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Razeen Sally | Sri Lanka has a promising future, if we play our cards right

LiveMint logoLiveMint 06-06-2014 Preeti Dawra

Singapore: “In my mid-thirties I realized I had slipped past a childhood I had ignored and not understood.”

Razeen Sally, one of Sri Lanka’s most well known public intellectuals, quotes these wistful lines by Michael Ondaatje in his upcoming book, “Sri Lanka: A Personal Journey”. The book will provide a bird’s-eye view of the country’s critical historical, political, economic and social developments after independence.

“It will also be a travelogue that will seek to portray the variegated land and people—Colombo, the capital; the Sinhalese heartland of the south coast; Kandy, the tea country and the ancient capitals to their north; the combustible ethnic mix of the east coast; and Tamil Jaffna and the north,” he says. Sally hopes that readers globally, and especially in India, will have a better understanding and appreciation for “this beautiful country with a tumultuous history and a promising future, if we play our cards right”.

Sally, who is half Sri Lankan and half British, is currently a visiting professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore. He is also the chair of the Global Agenda Council on Competitiveness of the World Economic Forum, and has written extensively on the World Trade Organization, free trade agreements (FTAs) and on the history of economic ideas.

Prior to moving to Singapore, Sally was long-standing faculty of the London School of Economics, where he also received his PhD. He is also currently the director of the European Centre for International Political Economy (ECIPE), a global-economy think tank in Brussels in addition to being an adjunct scholar at the Cato Institute in Washington DC. Reflecting on his mixed cultural background, Sally says he “grew up half-half in a Muslim family of traders”. Now in his late 40’s, he was born in Colombo, of an Anglo-Welsh mother and a Sri Lankan-Muslim father. Sally moved in his late teens to Britain to pursue higher studies and visited Sri Lanka infrequently thereafter, “as other interests, realities and imagination took over my life”.

He says that on the trips back home in his 20s and 30s, he chafed at the restrictions, rituals and traditions of the extended family he had grown up in, and at being in the shadow of his father, who was the managing director of the legendary Mount Lavinia Hotel, and a notable figure in Colombo society. Despite the comfortable lifestyle, Sally rues not growing up in a tradition of books and high culture, and of progressive values, although he seeks comfort in the love and security of an open minded, extended Muslim family that embraced his English mother.

“On her part, she too fitted in with great ease as she adapted to Muslim mores, learnt kitchen Sinhalese, and wore a sari when the occasion demanded. And she did all this without changing her look or personality”, he notes with great satisfaction.

“This childhood gave me a unique perspective and familiarity; it is a prop I use for looking at the country now. But, like Michael Ondaatje, with a child’s eye, I too took so much for granted and missed so much back then. Now I keep my eyes and ears open; I am alert to people and places. I see things I saw three to four decades ago; but I see them afresh now. My own Sri Lankan journey is one of discovery and rediscovery.”

Sally’s attitude to Sri Lanka changed in his 40s when he started travelling to East Asia and India for work. “In these years, it seemed that a mental block had lifted. It was time to get properly re-acquainted and shed the narrow western gaze with which to view my land of childhood and youth,” he says.

Early childhood in Sri Lanka for Sally–the latter half of the 1960s and early 70s—was prosperous and happy, set against the waning years of Ceylon’s post-independence “golden age”. That was a time, he says, of easy mixing among Sinhalese Buddhists, Tamil Hindus, Christians and Muslims; of relative political stability and social peace; of relatively well-functioning British-endowed institutions; of manners and cultivation among the English-speaking elite; and of optimism about the future.

“However, the economy deteriorated and by the mid-seventies, had crashed,” he says. “My few liberal-intelligentsia friends in Colombo—those who were formed by their 50s-and-60s’ golden age—decry the extreme politicization and degradation of public institutions in the 70s.”

He adds: “Power was centralized as never before; checks and balances were discarded; the civil service, judiciary and media, once paragons in post-colonial Asia, became government lackeys; nepotism and corruption became a way of life. This set a precedent for future governments led by both the SLFP (Sri Lanka Freedom Party) and the UNP (United National Party).”

