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Your weekly digest of foreign policy commentary
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Serina Rahman highlights the importance of economic concerns in Malaysia’s election. Image credit – ermakovaphotography / deposit photo
SRI LANKA COMMENTARY
Cambodia, Sri Lanka and the China Debt Trap, East Asia Forum, by Veasna Var and Sovinda Po, UNSW Canberra and ECNU
“Cambodia needs to diversify its borrowing sources [to] multinational donor agencies … While the approval process would be slower, the wait is beneficial because these loans are attached to strict conditions of accountability, transparency and rule of law.”
- Veasna Var and Sovinda Po reiterate a common argument of other commentators, who have warned that China is leading its regional neighbours into a “debt trap.”
- Sri Lanka’s difficulty in paying back its debts paved the way for China to gain a controlling stake in the Hambantota port, which may provide Beijing with a military asset.
- To avoid a similar situation, Cambodia should diversify its financing, set clear terms when borrowing from China, and engage more with regional initiatives such as ASEAN.
LKI Take: While Sri Lanka needs diversified and rules-based financing, its debt to China is often overstated. Multilateral agencies and financial markets hold most of its external public debt. China holds an estimated 6% of Sri Lanka’s public debt, compared to 50% of Cambodia’s.
Malaysia Reborn? Does GE14 Spell an End to Racial Politics?, Channel News Asia, by Serina Rahman, ISEAS-Yusof Ishak Institute
“These elections have shown that economic matters and a concern for the well-being of future generations trumped generational loyalty to the BN government and ethnic fears.”
- Serina Rahman argues that the opposition’s victory in Malaysia’s recent election reflects the economic concerns of ethnic Malay voters taking precedence over their traditional loyalties to the Barisan Nasional (BN), which had held power for 61 years.
- There was a large swing to the opposition in all parts of the country, including Malay-majority areas that have long been strongholds of the BN.
- This is a hopeful sign that Malaysia may be moving away from ethnic identity politics and towards a focus on the everyday problems that all Malaysians are concerned about.
LKI Take: As Malaysia’s new government decides on its economic priorities and foreign policy, Sri Lanka should ensure that its potential free trade agreement (FTA) with Malaysia remains on the agenda, especially given Prime Minister Mahathir’s previous scepticism of FTAs.
How Costa Rica Gets it Right, Project Syndicate, by Joseph Stiglitz, Columbia University
“With authoritarianism and proto-fascism on the rise in so many corners of the world, it is heartening to see a country where citizens are still deeply committed to democratic principles.”
- Joseph Stiglitz argues that Costa Rica’s commitment to democratic and progressive principles is an encouraging example at a time when these ideals are under threat.
- Costa Rica has joined like-minded countries in the so-called ‘Wellbeing Alliance,’ which recognises the limitations of GDP as a metric of success. Members instead base policy around welfare in a broader sense, in the belief that this will also increase productivity.
- The country still faces significant problems, including political gridlock. But Costa Rica’s new President aims to address this issue through a spirit of cooperation.
LKI Take: Sri Lanka could follow Costa Rica’s example by focusing on metrics of economic success other than GDP. This could ensure, for example, that economic growth is not at the heavy cost of environmental degradation.
*Written by Malinda Meegoda and Barana Waidyatilake, and edited by Adam Collins. The opinions expressed in these Weekly Insights are the authors’ own and not the institutional views of LKI, and do not necessarily reflect the position of any other institution or individual with which the authors are affiliated.