Sri Lanka and New Economic World Order

CSUNDAY, MAY 21, 2017

hina hosting a mega event this week not only announced that it has arrived on the world scene as a major economic power-house, but telegraphed its vision for the next 30 years and more. With the US now on reverse gear advocating nationalism and protectionism, China has become the new face of internationalism. How the roles have reversed.

In an article on Page 8 (ST 2), a Sri Lankan-born UN diplomat lucidly explains China’s ambitious US$ 124 billion plans aimed at linking Asia with Europe and Africa, by road, rail and sea. The ‘One Road; One Belt’ initiative was attended by leaders of 29 countries, including Sri Lanka’s Prime Minister, 1,500 delegates from 130 nations, NGOs, the IMF, World Bank and the UN Secretary General.

To calm any unease that this was the Chinese dragon romping through the world stage, China’s President said; “We will not interfere in other countries’ internal affairs. We will not export our system of society and development model, and even more, will not impose our views on others”.

India was not impressed. For one, the road link cuts across disputed Kashmir. India boycotted the forum while the US and several European nations sent low-level representation, clearly smarting that they are being slowly, but surely upstaged by China.

The world is witnessing the re-emergence of two former Communist giants of the past -- Russia and China which split on dialectic Marxism only to re-emerge as economic superpowers through free market policies they once derided as “Capitalist pigs”.

For the new Chinese initiative to be altruistic, is too good to be true. Those dealing with the Chinese negotiators on the Port City project and the Hambantota harbour know only too well how they drive a hard bargain and exploit the weaknesses of corrupt local politicians in developing countries when doing business.

Parallel to the ‘One Road; One Belt’ initiative, China has invested US$ 100 billion in an Investment Bank and the BRICS Development Bank to break the monopoly of the Westdominated IMF and World Bank and their grip over countries like Sri Lanka.

With the anticipated inflow of funds not forthcoming from the West despite a new Government more amenable to it here in Sri Lanka, it is becoming clearer that this country’s economic future rests on the broad shoulders of India and China. By accident or design, the previous Government recognised this fact, but played its cards wrong.

This Government will need to learn from past mistakes and look to the future as this ‘New Economic World Order’ unfolds.