“A deep understanding of how the world perceives Sri Lanka has helped me identify opportunities and gaps. There is a huge reservoir of goodwill for our country. The world certainly wants us to succeed,” says Dinusha Panditaratne, Executive Director of the Lakshman Kadirgamar Institute (LKI).

LOCATED ALONG COLOMBO’S HORTON PLACE, the island’s leading foreign policy think tank’s antique ornamentation is somehow apt for a think tank that will carry forward the legacy of research of Sri Lanka’s long engagement with the outside, to a rapidly transforming world order. The foyer where policy experts gather to debate their outlook is well-complimented with a stunning garden view.

Panditaratne is also a lawyer, driven by her passion for justice and human rights. Her world views are shaped through her experiences as a Sri Lankan diaspora, having lived in five different continents – Asia, Australia, the UK, the US and Africa – while growing up. She spent the last two years navigating LKI’s research agenda, while keeping the organisation in order. Seated at the institute’s library, she shares her perspectives on Sri Lanka’s foreign policy, and the economics surrounding the Indian Ocean.

Sri Lanka’s foreign policy is centralised on the vision to develop as the ‘Centre of Indian Ocean’, and extend beyond South Asia. “Even though the government is often criticised for its inconsistency, there has been quite a remarkable degree of consistency in its foreign policy,” says Panditaratne. A book written by Neil Padukone titled ‘Beyond South Asia’ lies in the background amid other volumes of international and foreign affairs at the library.

The Indian Ocean is the main theatre for Sri Lanka to develop its economic interest, while linking emerging trends to capitalise on new growth opportunities. Around half the world’s trade and a similar amount of its container traffic and 70% of oil pass along the Indian Ocean. Shipping traffic has grown 300% in a span of 20 years. A third of global trade now passes though Indian Ocean ports.

Colombo is ranked seventh from among the top ten Indian Ocean ports. There is a resurgence of interest within the ocean spaces. In the past, during the Obama era, there was a lot of emphasis on using the Asia Pacific, which signified a land-based view of that administration’s ‘pivot to Asia’ strategy. But today, it has been replaced with ‘Indo-Pacific’, asserting the importance of the two oceans. Sri Lanka needs to balance the two emerging powers, China and India, as both countries eye strategic advantage in the sea.

“Traditionally, Sri Lanka was perceived as a South Asian country, where we were at the tail end of the region. But now, with the re-focus on its branding, Sri Lanka will be at the center of this region, as the gateway to South Asia,” adds Panditaratne. Being at the center opens access to a wide spectrum of fast-developing countries, especially in East and Southeast Asia. Besides that, Sri Lanka would focus on the African continent, an emerging market to the West. Today, Africa constitutes less than 20% of the world’s population, and is expected to account for 40% of the world’s population by 2100. Sri Lanka’s re-branding clearly considers the long- term view: If this is the Asian century, then the next would be Africa. Additionally, Sri Lanka will function as the hub of the Indian Ocean, and as a midpoint between Dubai and Singapore, the two existing hubs.

Sri Lanka has been a high performer compared to other South Asian countries in terms of socio-economic indicators like life expectancy, literacy rate, mobile phone penetration rates, etc. “Similar to a high-performing student, we are ready for promotion. It’s time to move on to a bigger cohort,” says Panditaratne.

SHE HAS SPENT a major part of her life in Hong Kong, lecturing at the Chinese University of Hong Kong and the University of Hong Kong. That country, which used to be a tiny fishing village, has spectacularly transitioned to become one of Asia’s most dynamic cities.

“Hong Kong developed with a free press, tradition and rule of law; they had a lot of internal self-reflection. It’s a country that welcomes international perspectives. Sri Lanka also needs to communicate the benefits of this,” says Panditaratne. Hong Kong’s Court of Appeal has an independent judiciary system where a non-permanent foreign justice sits with four other permanent judges from Hong Kong on every case.

“Recognition of the rule of law and human rights will maximise economic opportunities for Sri Lanka. We need to have additional emphasis on embedding the rule of law and reforms in the form of an independent judiciary and freedom of expression. Economic opportunities and respect for law and rights are inextricably linked,” she says. Panditaratne firmly believes that key victories such as re-gaining GSP Plus and lifting the EU fisheries ban shouldn’t be taken for granted.

The European Union is a major trading partner for Sri Lanka. They are our key export market. “Our relationship with the EU certainly demands attention to the rule of law, but that’s not the only reason to have it. It should be for ourselves mainly, and not because Western countries impose it on us,” adds Panditaratne.

She passionately advocates the importance of the rule of law for a prosperous economy. “There are many who propagate democracy as a barrier for economic progress, but I don’t believe in that,” she adds.

