An economist from Singapore's Lee Kuan Yew School of Public Policy says Sri Lanka has been withholding trade from India, most notably the neighbouring Southern states, "for a combination of chauvinistic reasons and defensive economic reasons of some [local] business."

Dr. Razeen Sally, formerly of the London School of Economics (LSE), stated,

"It strikes me that Sri Lankan foreign policy, which of course includes foreign economic policy - is completely lopsided,"

"Because the picture we have is of China as first friend. But old friends had been alienated and some potential friends like India has been kept at arms length… Now it strikes me that that batting order comes directly counter to Sri Lanka's core economic interests."

He went on to say that exports to India made up only 6%, even though natural geography predicts a much higher value.

"There is everything to be said of much stronger economic linkage between Sri Lanka and the four states of South India,"

"If there is to be a way for Sri Lanka to get into global supply chains as quickly as possible beyond the garment story in other areas of manufacturing and many areas of services - even areas like agro food processing and fisheries, the route lies through South of India and the link up and presence of more south Indian companies here in Sri Lanka".

"But that of course is held at arms length for a combination of chauvinistic reasons and defensive economic reasons of some business here."

Prof. Sally also commented on Sri Lanka’s relationship with the West, in particular the EU and United States, who account for about 60% of Sri Lanka’s exports, saying:

"So it is not rocket science, but simple common sense for Sri Lanka to have good relations with the Western powers because Sri Lanka needs them more than they need Sri Lanka".

See our earlier posts:

Bilateral relations? (10 April 2012)
Anyone but the Indians (29 April 2012)