Why more to China and step-motherly treatment to the hand that helped over the years?
Wednesday, 21 January 2015 00:00
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By An Industry Analyst
Sri Lanka is currently the 72nd largest goods trading partner with the US, with $ 2.8 billion in total (two-way) goods trade in 2013. US goods imported to Sri Lanka totalled $ 314 million, while Sri Lankan exports to the US totalled $ 2.5 billion. The US goods trade surplus for Sri Lanka was $ 2.1 billion in 2013.
Of this trade, $ 1.7 billion is linked to the apparel industry, a generator of close to 300,000 jobs in the country, creating the type of wealth trickling down to the corner shop in the village rather than just the pockets of those in the echelons of power.
The United States Agency for International Development (USAID) has maintained a presence in Sri Lanka since 1948 with US assistance totalling more than $ 2 billion since Sri Lanka’s independence. In FY13 the United States provided $ 8.7 million to support the post-conflict humanitarian situation in Sri Lanka.
Through USAID, the US has contributed to Sri Lanka’s economic growth with projects designed to reduce unemployment, improve housing, develop the Colombo Stock Exchange, modernise the judicial system, and improve competitiveness. The US also provides technical assistance/training opportunities to Sri Lanka in many areas including biotechnology, intellectual property rights protection, and cyber security. USAID-funded projects aim for long-term, sustainable development.
Were these trade and aid ties, cultivated over the years, of so little value to the Rajapaksa Government, that it continued with its misguided policy of handing out multi-million and multi-billion dollar projects solely to Chinese firms? What is the justification for this policy, especially in the face of bids being offered by US companies that are far more competitive and offer more solid international expertise?
Sri Lanka’s trade gap remains significantly in favour of China, with a deficit of $2.4 billion! It is time to take an intelligent approach to this question, without blindly handing projects to Chinese companies, thereby simply contributing to widening our trade deficit to China’s advantage.
