strategic cities have been marked for sustainable urban
development policies”

Colombo Port

Moragahakanda
Hydropower Project

Futuristic Projection of
Colombo Port City

Futuristic Projection of
Biotechnology Park
Homagama
70
Image Credits:Presidential Media Unit & Google Images
 Foreign Policy of Sri Lanka
Colombo International Financial Centre
(Port City) Project

71
 Foreign Policy of Sri Lanka

Ports Development: Hambantota, Trincomalee and Colombo Harbour Development

and Expansion

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 Foreign Policy of Sri Lanka

Sustainable Sri Lanka 2030 Vision, Strategic Path, and SDGs

“The main sustainable development challenge for Sri Lanka has been the widening
inequality between the rich and the poor”

• Sustainable development requires balanced and integrated analysis in three major

spheres: social, economic and environmental.
• The economic domain is geared towards improving human welfare, primarily
through increased consumption of goods and services.
• The environmental domain focuses on protecting the integrity and resilience of
ecological systems.
• The social domain emphasises the enrichment of human relationships and the
achievement of individual and group aspirations.

Interactions among domains are important

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 Foreign Policy of Sri Lanka

Sustainable Sri Lanka 2030 Vision, Strategic Path, and Sustainable Development Goals

• It must transcend the boundaries of sustainable development with innovation that

may address economics, social science and ecology, and many other disciplines.

• The value system has to be reengineered. Wrong social values drive unsustainable
development, or modern economic maldevelopment..

• It is imperative that building assets for sustainable development through full

lifecycle application of integrative tools, from data gathering to practical policy
implementation.

• The economy and the environment must be brought together as one strategy to
limit social and environmental harm stemming from recent growth.

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 Sustainable Development:

-
 The Sustainable Development Goals (SDGs) and targets succeed the Millennium
Development Goals (MDGs).

 The 17 new SDGs focus on achieving sustainable development in three dimensions –

economic, social and environmental – in a balanced and integrated manner. 169 associated
targets.

 Member States have committed for its full implementation of SDGs by 2030.

 Sri Lanka is the first country in Asia Pacific Region to establish a Cabinet Ministry of
Sustainable Development.

 The National Sustainable Development Bill has been gazetted by the Government.

 An apex Sustainable Development Council has been established to facilitate achieving national
regional and international commitment on Sustainable Development.
 

75
 SDG Goals
 Goal 1. End Poverty
Goal 2. End Hunger, Food Security, improved Nutrition and promote
Sustainable Agriculture.
 Goal 3. - Health and well being
 Goal 4. Equitable quality education and life long learning opportunities.
 Goal 5. Achieve Gender Equality
 Goal 6. Clean Water & Sanitation
Goal 7. Ensure Access to Affordable, reliable, sustainable and modern
energy for all.
Goal 8. Promote Sustainable Economy Growth and Productive
Employment Decent Work.

76
 SDG Goals
Goal 9. Build Resilient Infrastructure promote sustainable
industrialization & Foster Innovation.
 Goal 11. Make cities and human settlement safe resilient and sustainable.
 Goal 12. Ensure sustainable consumption and production pattern
 Goal 13. Urgent action to combat climate change and its impact.
 Goal 14. Conserve Oceans Seas and Marine Resources for Sustainable
Development.
Goal 15. Protect restore and promote sustainable terrestrial eco system
combat desertification and halt and reverse land degradation and halt
biodiversity loss.
Goal 16. Promote peaceful and sustainable development, access to
justice and build effective, accountability and inclusive institution.
 Goal 17. Partnership for the Goals

77
 Emerging Issues in the Indian Ocean

Traditional Security & Great Power Interests in the Indian Ocean

Non-Traditional Threats in the Indian Ocean: We are all like islands in the sea 

Commercial Context and Dispute Resolution in the Indian Ocean

 Leading Powers in the World and their interest in IOR

78
 Indian Ocean Issues

a) Freedom of Navigation with specific reference to issues related

to passage;
b)Foreign Military activities in Exclusive Economic Zones (EEZs);
c) Activities of Warships, Drones, and Submarines in the Indian
Ocean Region
d)Biodiversity Beyond National Jurisdiction (BBNJ);
e)Marine Protected Areas.
f) Exploration and exploitation of marine resources in the high
seas and collective responsibility to preserve the global commons;

79
 Indian Ocean Issues

g) Combating Maritime Terrorism in the high seas through cooperation;

h) Countering Human trafficking in the high seas;
i) Dealing with refugee crisis in high seas;
j) Protecting Submarine cables;
k) Operation of Nuclear based sea platforms and transportation of radioactive material.

