In assessing the proposed ETCA, it is important to place any analysis within the overall context of the options for accelerated development available to a country like Sri Lanka. The need to prioritise faster growth and employment generation is reinforced by the fact that: (i) Sri Lanka has slipped from being second to Japan in Asia on most socioeconomic indicators at the time of independence to a position much further down in the ranking of countries in this region; and (ii) tens of thousands of young people have been killed in the two Southern insurrections largely due to a mismatch between opportunities and expectations. This was also an important causal factor for the separatist movement in the North and East. Given this legacy, it is imperative that the highest priority has to be given to growth and employment creation. During the last 10-years, the public service has increased by 700,000 persons. The current budget and debt dynamics mean that such a course of action can no longer be continued. Similarly, the previous external commercial borrowing financed growth model has also run out of headroom. This means that growth and employment will have to be driven by private investment. The savings and investment gap in Sri Lanka is such that FDI, as a non-debt creating inflow, will have to play a crucial role in filling this gap and generating the desired growth and employment.

By Sarah Hettiaratchi, Project Executive - Pathfinder Foundation

The Maritime Silk Road (MSR) and Economic Belt policy initiatives unveiled by President Xi Jinping in 2013 were identified as significant elements of an overall Chinese attempt to leverage China’s growing economic power and influence along its geographic boundaries. The objectives of this enormous development initiative is to strengthen and expand cooperative interactions, create an integrated web of mutually beneficial economic, social and political ties, and ultimately lower distrust and enhance a sense of common security.

Introduction:

India and Sri Lanka are strategically located at a crossroads within the Indian Ocean; a body of water 68.5 million sq. km in extent and the third largest of the world’s oceans, after the Pacific and Atlantic Oceans. Their unique location provides ample opportunities for the two South Asian neighbours to embark upon a cooperative approach in joint sea exploration. India has a vast costal line of more than 7517 km, with Sri Lanka adding its coastline of 1340 km. The prospect becomes still more impressive, if the Maldives is included in the concept of joint exploration of their combined wealth of sea resources. However, it is not quite clear if Maldives is yet ready to fully join a broad based cooperative venture in a tri-lateral format for a variety of reasons, although as elaborated in the later part of this paper, it has been part of the ongoing negotiations and discussions on certain aspects of the agenda.