Sally says that on his visits home in the eighties and nineties, politics became even more turbulent after ethnic conflict burst into a civil war in 1983. The Tamil Tigers assassinated one president and several cabinet ministers. Army checkpoints proliferated; SriLanka, once one of the least militarized societies in Asia, became visibly militarized. Although after long years of civil war, today, Sri Lanka is finally at peace, Sally does not take its future for granted, and is in fact highly critical of the current government’s policies.

Edited excerpts from an interview:

How do you view the economic prospects for Sri Lanka today versus a decade back and how will it engage with India going forward?

The return of peace and normalcy after the end of the war gives Sri Lanka a rare opportunity to make a fresh start with ethnic reconciliation and economic take-off. But Sri Lanka has “missed buses” before, and looks like doing it again. The government is authoritarian and chauvinist, and its economic policies are illiberal. Sri Lanka has become a (President Mahinda) Rajapaksa family business, and institutions have been thoroughly corrupted.

So Sri Lanka is the opposite of what Prime Minister Narendra Modi has in mind for India.

The economy historically has been South Asia’s wealthiest—abundant, fertile land, plantation crops for export, a relatively small population. But that has also bred complacency.

The success story since the opening of the economy in 1978 is a thriving garments industry, but it has not industrialized and diversified beyond that. To have East Asian style growth and living standards, Sri Lanka needs much more trade and foreign direct investment, but these are still very small percentages of the economy.

One of the biggest boons would be closer links with the four states of South India, a market of 300 million people close by. But the obstacle here is the Sri Lankan government, which for ethno-political and protectionist reasons wants to keep India, and Tamil Nadu in particular, at arm’s length.

What do you think lies ahead for India-Sri Lanka relations now that Narendra Modi is in power, and has extended a gesture of friendship and goodwill to its neighbour?

In the short-term, Modi’s gestures have slightly defrosted a long-strained relationship. It does provide a window to improve bilateral relations. And the BJP’s (Bharatiya Janata Party’s) Lok Sabha majority gives the new government a much freer hand to fashion policy on Sri Lanka without it being held hostage by populist politics in Tamil Nadu.

The government of India should of course support the rights of Tamils in Sri Lanka and voice concerns on human rights. But it could do so in a more nuanced and realistic manner than the approach of Western powers. The focus should be on pressing present and future issues rather than seeking full justice for what happened in the final phase of the war. The present Sri Lankan government will simply not accede to the latter, given its culpability. But it has to be engaged in some form or other. A near-exclusive focus on what happened five years ago detracts from crucial concerns in the here and now.

Also, the government of India has economic and geopolitical interests to advance as far as Sri Lanka is concerned. The bilateral CEPA (Comprehensive Economic Cooperation Agreement), a sequel to the Indo-Lanka FTA, has long been stuck; China, not India, is the Sri Lankan government’s “first friend”; and Indian businesses are losing out to Chinese interests in terms of post-war commercial opportunities.

So, are you cautiously optimistic about India Sri Lanka relations in the next few years or do you think that the relations will remain as complex between the two countries as before Modi took charge?

I am not terribly optimistic about a big, lasting improvement in bilateral relations—largely due to the nature of the government in Colombo. It is a Sinhala-chauvinist government that instinctively keeps India at arm’s length. That translates into privileging China over India (Sri Lanka is increasingly reliant on Chinese state-backed loans, and Chinese companies, backed by their government, are doing much of the infrastructure and power projects in Sri Lanka); and limiting the opening of Sri Lanka’s market to India due to the fear that politically well-connected Sinhalese businesses will suffer from South Indian competition. These positions are not likely to budge as long as the present government remains in power in Colombo.

As an economist, what do you think are some of the key reforms Modi should look into immediately to revive growth in India?

The obvious candidates for quick wins are: 1) fast-track approval for big projects (some with local investment, others with foreign investment) that have been stuck for some time; 2) raising FDI limits, preferably to 100% equity and with automatic approval procedures, in several sectors; 3) cancelling retroactive tax claims on multinational enterprises and clamping down on tax inspectors’ harassment of local enterprises; 4) pushing ahead with the long-delayed national GST (Goods and Services Tax); 5) giving the states much more leeway to pursue market-friendly policies without central government interference. These should be some of the priorities for the next 100 days and to the end of the year.

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