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New US envoy means business

The latest US Envoy to Sri Lanka – who has been nominated by US President Joe Biden – Julie Chung has yesterday (21) stressed the importance of building constructive relationships with Sri Lanka, including with the civil society, the private sector, and Sri Lankans. According to media reports, she has further acknowledged the importance of Sri Lanka’s geographical location, calling it a strategic location in the Indian Ocean, with access to global maritime and trading lanes, which she says plays a pivotal role in a free and open Indo-Pacific architecture.

These remarks display how the US sees Sri Lanka’s importance as an independent nation and strategic location, and how it aims to strengthen the existing Sri Lanka-US relationship. The latest US Envoy to Sri Lanka having identified the huge potential Sri Lanka has, as far as trade and economy are concerned, is a good sign.  

However, that enthusiasm should be reciprocated from Sri Lanka’s end as well, and Sri Lanka should have the enthusiasm to see and grab potential opportunities.

Until recently, Sri Lanka was seen as a part of India, or as a country with a massive influence from India. Also, owing to various close relationships Sri Lanka has with India, mainly economic and cultural relationships, Sri Lanka is often viewed as a country that supports India’s economic and geopolitical policies. In that context, there was and is a need for Sri Lanka to show its capabilities, and build a name for itself as an independent State that has its own stance, regardless of what support Sri Lanka receives from India.

However, Sri Lanka will not be able to benefit from any diplomatic relationship, irrespective of how beneficial they are to the country, unless and until Sri Lanka understands that economic co-operation does not mean mere concessions, loans, and grants, even though they are extremely comforting in the short run. True economic co-operation is when we further existing relationships and use them as the basis to form new opportunities which are beneficial to all relevant parties. However, one of the most important steps towards attracting such economic opportunities is having independent and neutral policies as far as economic co-operation is concerned.

So far, the discussion on Sri Lanka’s relationship with the US was mostly limited to exports, human rights-related matters, and grants for various development projects in the country. However, there is a huge potential for Sri Lanka to go beyond conventional US-Sri Lanka talks about concessions and grants. When it comes to exports, which is more or less the main way to save Sri Lanka from the exacerbating foreign reserves scarcity, the US is Sri Lanka’s biggest export market. According to statistics issued by the Export Development Board (EDB) in 2020, Sri Lanka has exported $ 2.5 billion worth of export goods to the US. It is a significantly higher value when compared with the UK, the second biggest export destination, which accounted for $ 910 million. It is also important to note that despite the much-discussed European Union (EU) Generalised Scheme of Preferences Plus (GSP+) trade concession, Sri Lanka’s exports to EU countries, i.e. Germany and Italy, as far as Sri Lanka’s top five export markets are concerned, recorded $ 570 million and $ 457 million exports, respectively.

At a time when the country is facing a massive economic crisis, more than friendly nations, what Sri Lanka needs is nations that offer healthy economic opportunities. It is not practical to think that Sri Lanka can strengthen, develop, or maintain diplomatic relationships with the US, or any country for that matter, divorced from the existing geopolitical discourse. Of course, Sri Lanka’s strong relationships with India and China, two of the US’s traditional competitors in multiple fronts, will come into play as Sri Lanka tries to secure more opportunities with the US. That is a challenge the leaders have to overcome.