ECONOMYNEXT – Sri Lanka’s foreign policy is firmly anchored in economic diplomacy, with a strong focus on trade, investment, tourism promotion, and innovation, Foreign Minister Vijitha Herath said.
Addressing the Chamber Of Lankan Entrepreneurs (COYLE) Diplomats’ evening on Thursday (05), the Minister emphasized that Sri Lanka’s diplomatic missions overseas are actively engaged in promoting exports among many other responsibilities.
“Sri Lanka’s foreign policy today is firmly anchored in economic diplomacy. Our missions overseas are actually engaged in promoting exports, attracting foreign indirect investments, supporting tourism, and facilitating technology and knowledge transfer,” he said while addressing the gathering.
“We see our diplomatic missions and the business community working hand in hand to unlock new opportunities and markets,” he said.
“Sri Lanka, a first compelling value proposition, strategically located at the crossroad of the major shipping routes, serves as a natural hub for trade, logistics, and connectivity in the Indian Ocean region.”
“Our skilled workforce, improving infrastructure, and expanding digital capabilities, position us well for partnerships for sectors such as manufacturing, renewable energy, IT sector, agriculture, tourism, and logistics.”
Historically, Sri Lanka’s foreign policy was rooted in Non-Alignment, a strategy designed to maintain neutrality and balance relations between global superpowers during the Cold War.
However, in the post-war era, this policy shifted toward a highly transactional “debt-fueled diplomacy” that increasingly leaned toward a single regional power, China.
Successive governments actively courted large-scale Chinese investments for massive infrastructure projects, such as the Hambantota Port and Colombo Port City, which often lacked economic feasibility.
This shift significantly strained Sri Lanka’s traditional ties with India and Western nations, who viewed the growing Chinese footprint through a lens of maritime security and geopolitical rivalry.
Instead of acting as a neutral bridge in the Indian Ocean, Sri Lanka became a theater for “Great Power Competition,” leaving the nation diplomatically isolated and vulnerable when it faced its worst economic crisis in 2022.
The failure of Sri Lanka’s foreign policy is also attributed to its persistent inconsistency and personalization by political leaders.
Rather than adhering to a long-term, institutionalized national strategy, foreign relations were often dictated by the ideological whims or domestic survival needs of whichever family or party held power.
For instance, some administrations adopted a confrontational stance toward the West and the United Nations regarding human rights and post-war accountability, which resulted in the loss of critical trade concessions like the EU’s GSP Plus.
Lack of a professionalized, stable foreign policy meant that Sri Lanka failed to leverage its strategic location to integrate into global supply chains, ultimately leaving it without a strong “diplomatic safety net” during times of national emergency.
Foreign Minister Herath said Sri Lanka remains committed to reforms that enhance transparency, ease of doing business, and investor confidence in the current foreign policy.
“The government continues to engage closely with international partners and multilateral institutions to ensure macroeconomic stability and long term resilience.” (Colombo/February 06/2026)