Sink or Swim
In the swirling currents of global politics, nations, big and small, navigate tricky waters, aiming to chart their courses while contending with the winds and waves created by more formidable powers.
Sri Lanka, a splendid island nation with a history as rich and complex as its lush landscapes, finds itself at the epicentre of such a geopolitical maelstrom. The impending Presidential Election is not merely a domestic affair but a litmus test in a global power play involving China, India, Japan, and the US. Every move in this intricate game bears immense implications, shaping not just the island’s political fabric but also carving its economic destiny.
War of influence
The recent unfolding of events in Taiwan, where Chinese aspirations were thwarted with the election of Lai Ching-te, has shifted the geopolitical lens to Sri Lanka. If Taiwan was a two-way battle, Sri Lanka will be a four-way one, especially given the debt restructuring in play with billions of dollars of bilateral loans in jeopardy.
Japanese Finance Minister Shunichi Suzuki’s visit was well received in the media, and the tone of the message was serious. Sri Lanka has to restructure the debt and start paying what is due, and the International Monetary Fund (IMF) process should be followed. His message was clear and, in the Japanese way, had a direction.
Previously, Indian Finance Minister Nirmala Sitharaman said the same thing in a more South Asian way. Sri Lanka has become the favourite destination for influential political leaders to echo the same sentiments to protect their interests. The country may be small but is too large to fail and the stakes are extremely high.
The island is a pivotal arena in this silent yet intense war of influence. It is a narrative that resonates with those who keenly observe the grand strategy of superpowers – smaller nations often find themselves as pawns in the chess game of international politics.
Saliya Weerakoon, Senior Corporate Executive
In contrast, yet intrinsically linked, is the Indian political landscape. India Foundation President and an Rashtriya Swayamsevak Sangh (RSS) Leader Dr. Ram Madhav delineates the upcoming Indian elections to be dominated by themes of identity, economy, security, and national pride. These four pillars echo profoundly within Sri Lanka, albeit with a stark difference: a crisis of identity, a bruised national pride, and a collapsed economy.
Against this backdrop, the Presidential Election in Sri Lanka is not a battle of ideologies but a desperate quest for economic salvation. It looks like a foregone conclusion that Prime Minister Narendra Modi will have a successive third term unless a grand coalition creates an upset. The Bharatiya Janata Party (BJP) communication machinery was always in the campaign mood.
National pride vs. personal dignity
The narrative of India and the narrative of Modi’s BJP are closely linked and to defeat a coordinated campaign as such requires people, resources, and campaign assets that cannot be found in a hurry. This contrasts with Sri Lankan politics.
Every Sri Lankan government, except for the Rajapaksas in wartime, failed to communicate to its people. Even if created, messages and messengers had limited credibility.
The current economic conditions in the country are severe and people do not have the energy any more to engage in public discourse, but only to see through one of the most difficult economic periods of our living history. If Madhav is reflecting national pride, most Sri Lankans are fighting for personal dignity.
Reliance and Jio
The news of Mukesh Ambani’s Reliance Industries’ interest in acquiring the State stake of Sri Lanka Telecom made news waves in Sri Lanka and India. There were three bidders for the Sri Lanka Telecom sale, but Jio Platforms’ interest had a broader appeal.
First, it was an Indian corporate goliath; second, it was Ambani. Mukesh, Neeta, and Akash are known names at least with the cricket-loving public, through Mumbai India’s role in the Indian Premier League. Legendary cricketers – Sanath Jayasuriya, Lasith Malinga, and, more recently, Mahela Jayawardene – opened eyes for the Ambani family in Sri Lanka and even Neeta appeared on social media memes.
Reliance carries founder Dhirubhai Ambani’s ambition and relentless pursuit of dominance and results. It is seldom that Reliance had done wrong calculations in business and Jio was another Indian masterpiece.
The strategic interests of Jio Platforms in Sri Lanka Telecom are worth pursuing. Significantly, the news had broader implications. The telecom industry in Sri Lanka was shaken and the competition was naturally worried. Reliance is India’s pride in business. A Fortune Global 500 company (ranked at 88), it boasts a market capitalisation of $ 222.65 billion.
Why would Jio want to enter Sri Lanka during an economic catastrophe and a Presidential Election in the latter part of the year? An investment of this nature requires severe political and economic risk calculations. Jio had eliminated Indian telecom competition in a few years in India and the strategies it adopted were unconventional and more often brutal.
The Reliance Group has wider business interests from oil to news channels; the digital is its passion project and the telco is the enabler. Jio Platforms possesses 5G, fixed wireless access, digital technology, entertainment, commerce, communication, finance, healthcare, agriculture, and education. The powerful financial muscle provides it with the ability to grow exponentially in a smaller market of 20 million people and two million in the diaspora.
If Adani wants ports and energy in Sri Lanka, Ambani could play across any valuable industry. I have written before that having skin in the game in Sri Lanka is more critical to leverage Sri Lanka’s strategic location than providing aid. At least two million employment opportunities need to be created in the next two years, especially for the youth, and strategic investments are required to scale Sri Lankan businesses.
Jio, the trailblazer?
During the best year of tourism in 2018, India and China contributed nearly 50% of the footfall. Both countries continue to be the strongest feeder points for Sri Lankan tourism and a powerhouse of the likes of Jio Platforms could help to sway Indian tourists to the island.
Jio owns five mainstream news channels including CNBC and many more entertainment channels of the likes of Colors and MTV India. Cricket and entertainment is the bloodline of Indian hearts and Sri Lanka could capitalise on it for good. Sri Lanka needs a big investment to show the world that it is ready for growth. Is Jio the trailblazer? Or will this be another great story that never sees light?