80
Sri Lanka in ‘One belt One Road’ : Challenges and Way Forward

81
 ‘One Belt One Road’
The endurance of the global capitalist economic system has been challenged by
asymmetrical global development, slowly recovering world economy, the arguable role of
multilateral financial organizations, European refugee crisis, and Brexit.

Emerging new economies like China, India, South Africa, Brazil, and Russia have to
compete extraordinarily to explore new ways in order to protect their economic development and
national survival as they are driving their national economies on an uncertain global capitalist
economic system.

New economies are striving to add new qualities and values to the existing economic
system though it is unfeasible to change the existing system entirely.

‘One Belt One Road’ is an outcome of this significant attempt invented and initiated by
China in 2013.

82
 Expectations
 OBOR or ‘Silk Route Economic Belt and 21st Century Maritime Silk Route’ aims to
promote the connectivity of Asian, European, and African continents and their adjacent seas.

 Aims in practicing the thousand year-old Silk Route Spirit (values) of peace and
cooperation, openness, inclusiveness, mutual learning and mutual benefit.

 Aims to develop the values to make global economic development and world peace
interdependent.

 Principles of Peaceful Co-existence and systematic initiative to fulfill the

intergovernmental policy coordination by coordinating national development strategies
along the Belt and Road:
o facilitating connectivity through infrastructure development
o expanding unimpeded trade by removing red tape on investment and trade barriers
o developing financial integration through new banks like Asian Infrastructure Investment Bank (AIIB)
o enhancing people-to-people relations through cultural and academic exchanges

83
 Sri Lanka’s partnership

 Sri Lanka has the potential of connecting the three global regions of Africa,
South Asia and Southeast Asia which cover immense global territory and population.

 Need infrastructure development in terms of roads and transport, power and

energy, ports, airport and aviation

 Sophisticated infrastructure could facilitate connectivity through the flow of

capital and services.

 Need connectivity to tap mutual benefits by developing infrastructure of Sri

Lanka ( Ports and Airports, Internal highways, Power plants etc.)

 Expected to facilitating Sri Lanka’s sea and air connectivity, international trade
and investments.

84
 Sri Lanka’s partnership

Colombo International Financial City - Sri Lanka-China bilateral attempts in

developing Sri Lanka .

Apart from China, neighboring countries such as India, Malaysia, and Singapore
are expected to invest. Project has delayed due to many reasons.

It is certain that Sri Lanka will have a growing partnership with BRI in future.

Concern is how to sustain the relations by identifying the challenges ahead.

Will depend on Sri Lanka-China bilateral relations and the challenges in strategic
policy planning by Sri Lanka.

85
Challenges of Sri Lanka-China and Sri Lanka-China based OBOR relations

Growing overland connectivity

China’s energy security highlights the importance of Sri Lanka’s location
in the Indian Ocean. ( 2/3 of China’s oil requirements are fulfilled by the
Indian Ocean. China heavily depends on Sri Lanka’s ports for bunkering and
refueling purposes since the country lies just a few nautical miles away from
the super-busy east-west shipping route).

86
Geopolitics of India

87
 “Foreign policy cannot be conducted by having a confrontational
approach neighbours or any other country for that matter. However
supremacy of national interest has to be one of the basic planks.”
PM Narendra Modi - Apr 2014

88
 Geopolitics of India

Power politics of India in the Indian Ocean Region have resulted in the appearance of new
challenges for Sri Lanka-China bilateral relations.

India is practicing new approaches in power politics in the IOR, owing to China’s new
presence in the region.

China’s presence in the IOR is evident in the construction of port facilities in littoral states
of the IOR, Hambantota-Sri Lanka, Gwadar-Pakistan, Chittagong-Bangladesh and Kyaukpyu-
Myanmar by supplying loans, materials, technical assistance and Chinese laborers.

Energy security and economic development are key objectives of China’s new presence in
the IOR particularly in Sri Lanka.

Although China is constructing ports by covering major oil shipping routes, it has naturally
covered India since these ports are located in neighboring countries like Pakistan, Bangladesh,
Myanmar and Sri Lanka.

