Politicians mainly use two weapons to convince people to vote for them. They are the political ideology and the economic prosperity. It seems that the economic prosperity is much stronger than the political ideology. What Sri Lanka may need more is economic prosperity.
Sri Lanka’s economic prosperity in the 21st century may highly depend on the business relationships the country can maintain with the world, particularly, with the USA, China and India. Sri Lanka may need less politicians and more strategists to achieve economic prosperity.
It appears, the world is moving from the European century to the American century to the Asian century. The North America, Europe and Japan dominated world economy is now shifting towards the east. It may be dominated by the USA, China and India in the future.
The importance of a country in the 21st century may depend on its industrial strength (Gross Domestic Product), market (purchasing power), population and land area, education level of the population and the military might. According to the World Bank, the USA recorded the highest Gross Domestic Product (GDP), followed by China in 2016. India remains in the top ten. In terms of purchasing power (GPD Purchasing Power Parity) China leads the table followed by the USA and India. The USA, China and India together govern a large portion of the word’s population and land.
The World Economic Forum ranked the USA among the top 10 countries based on secondary and tertiary enrolment rates as well as the quality of education in 2016. Although China and India are lagging behind, they may catch up soon. According to Forbes all three countries are among the highest investors on military, in 2016. Connecting one of the busiest shipping routes in the world, Sri Lanka’s geographic location links the east and the west in the spice routes, also known as maritime silk roads. Sri Lanka desperately needs Foreign Direct Investment (FDI) and export revenue. The island nation expected to attract US$3 to 4 billion FDI in 2017.
It was not so long ago that Sri Lanka talked about an ambitious exports revenue target of US$ 50 billion by 2020. Sri Lanka may gain its economic prosperity by cooperating with the rest of the world, particularly, with the USA and the two rising Asian nations: China and India.
According to the Department of Commerce, in 2015 Sri Lanka’s top five exporting destinations were the USA, UK, India, Germany and Italy. The country’s top five origins of imports were India, China, Japan, the UAE and Singapore, the same year. But to achieve the expected level of FDI and export revenue, Sri Lanka may need country specific strategies targeted to increase business with the USA, China and India, particularly.
However, the USA, China and India seem to maintain different attitudes and orientations towards international business. In the recent BRICS summit in Xiamen, China, Chinese President Xi Jinping stated “we should push for an open world economy, promote trade liberalization and facilitation, jointly create a new global value chain, and realize a global economic rebalancing”. China is walking the talk with its ‘Road and Belt’ initiative. In contrast, it appears that the USA is becoming a lesser supporter of trade liberalization.
As a result the USA departed from the Trans Pacific Partnership Agreement, known as the largest trade agreement in the world.
In the meantime India is taking measures to improve the ease of doing business and liberalize regulations to attract FDI. India is driving its ‘Make in India’ initiative and was bold enough to take some strong and controversial decisions to support business. Changes in trade policies in the USA, China and India may impact their trading partners.
It is the time to find out Sri Lanka’s international business strategy in the 21st century. Does the Sri Lankan government have a plan to build more dedicated channels and platforms to attract FDI and take Sri Lankan businesses to the world? If Sri Lanka wants economic prosperity, its 21st century leaders need to be strategists who could find a path that balances the country’s national interests, international business and international relations among the complex business orientations and attitudes of the world, particularly, the USA, China and India.
The writer is the University of Otago’s (New Zealand) first PhD in International Business. He has worked at various multinational companies and now works as a Business Analyst at Power Shield Ltd in Auckland. He is also a visiting lecturer in International Business at the University of Colombo.