The race to recover with FDIs – By Prof. Samitha Hettige

November, 21, 2022

The FDI Colombo Port City (CPC) came to SL in 2014 as part of the BRI of the Peoples Republic of China (PRC). The BRI has so far invested more than 150 billion USD in the 150 plus BRI partner countries and organizations. As SL is in a crisis the CPC should be completed in the shortest possible time and the necessary laws should be enacted by to facilitate that. When the world feels that SL is investor friendly culture global investors will be attracted. As a first step Indian investors should be invited as Indian involvement in the CPC would be a win-win situation. They have a trade surplus and culturally closer. They can be strategic players in preventing domestic conflicts. Historically SL experienced the negative impact of domestic conflicts due to distancing India in the late 1970s. Sri Lankans may think that Indian investors will not be interested in getting involved in a Chinese FDI. What should be remembered is that the CPC is an immovable property of SL and China and India are very strong trading partners since 3rd century BC. As per Chinese stats Indo China bilateral trade amounts to approx. 100 billion USD per annum known as the “Chennai Connect” within BRI.

A lesson from China

The Macao Special Administrative Region of the PRC is a city located near the western Pearl River Delta close to South China Sea. It’s a densely populated urban territory where approx. 20 Sq KM out of its nearly 33 Sq KM land area is built on land reclaimed from the sea. As the population is approx. 680,000 (by 2020) it is known as one of the most densely populated regions in the world. The Ming dynasty which helped SL Buddhist monks to establish the Sri Jayawardhanapura kingdom around 1410AD leased the territory to the Portuguese Empire in 1557. Portugal paid an annual rent and administered the territory under Chinese sovereignty until 1887. It was a Portuguese colony till 1999 similar to Hong Kong which was leased territory to the British Empire till 1997. Macao with its historic architecture is a UNESCO world heritage site (Chinese sources).

SL’s attempts to promote colonial ear structures to attract investors through the “Selendiva” enterprise though criticized by some may help to attract more investors who are already attracted to the CPC if properly managed. It was reported that an investor had already come in to build and operate a water park near the Lotus Tower. Colonial rulers who invested in the Beira Lake may never have imagined that the lake would attract FDIs centuries later. Macao in PRC is commonly known as the "Las Vegas of the East" as it’s a high end gambling tourism destination with an industry seven times larger than the gambling industry of Las Vegas, USA. Its per capita income and GDP per capita by purchasing power parity are one of the highest in the world. Macao has world’s fourth highest life expectancy and has a very high human development index (Chinese stats).

Chinese population believes that Sea goddess “Mathsu” protects and blesses the harbour and the waters and the temple dedicated in her name. When the Portuguese first arrived passing Colombo on their way seeking Silk and Porcelain, the locals have told them that the area is known as “Macoc” thus the Portuguese naming it as Macao.

During the Chinese civil war thousands from the mainland had entered the territory just as they entered Hong Kong making it a highly populated area. During the Portuguese rule Gambling was legalized and after the socialist Carnation Revolution in 1974, Lisbon gradually released its colonial bonds such as Macao, Mozambique and East Timor.

Then it became a Chinese territory under Portuguese administration and went on to liberalize its casino industry putting an end to government monopoly which allowed foreign investors pouring in signaling a new era of rapid economic development. Macao is now ruled under the one country two systems method and the main streets of the territory become race tracks hosting international events similar to Monaco Grand Prix during festive times. Sri Lankans were critical about similar experiences in Colombo and Kandy but it will be good if the CPC can be used for such events to attract more FDIs.

(The writer is an Academic and a Broadcaster. Views expressed are personal and may not necessarily be the views of his affiliations.)