India is concerned that China will build naval bases in the ports in order to weaken their
economic and military sea power.

89
Sri Lanka Foreign Policy - Issues

Geopolitical Issues
Economic Issues
Legal Issues

90
 Geopolitical Issues

The evolving strategic context in the Indian Ocean, particularly against the backdrop
of growing Sino-Indian strategic competition

China’s strategic goals in the Indian Ocean- Secure the sea lanes of communication that are vital
for its;
 trade and energy supply
 to invest excess economic capacity via projects of the Belt and Road Initiative (BRI)
 to protect its nationals working on those projects.

India is looking to effectively maintain a leadership position in the Indian Ocean region
and therefore is apprehensive about Chinese cultivation of influence over regional economies via
investments in the BRI.

Rising non-traditional security threats in the region, including piracy, human smuggling,
Illegal, Unreported and Unregulated (IUU) fishing, and climate change.

 Sri Lanka’s vulnerability to non-traditional threats such as human smuggling and IUU fishing

91
 Key policy suggestions

A broader underlying policy of actively supporting a rules-based

international order would be helpful in this regard. utility of Sri Lanka’s
adherence to non-alignment in its current strategic context.

Is non-alignment remained a policy imperative; a broad ideological

spectrum that allowed for movement within the spectrum rather than leaving it
outright?

Is non-alignment appeared to have outlived its Cold War-era utility and
providing only a veneer of neutrality that masks underlying alliances in
practice – including increasingly important economic networks?

92
 Key policy suggestions

Sri Lanka should continue to engage constructively with the US.

„Sri Lanka should invest in resources to develop a deep understanding of the
internal drivers and implications of Indian and Chinese foreign policy and strategic
initiatives.

Sri Lanka could balance between China and India by advocating for a rules-
based international order and working within regional blocs, especially economic
blocs.

Sri Lanka should cultivate pro-Lankan constituencies in India using culture-

based soft power (such as religious heritage links).
„
Sri Lanka should carefully evaluate the costs and benefits of Foreign Direct
Investment (FDI) and strategic partnerships in politically sensitive areas such as
Trincomalee.

93
 Key policy suggestions
Sri Lanka, along with other regional states, should invest more in coastguards to
address non-traditional security threats.

Develop national center for analyzing and providing responses to maritime

security threats ( SL Navy can take the leading role )

 Establish Regional Maritime Information Fusion Centre for information sharing.

Continue to adhere to non-alignment, and perhaps exploit the crisis of

leadership in the Non-Aligned Movement (NAM) to band together with moderate
states within NAM in taking the movement forward in a more principled manner
consistent with NAM’s historical values.

Sri Lanka could build its soft power and brand as a middle income economy
by establishing a small foreign aid programme.

94
 Economic Issues
Sri Lanka is a small open economy- Implications of an unfavourable external economic
environment?
Asia’s trade has slowed in relation to GDP since the crisis in 2008, and FDI inflows to
the region have fallen.

There is uncertainty in international policy and a growing risk of

protectionism. The Trump administration is adopting an ‘America First’ approach, which
led to the US withdrawal from the Trans-Pacific Partnership (TPP) Agreement and
re-negotiation of the North American Free Trade Agreement (NAFTA).
The Doha Round of the World Trade Organization (WTO) appears to have collapsed, and
there is still little discussion on reviving the negotiations or embarking on a new multilateral trade
round.

 The Brexit discussions and the future direction of EU and UK trade policy.

Development of technologically sophisticated global value chains (GVCs) in East Asia,

the migration of some of China’s labour-intensive GVC stages to Asian countries, a
greater role for SMEs in Asia’s GVCs, and the expansion of service exports across Asia.

Some Asian countries are intent on pursuing various regional

cooperation initiatives and are keen to keep markets open.
95
 Economic Issues
ASEAN and major regional economies are actively negotiating Asia’s
mega-regional trade agreement – the Regional Comprehensive Economic
Partnership – and pursing bilateral free trade agreements (FTAs).

China has also developed the Belt and Road Initiative (BRI) from Asia
to Europe, and established the Asian Infrastructure Investment Bank (AIIB)
tofoster greater regional infrastructure development.

The country has a geographical advantage to become an economic hub

between Dubai and Singapore, a role that few others currently seek, and to be
a gateway to the Indian subcontinent.

