Hub Status

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2017-11-24

President Mahinda Rajapaksa's Central Bank of Sri Lanka Governor Ajith Nivard Cabraal, after the end of Sri Lanka's 26-year-old Tamil terrorist war on 18 May2009, used to talk of positioning Sri Lanka as a five hub nation for global trade and commerce.

Those were aviation, maritime, energy, knowledge and trading hubs respectively. Later, Cabraal added a sixth hub, tourism.

But none of those hub statuses materialized despite the 5½ years of peace since 18 May 2009 to 8 January 2015 that the country enjoyed in the last leg of the Rajapaksa regime before he was booted out of power.

The only hub status achieved, which took place before the Rajapaksa-Cabraal 'cabal's' pronouncements was the maritime hub.
That took place after President J.R. Jayewardene was elected to power in 1977. He transformed the Colombo Port from being an import-export port catering to the trading needs of the country, to a transshipment hub in the Indian Sub Continent (South Asia), with Japanese aid.

And, on Rajapaksa's public (commercial) investment on the Hambantota Port, less said the better!

Meanwhile, tourism, post war, grew. But there is a question mark as to whether it grew to its potential, post peace ushered in by Rajapaksa, in his last leg as the country's President.

Tourism is Sri Lanka's third largest foreign exchange earner, growing from a lowly ninth position at the eve of the war end in 2008, to its current, elevated status, being only behind remittances and garments.

Tourism numbers, which, at the eve of the war end, 2008 were 437,475, by the end of the Rajapaksa era, end 2014, has grown to 1,527,153, an average growth of 181,613 over a six year horizon.

Similarly, tourism earnings in the review period grew from a lowly US$ 342 million end 2008, to $1,527,153 by end 2014, an annual growth of $596.35 million.

The present Yahapalana Government which has been in power since 8 January, 2015, has, in the two-year period from end 2014 to end 2016, grown both tourism numbers and earnings at a faster pace than the Rajapaksa-Cabraal 'cabal' in their last six years in power, post peace.

Tourism numbers end 2014 was 1,527,153. It had, by last year end grown to 2,050,832; an annual average growth rate of 261,840,44.17 per cent (80,227) faster than the previous regime's annual average of 181,613.

Likewise, tourism earnings, from end 2014 to end 2016 grew from $ 2,206.40 million to $ 3,399.1 million, a growth of $ 1,192.7 million in a span of two years or an annual average growth of $ 596.35 million. This compares to the annual average growth over a six year horizon from end 2008 to end 2014, of $ 310.73 million, a 91.92% ($285.62 million) annual average increase over the Rajapaksa 'tourism hub aspiration' era.

Rajapaksa, by blocking foreign travel north of Vavuniya without Defence Ministry approval even during peace, seemingly didn't know that such a stance didn't help meeting his aspirations of making Sri Lanka a tourism hub, and, asa complementary feature, as an aviation hub as well.

If anything that the Yahapalana Government achieved in its under three years of governance to date is the strengthening of the structures of democracy, shattered during the Rajapaksa regime.

Yesterday, this newspaper carried an article of a Japanese disaster relief organization, with offices in seven countries excluding Japan and including Sri Lanka, which has plans to make Sri Lanka its hub for the South Asian and Middle-Eastern regions.

What is known is that this relief organization, Asia Pacific Alliance for Disaster Management (APADM) spent $ 30,000 (Rs 4.5 million) on drought relief in Sri Lanka targeting 1,500 families in August 2014, according to latest reports. What is unknown is the extent of aid it expended due to the subsequent natural disaster that followed.

Rs 4.5 million may be a small sum and APADM may be an insignificant organization. But, it has, more often than not, the backing of the Japanese Government, a probable signal to the Japanese corporate sector that Sri Lanka is safe to do business not only by setting-up shop within, but by also being a launching pad to do business, without.

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