Twenty million Indians departed for different destinations in 2022. The usual suspects are the UAE, Saudi Arabia, and the US with 5.8 million, 2.4 million, and 1.6 million, respectively, where the Indian workforce is heavy. Tourist destinations such as Singapore and Thailand attracted nearly 900,000 people.
Indians are roaming other destinations when beautiful Sri Lanka is next door with merely two hours of flight time. Can an Indian corporation like Jio be the catalyst for tourism in Sri Lanka as well? The island needs a similar big-timer from China as well to make Sri Lanka the most happening place, at least for both nationalities.
Uncertain terrain
Across social classes and segments, Sri Lankans are probably witnessing the worst economic conditions in living memory. Even during the 26 years of civil war and rebellions, economic conditions were not this difficult across segments. Therefore, the anxiety and frustration are evident.
State enterprises such as SriLankan Airlines and Sri Lanka Telecom are under the hammer for divestment. The unrest in these two organisations is apparent. The situation at SriLankan Airlines is more severe than that at Sri Lanka Telecom. Both are overstaffed, many with political favours. But all are human; they fear job losses and uncertainty, especially in an uncertain terrain, which doubles up the resentment. The trade unions are planning their next steps to thwart any selling, primarily due to fears of losing their livelihood.
Many people have lost their livelihood since the Easter attacks on 21 April 2019. Thousands of youth were lost to other countries – they were not seeking greener pastures, but were looking for survival.
In comparison to the chaos in 2022, the current state of the country in 2024 poses different challenges. A Presidential Election has divided the country and no one is in working mode. Who is going to lead the country towards 2029? No one seems to be bothered, but Anura Kumara Dissanayake’s (AKD) rise is evident. The dawn of the year started with increasing political campaigning, and for the next nine months the country will be in election mode and, indeed, not in working mode.
It will be interesting to see how AKD and the Janatha Vimukthi Peramuna (JVP) will respond to the Sri Lanka Telecom sale. This is a possible Indian investment and a protest against this may have political implications. However, over the last few months, AKD and the JVP have shown a much more flexible approach to Foreign Direct Investment (FDI), private universities, and increasing national production.
The JVP, for the first time in history since 1965, is a strong contender for governance. It is a different battle for it to navigate this new-found glorious space. The other mainstream presidential candidate, Sajith Premadasa, is for FDIs, the last time I checked. The incumbent, President Ranil Wickremesinghe, is in the campaign mood as well, aggressively creating the stability story or, in another way, creating fear with the instability story.
For the sake of liberalisation
The names Tata, Ambani, and Adani are more famous now in Sri Lanka than some of the local business heroes. There will be a day for more Chinese, Japanese, and American names to appear in Sri Lanka as well. Sri Lanka should be for all, but it’s important to protect Sri Lankan businesses with small balance sheets and less financial muscle.
There is always a reason why Sri Lankans prefer protectionism to liberal economic policies. Liberalisation, for the sake of liberalisation, will hurt the country and its people. FDIs are required for growth. More than growth, FDIs are needed for survival.
Sri Lanka is a great location, but in the eyes of investors, so what? The local businesses fear being swallowed up by deep-pocketed global players. The unknown territories are the hardest; amidst a severe economic downturn, you are forced to do the unthinkable for mere survival.
Beyond business?
The Jio move transcends the realms of mere business expansion; it could be seen as a geopolitical manoeuvre. In Sri Lanka, everything is political.
Ambani, a colossus in the global corporate arena, seeks more than just corporate growth. Do his actions hint at a strategy that intertwines business acumen with national interest? Reliance’s potential foray into the Sri Lankan market amidst its financial turmoil raises pertinent questions.
Why would a behemoth like Reliance eye an investment in a country grappling with economic chaos? The answer lies not in the immediacy of the present but in the latent potential of the future. Reliance’s entry into Sri Lanka’s telecom sector is not just an investment in a communication network but a stake in the nation’s digital future.
The unease within Sri Lanka Telecom is palpable. Employees are gripped with fear for their jobs, symbolising the broader uncertainty that plagues the nation. This fear is not unfounded; it mirrors the anxiety of a population witnessing their national assets being negotiated in the global marketplace. And decades of political narratives are not helping the workforce either.
The silence of the Sri Lankan populace, often misconstrued as surrender, is, in fact, a simmering volcano. It is a build-up of frustration and despair, a muted yet powerful signal of the brewing discontent. The fear for livelihoods transcends beyond mere apprehension; it’s a living reality in a country where transparency is scarce and every manoeuvre seems pitted against the commoner. As Sri Lanka steers through this complex maze, the imperative for a swift resolution to its economic woes becomes paramount.
The entry of foreign corporate giants into the market might offer a beacon of hope, yet it simultaneously forces fear if not handled delicately. The delicate balance between welcoming investment and safeguarding employee interests is a tightrope, necessitating astute and visionary leadership.
The trade unions are readying for street protests. The leaders should show empathy and engage people to educate them on what is for ‘them’. These protests are not mere expressions of dissent; they are a clarion call for a more equitable and transparent process, ensuring that the interests of the Sri Lankan people are not relegated to the background.
Sri Lankans are often said to have an ‘islander mentality’. But critics conveniently forget that Sri Lanka/Ceylon was the intellectual hub in the Indian Ocean for decades, if not for centuries. The problem lies not only with political leadership but also with business leadership and the public. This crisis is forcing people to think differently, out of their comfort zone. This is the only silver lining and something to look forward to.
As Madhav stated, India is going for national pride. It is a matter of time before Sri Lanka goes for national pride once again too, once it clears the economic mess.
The decisions made today will not only shape the nation’s economic future but also define its place in the global order. It is a high-stakes chess game and the international community scrutinises the moves. The question that looms is whether Sri Lanka will emerge stronger, charting its course, or remain small and irrelevant.