96
 Economic Issues

It was the first economy in South Asia to adopt economic

reforms when it switched to an outward-oriented strategy, in
1977.

Sri Lanka has attracted FDI and witnessed the growth of

exports of tea, textiles, and tourism.

Actively pursuing bilateral FTAs with China, Singapore,

and India to reduce barriers to trade and FDI.

97
 Economic Issues


Sri Lanka is facing several pressing challenges in the post-crisis era. FDI flows lag trade
flows, and neither is diversified in terms of products and markets.

The US and EU continue to dominate the country’s tea and textiles trade.

There is a risk that the country’s limited trade policy capacity is over-burdened by the
simultaneous pursuit of multiple FTA negotiations.

As a lower middle-income economy, Sri Lanka is likely to receive less concessionary aid
and be more reliant on more expensive finance from international
capital markets and international agencies.

Bilateral non-traditional donors with various commercial interests are rising in

importance in the context of dwindling aid flows to Sri Lanka, and non-resident Sri
Lankans are expressing interest in contributing to Sri Lanka’s economic development.

98
 Policy suggestions for Economic Development

It attempt to diversify its sources of FDI towards regional economies, particularly
investors from the South Indian states and from provinces in China.
„
It should adopt a more proactive approach to FDI and strategic investors using
modern promotion tools, incentives,and public-private sector partnerships.

 Sri Lanka’s foreign service, like its counterparts in other foreign ministries, can
usefully support the Board of Investment to promote inward FDI, including by
liaising with multinational companies in their host countries and potential local
joint-venture partners.

An initiative for economic engagement with non-resident Sri Lankans could
bring capital and skills into key sectors and professions.

99
 Policy suggestions for Economic Development
„
 As Sri Lanka will increasingly deal with more advanced economies in East Asia, it
should enter bilateral investment treaties (BITs) with a selective and differentiated approach.

The country’s FTA strategy should prioritize the conclusion of agreements with a few key
Asian economies.

Its FTA negotiating capacity must be strengthened, if necessary by using external

expertise, including the expertise
of non-resident Sri Lankans.

It should examine how it can take advantage of key Asia-wide strategic initiatives (such
as the BRI, RCEP, and possibly the TPP) and existing WTO agreements (like the Trade
Facilitation Agreement and the InformationTechnology Agreement).

100
 Policy suggestions for Economic Development

It should firmly uphold principles of competition, transparency, and aid

effectiveness in transactions with non-traditional bilateral donors.

 „Sri Lanka should pursue deep structural reforms to improve the business environment
for the private sector, including reducing import tariffs, streamlining business procedures,
investing in physical and internet infrastructure, improving access to finance for SMEs, and
raising labour productivity.

 A whole-of-government approach is needed for geoeconomic diplomacy, with

coordination among various ministries, departments, and other government agencies.

 Establishment of a unit to promote inter-agency cooperation between the defense and

foreign policy establishments.

101
 Legal Issues

The legal context of Sri Lanka’s political and economic diplomacy was a recurring theme
of the discussions.

Sri Lanka’s potential to use both international and domestic law to maximise the country’s
development and global opportunities, while also noting current challenges to this task, which
include a lack of human and other resources and momentum for legal reforms.

Sri Lanka’s distinguished history in international law. Well-known diplomats, judges, and
academics from Sri Lanka have made significant contributions to international law in organs of the
United Nations (UN) and in other influential organisations.

 Three Sri Lankans – including Christopher Weeramantry, Antony Anghie, and Radhika
Coomaraswamy – are among the select few of around 20 global thinkers who have delivered the
Grotius Lecture of the American Society of International Law. Sri Lanka’s historical reputation in
international law can be viewed as a source of its soft power.

102
 Legal Issues

 Domestic legal system to harness international opportunities?

 Sri Lanka’s domestic legal system lags behind other jurisdictions in Asia in
efficiency and transparency and therefore, in its ability to attract foreign investment.

 A major challenge is that Sri Lanka lacks the capacity to track and leverage the
increasingly complex network of international laws in both economic and non-
economic spheres; for example, in the sphere of intellectual property.

This is essential to maximising the potential value of such obligations to Sri Lanka,
as well as to minimising their risks. international), despite the recommendations of the
Consultation Task Force on Reconciliation Mechanisms that was appointed by the
government.