Prevailing peace in the country, along with global shifts, have re-kindled Sri Lanka’s interest in economic diplomacy. In the past, with the Cold and Civil wars, the focus was on developing political diplomacy. “There is a clear synergy between the Indian Ocean strategy and economic diplomacy. Being the center of the Indian Ocean needs to be well-supported by a web of FTAs,” Panditaratne says. The government is actively working towards FTAs with India, China and Singapore. There is a possibility of FTAs with Bangladesh, Indonesia, Malaysia and Thailand as well, basically with all the Indian Ocean countries. There are efforts to re-balance the portfolio regarding investments from India and China in Sri Lanka. It’s sensible, she says, to have a broader range of investment opportunities, rather than to have all of one’s eggs in one basket.

THERE IS UNCERTAINTY about the role of the US, once the dominant force, as power shifts in the global economy from the West to the East. At this time, it’s increasingly important to gain clarity within the region. “The absence of a rule of law domestically and internationally, in a time when there is no clarity, is a real risk,” adds Panditaratne. She reckons it’s essential for small countries including Sri Lanka to keep a close watch on the strategic competition between China and India in order to ensure regional stability. The One Belt, One Road initiative should be dealt with a sense of cautious optimism. The focus should be on developing domestic legal frameworks and ground rules internationally, even though the latest developments could yield economic dividends. The Indian Ocean Framework and the One Belt, One Road initiative are like two circles in a Venn diagram, and the mid-intersecting point needs to have an established set of rules. The One Belt, One Road initiative has evolved to a high degree, with a largely clear framework for connecting Asia and Europe, to build a bigger continental space, referred to as Eurasia, with an investment of around $1 trillion. There are many investment opportunities. Sri Lanka has grasped two opportunities in the Colombo and Hambantota ports.

“Sri Lanka needs to develop a set of rules and standards, rather than preparing agreements on an ad hoc depending on the investor. They need to be able to say, ‘if you invest in Sri Lanka, these are standard rules on labour, environment, transparency, etc.’, and it has to be clearly communicated from the beginning,” adds Panditaratne. For instance, western countries have a set of standards when they agree to investing, so national legal frameworks are crucial in ensuring that the minimum standards are maintained.

The Sri Lankan government has re-assured that the island would deter military activities in response to concerns on security implications of Chinese investments in the country. However, transnational security issues should be given high importance, keeping in mind that Sri Lanka is a small country and is dealing with larger emerging powers. “We need to take an active role in developing frameworks in a multilateral way. The code of conduct for the Indian Ocean should involve a bigger set of factors by engaging with the whole range of Indian Ocean countries,” adds Panditaratne. Smaller states need to focus on building regional relationships and supporting a rule-based order with their large neighbours. Smaller state countries like Singapore, New Zealand and Netherlands have a good relationship with their larger neighbour countries such as Malaysia, Australia or Germany. “We talk a lot about Singapore, a city state, when it’s not that much larger than greater Colombo. Netherlands and New Zealand, with a similar agricultural heritage and hinterland to Sri Lanka, are overlooked examples, too,” she explains.

A supporting rule-based order, where Netherlands was part of the EU and Singapore of the ASEAN framework, was critical to their success. Whereas New Zealand, on the other hand, developed Free Trade Agreements with Australia at an early stage, while interacting as partners rather than competitors.

“Similarly, Sri Lanka also needs a normative framework to manage strategic competition,” says Panditaratne.

PANDITARATNE REMINISCES her days at The Law and Trust Society, where she had the opportunity to work with Neelan Tiruchelvam, a remarkable scholar and parliamentarian. “He welcomed people with international exposure and inspired me to think about the long term,” she adds. Similarly, the institute’s staff is also a blend of people with international and local exposure.

Locally based private businesses have funded the institute’s research endeavours, without attaching any strings, guaranteeing research independence, which has helped in recruiting renowned foreign experts. Dr. Ganeshan Wignaraja, an eminent economist of Sri Lankan origin, who was also the research director of the ADB Institute in Tokyo, is currently serving as the Chair of Global Economy Programme at LKI. Whereas Dr. Kadira Pethiyagoda joined the institute in early 2018 to serve as the research director of the Global Governance Programme. He also functions as a non-resident fellow at the Brookings Doha Center. “We want to be a beacon that attracts oversees Sri Lankans to the country to benefit from a wide range of international perspectives, working towards prosperity,” says Panditaratne.




Executive Director of Lakshman Kadirgamar Institute
Former Assistant Professor at the Faculty of Law at the Chinese University of Hong Kong
Former Visiting Fellow at the University of Hong Kong

Degree in law with first class honours, University of Oxford
Masters and PhD in International Human Rights Law, Yale Law School

Signature Quote
“The absence of rule of a law domestically is a real risk during uncertain times. Recognition for the rule of law and human rights is important to maximize economic opportunities.”