Sri Lanka: Focus on economic development and foreign relations

Sri Lanka: Focus on economic development and foreign relations– Update No. 197

By Col. R. Hariharan

Sri Lanka President Mahinda Rajapaksa has sworn in a new set of 76 ministers – 37 of cabinet rank and 39 deputy ministers – as against the jumbo ministry of 106 ministers in the earlier government. A few more ministerial appointments are likely in President’s bid to stitch a patchwork quilt to meet the interest of sundry coalition partners.

With 144-memeber strength in the house of 225, the President has gone about his government formation from a position of power.

The changes indicate the President’s current priorities – economic development and foreign policy as against the only earlier earlier – winning the war and eliminating the Liberation Tigers of Tamil Eelam (LTTE). And the two priorities are inextricably interwoven particularly after the unhappy consequences of international allegations of aberrations of governance that has eroded Sri Lanka’s good will.

Evidently, the President is fully conscious that economic development is imperative to put the country back on rail after it was drained of its resources and energies both during the uncertain peace impasse and the wasteful war during the last three years. There is a huge backlog of paying for the war – the public debt incurred for the war, reconstruction of infrastructure damaged due to the war and investments to kick start normal life in Northern Province.

There is also secondary fall out of war – inflationary economy, unemploy-ment due to dislocation in hospitality and tourism services, and the negative impact of withdrawal of GSP+ tariff concessions on exports to the European Union countries. Tertiary fall out includes conforming to conditionality of international creditors which insist on lean government and curbs on non budgetary expenditure.

So it is not surprising the President chose his brother Basil Rajapakse as the minister for economic development. He served as the President’s wartime organisational hatchet man and key member of the troika that structured the victory over the LTTE. This is going to be a key ministry as it will be involved in planning and apportioning large resources to various projects. Translated in simple political terms the ministry will wield a lot of power. Evidently, the President is again putting his trust in his brother to show visible results in the economic front just as he had done in support of operations during the war.

The Rajapaksa family hold has been further firmed in with the swearing in of President’s elder brother Chamal Rajapaksa as the speaker. Earlier he was in a less visible appointment as minister for ports. With the President’s eldest son Namal Rajapaksa also becoming a member of the House, the third generation of the family has now been anointed into corridors of power.

Foreign ministry was Sri Lanka’s weakest link in the crucial period of war. Sri Lankan diplomacy, or lack of it, cost the country dearly. When it entered the peace process in 2002 it commanded wide respect and managed to muster support of nearly 50 nations and international organisations that were ready to underwrite the financial burden of bringing peace.

However, during the war Rohitha Bogollogama as the foreign minister could not prevent the erosion of goodwill and weather international criticism that had snowballed against Sri Lanka on issues of governance and human rights. This has hamstrung Sri Lanka’s foreign policy in a number of ways. Thus the newly appointed external affairs minister (as the foreign minister has now been rechristened) Professor GL Peiris will be starting his new job with the burden of the backlog of his predecessor.

The suave and articulate professor with impeccable academic credentials brings in the much needed intellectual input lacking earlier in the foreign ministry. As minister for international trade in the earlier government, Peiris had a good equation with India, although the Comprehensive Economic Partnership Agreement (CEPA) he had tried to promote between the two countries never came through due to internal opposition. Similarly his efforts to stave off the EU’s decision to withdraw GSP+ trade concessions, though creditable, could not achieve positive results.

Given this background, his role as external affairs minister is going to be tricky. There a few external issues he would be facing. He has to work out a face saving method to get out of the mess that has been created in handling the human rights issues with the West and UN agencies. Secondly, if he can succeed in the first task, his second task will be of harmonising external affairs and international trade policies to Sri Lanka’s advantage. This would aim at restoring the economic and trade support links with the West. However, this is going to be a tough job in the prevailing climate of paranoia and suspicion of the West.

The affable Professor Peiris’ ability to steer the country away from present course and initiate a course correction to foreign policy is going to be critical for Sri Lanka’s foreign relations. Professor Peiris would need President’s policy directions in this regard; whether he can persuade the President to do so is the moot point. Unless such an initiative is taken, mere change in language and rhetoric may not help to smoothen the ruffled feathers of some the influential friends of Sri Lanka. The country needs their financial assistance and vast markets to get the economy in order.

The President assisted by his two brothers had handled Sri Lanka-India relations during the earlier government. And the war against the LTTE became central to the relations and the core issue of devolution of powers to Tamils was put in cold storage. India went along with the President’s scheme of things as it removed the LTTE as its militant methods were blocking the evolution of a peaceful resolution of the ethnic issue.

However, with the LTTE no more, India is expected to raise the devolution issue once again. As the 2011 Tamil Nadu assembly election nears, New Delhi will have no choice but to demand action rather than mere rhetoric. Geography has destined India and Sri Lanka into a closely knit strategic environment. The increasing Chinese foot print and influence in Sri Lanka is undoubtedly a matter of concern for India. So both the countries have no other option but to address these concerns. With economic development becoming a core issue for Sri Lanka, Indian help and economic assistance is essential now more than ever before.

So Sri Lanka will have to find a winning equation in handling these three inter-related issues with India. So even if the President continues to handle relations with India, he would need the hands on involvement of both Basil and Peiris in giving form to it. Will be Peiris be allowed to play an increasing role as external affairs minister in handling India? We will have to wait and see as the relations between the two countries move into domains that had never been fully explored before.

(Col R Hariharan, a retired Military Intelligence specialist on South Asia, served with the Indian Peace Keeping Force in Sri Lanka as Head of Intelligence. He is associated with the Chennai Centre for China Studies and the South Asia Analysis Group. E-Mail: colhari@yahoo.com Blog: www.colhariharan.org)