103
 Policy Suggestions for Legal
 „The government should work to maximise the benefits of international laws and harness Sri Lanka’s historical
reputation as a leader in this field, rather than acting passively, or even defensively, in response to international
laws.

 Sri Lanka should therefore identify and devote additional resources (e.g. from overseas Sri Lankans) towards
understanding the details and nuances of Sri Lanka’s network of international obligations, as well as obligations it
may assume in future.

 To encourage foreign investment, there is an urgent need to significantly increase the efficiency of the judicial
system. For example, the average time to enforce a contract in Sri Lanka’s courts is much longer than in competitor
economies like Singapore.

 Sri Lanka should build on recent, welcome changes to dual citizenship laws by further reforming its immigration
laws to facilitate the economic contributions of overseas Sri Lankans.

India’s experience of instituting legal arrangements for their diaspora to live and work in India may be
instructive.
„

104
 Foreign Policy  - 2025 Vision
Vision 2025 is a high level strategy document which was published by the
Government of Sri Lanka which sets out its’ economic vision of making Sri Lanka a
prosperous and developed country by year 2025.

The vision is outward looking, with development initiatives focused on

transforming Sri Lanka into hub of the Indian Ocean region with an export oriented
market.
Domestic market is 20 million and need to look beyond its’ borders for sustained
growth.
 Key issues and constraints to economic growth;
 Due to protectionism
 Focused only on low technology products and services which add limited value
 The regulatory barriers which constrain both foreign and local investment
The rigid border taxation which hinders foreign trade and the lack of access to
finance for industry.

105
 Economic delivery programs

Include Following:
 Raise per capita income
 Create new jobs.
 Increase FDI
 Increase exports
The new approach to growth proposed by the GoSL is underpinned by the focus
on making Sri Lanka a “social market economy” model.

106
 Economic delivery programs

Include Following:
Partner with the Private Sector to make the economy more competitive in the
global arena.
A strong middle class has been identified as imperative for this matter and there
is substantial legal reforms which are identified, notable among which for a business
are – Inland Revenue Act, Foreign Exchange Act, Ports and Airports Act, Lands Act
and the Sustainable Development Act.
The Macroeconomic Framework of Sri Lanka is to be strengthened, focusing on
three main areas fiscal consolidation, price stability and a market based exchange rate

107
 Foreign Policy  - 2025 Vision

The Private sector has been identified for growth focused investment.
The GoSL aims to incentivize domestic and foreign investment, revamp trade
policy and develop an export led economy and facilitate service driven
expansion.

Land, Labour and Capital Market reforms are recognized as imperative

to facilitate growth.

The GoSL recognizes that social factors such as education and skill
development plays an integral role in the development of a social market
economy. Thus, the GoSL is focusing on inclusive growth from major
infrastructure development, technological optimization and digitalization.

108
 Foreign Policy  - 2025 Vision
Improving technology and digitalization which has lagged behind significantly compared to peer countries.
This is a significant opportunity for businesses in high technology industries to come into Sri Lanka as the GoSL
is compiling a plan of action to encourage transfer of appropriate technology into Sri Lanka.

Social safety nets to protect the most vulnerable populations in Sri Lanka is also a focal point of the
document.

 Agriculture and sustainable development . Present inefficient may prone to food insecurity.

 Agriculture Sector Modernization Project and a plantation sector modernization project.

New Inland Revenue Act provides for significantly enhanced capital allowances for investments in the
Northern Province, to provide incentives for development in those districts.

 Ensure the rights of all citizens and to uphold and strengthen the citizen’s right to information.

The strengthening of Coordination, Monitoring and Implementation

oFocused on implementing a consistent and predictable economic policy framework as well as a framework for monitoring
and evaluation of the country’s development strategies. 

109
 Challenges to Sri lanka Foreign Policy

Sri Lanka’s Relations with China and India

Geo-Economics and Sri Lankan Foreign Policy 
Commercial Diplomacy in Sri Lanka: Exploring Some Issues
Sri Lanka’s Maritime Security
Reconciliation Accountability and International Human Rights
International Civil Society
Role of Private Sector
Media -Social Media
Diaspora
 

110
 Prescription for Stronger Foreign Policy Approach

 Strong Policy Framework

 Wider Consultation

 Stronger foundation on Rule of Law and decision making

 Professional Approach

111
Thank You

112