With its pure magnificence, wildlife and tradition, Sri Lanka is named the “pearl of the Indian Ocean”, and attracts hundreds of thousands of vacationers yearly.
However my analysis means that the nation won’t be so reliant on tourism sooner or later, because it seems to be to turn out to be a significant participant in world maritime commerce. The island’s quite a few harbours and enviable location alongside worldwide sea routes have led to main funding from China and the US, as they search to increase their strategic affect within the area.
That funding is being welcomed after years of financial and political turmoil in Sri Lanka.
The Easter bombings of 2019 focused Catholic church buildings and resorts, killing 269 folks and devastating tourism. The identical yr, vital tax cuts slashed authorities income earlier than COVID did critical harm to the financial system.
In 2021, a ban on chemical fertilisers led to nationwide agricultural failure, whereas extreme borrowing and cash printing triggered hovering inflation, which peaked at 70% in August 2022. The nation ended up failing to pay its overseas money owed.
To date, a few of the results have been optimistic. Inflation has eased, investor confidence has improved and extra tea, clothes and rubber merchandise are being exported up.
Key to this has been improved logistics and port infrastructure. Enterprise on the port of Colombo, the nation’s largest, is booming, aided partially by world delivery disruptions, together with the Crimson Sea disaster, which rerouted vessels by means of the Indian Ocean.
However worldwide maritime ambitions could be a complicated affair, and Sri Lanka must be cautious of turning into only a well-positioned commodity for the world’s financial superpowers.
China for instance, has secured a controversial 99-year lease of Hambantota port. India, cautious of Chinese language encroachment, has ramped up its personal investments, together with the event of a container terminal in Colombo.
In 2023, the US introduced a US$500 million (£372 million) plan to develop a deep-water delivery container terminal on the port of Colombo. And the potential US tariffs of 30% on imports from Sri Lanka have been interpreted by some as a stress tactic to get larger entry to its waters.
Balancing these pursuits is a fragile act. Whereas overseas funding is essential for infrastructure growth, Sri Lanka wants to guard its sovereignty and make sure that port operations serve nationwide, not simply worldwide, pursuits.
My analysis means that a method of constructing a resilient and numerous Sri Lankan financial system can be to concentrate on its surrounding waters. Sri Lanka’s huge “exclusive economic zone”, an space of sea the place it controls marine assets, holds huge untapped potential.
Blue financial system
This potential lies in conventional sectors like fisheries and tourism, but additionally rising industries corresponding to marine biotechnology.
This rising subject presents alternatives in issues like bioengineering and marine-based prescription drugs. With different international locations quickly advancing in these sectors, Sri Lanka is well-positioned to comply with swimsuit and turn out to be a regional chief within the blue financial system (financial actions related to the sustainable use of ocean assets).
Enterprise is booming within the port of Colombo.
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However there’s nonetheless a fancy internet of geopolitical pursuits and financial pressures to navigate, in addition to environmental challenges.
In the meanwhile for instance, the Sri Lankan authorities is planning for the deep pure port at Trincomalee to turn out to be a significant marine restore and refuelling centre between Dubai and Singapore. Different proposed tasks embody offshore wind farms and oil rig services.
The nation additionally must compete with the likes of Malaysia, which is investing closely in AI-driven port operations. To remain aggressive, Sri Lanka should modernise infrastructure and streamline processes.
And regardless of the progress, challenges persist. Poverty in Sri Lanka has doubled since 2021, whereas youth unemployment stays excessive.
Sri Lanka faces rising maritime threats like piracy and unlawful fishing, requiring stronger maritime surveillance. Concurrently, port growth dangers damaging marine ecosystems. Inexperienced applied sciences and stricter environmental rules are important for long-term safety and sustainability.
Sri Lanka’s strategic location and maritime heritage provide a basis for financial renewal. With smart governance, sustainability, and balanced geopolitics, its ports might as soon as once more turn out to be very important gateways to regional prosperity and world commerce.
