Indian businessess working on beating China at its game - report
June 4, 2010 07:39 am
As China’s
influence in Sri Lankagrows, India is seeking to
play bigger role in its southern neighbour and is putting pressure on Colombo to sign a trade
agreement, diplomatic sources said.
“There is some concern by Indiathat it doesn’t have the kind of role that Chinais playing in Sri Lankain the military, political and economic context. That appears to be a source of
concern for Indian authorities,” said an Asian diplomat, who spoke on condition
of anonymity.
Last week a group of local entrepreneurs backed by about 800
of their employees took to the capital’s streets in protest against a proposed
Indo-Sri Lankan trade services agreement, claiming that it would be detrimental
to Sri Lanka’s
economic interests.
The proposed agreement would make it easier for Indians who
work in certain service sectors, such as professionals, teachers, doctors and
lawyers, to work in Sri
Lanka. Some local entrepreneurs are
concerned that this would take jobs away from Sri Lankans.
The group immediately won assurances from Mahinda Rajapaksa,
the Sri Lankan president, whom they met to express their concerns, that the
government would not sign any trade pact that is detrimental to Sri Lanka’s
interests.
However, local political analysts view the recent
developments differently.
“I think the Indiaissue is more of a case of catching up [with China] in terms of trade and
development here. In recent years Indiahas been more interested in bringing countries [in Asia]
under its economic umbrella than political interests,” noted Harim Peiris, a
one-time spokesperson for Chandrika Kumaratunga, a former president.
Kusal Perera, a political columnist for the Colombo-based
Sunday Leader newspaper, said there is no issue between India and Chinavis-à-vis a presence in Sri
Lanka.
“In many ways, Indiaand China are working
together in joint projects like in Myanmar, for example, where they
are involved in building an airport,” he said in an interview. The countries
want to “co-habit” in the region and outside and also come together in an kind
of economic group, he said.
Last month, Indiaset up a consulate – mostly to handle visas – in Jaffna,
home to most of Sri Lanka’s
minority Tamil community, which has close cultural and family ties with the
south Indiastate of Tamil Nadu, but now suddenly wants the facility upgraded, the report
said.
“There was no immediate information as to what Indiahas said to justify the opening of a diplomatic mission in Hambantota. The only
reason attributable is its decision to directly confront what many Indian
watchers see as India’s
growing sensitivity to China’s
increasing economic development programmes in the Hambantota district,” the
report said.
While Indiahas long-established political, cultural and economic ties with Sri Lanka, China increased its presence after
Mr Rajapaksa became president in 2005.
This followed growing criticism by the West over
human-rights issues in Sri
Lanka in regards to strategies being used
against ethnic against Tamil rebels in the civil war. Unable to win support
from the West, the government expanded its friendship with India, Iran,Libya and the non-western
sector, particularly China.
The latter has lent huge sums of money for economic development and also
provided military arms support during the war.
According to Mr Peiris, China’s involvement has been “exponential”
in military, economic and political terms. China, while providing development
finance, is also involved in some of the biggest projects in the country such
as a port, airport, and international convention centre in Hambantota.
Mr Peiris said China,
which has a permanent seat in the UN Security Council unlike India, has also helped Sri Lanka deflect pressure from
allegations of human-rights abuses.
The Asian diplomat said the Indian foreign secretary,
Nirupama Rao, visited Colombo twice in the past
two to three months to persuade Sri
Lanka to sign the Comprehensive Economic
Partnership Agreement, an extension of the Indo-Sri Lanka Free Trade Agreement
that has boosted trade between the neighbours.
Samantha Kumarasinghe, the chairman of Multi Chemi Group,
which produces cosmetics, a huge industry in India,
said the extended agreement would destroy Sri Lanka’s control of trade and
services and bring more benefits to Indian businesses and professionals.
“Under this set-up any professional – even an Indian barber
– can come with his family to work in Sri Lanka,”
Mr Kumarasinghe, who organised the protest demonstration on Tuesday in Colombo, said.
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