ECONOMYNEXT – Sri Lanka has lost free trade which made the country a strategic trading hub from ancient times, but Singapore gave trade freedoms making it an example to follow, Prime Minister Ranil Wickremesinghe has said in Singapore.
Though Singapore had admired Sri Lanka (then Ceylon) under Prime Minister D S Senanayake (the first Prime Minister after British rule) Prime Minister Wickemesinghe had said the country then took away trade freedoms from citizens .
President J R Jayawardene had to follow Singapore’s example (Sri Lanka economy was closed until 1977), to go forward, Wickremesinghe was quoted as saying at a felicitation lunch in Singapore with Prime Minister Lee Hsien Loong.
Analysts however say Jayawardene’s reforms failed to bring substantial prosperity as he did not abolish or significantly reform the country’s central bank allowing it to print money and inflate the economy, triggering impoverishment and labour unrest.
Sri Lanka’s trade restrictions were imposed party due to frequent foreign currency shortages and balance of payments crises that came after a money printing central bank was created in 1951, replacing the earlier currency board, which allowed free capital mobility and a rock solid currency.
After a bout of money printing Sri Lanka is now going another balance of payments crisis and rising inflation.
Singapore however kept its currency board (later modified but without a policy rate so that the exchange rate can be targeted at will) giving monetary stability, capital mobility and depriving any predatory domestic producer his most potent Mercantilist argument – saving foreign exchange.
Sri Lanka and Singapore both occupied strategic locations in Asia, and the British Empire was unwilling to let go of both locations until the last moment, Wickremesinghe had said.
Sri Lanka has seen a rise in the political power of predatory domestic producers in recent years with higher import duty protection to exploit the poor the last regime which made fat ca business less competitive and unable to compete in global markets while workers also had to pay high prices for goods, reducing their living standards.
Immigrants from Sri Lanka had contributed to the country’s multi-cultural society, Prime Minister Lee had said.
Analysts say immigration was widespread under Indian and British colonization of South and South East Asia until European colonials brought the concept of citizenship, visa and passports, which was eagerly seized upon by nationalists after independence to block migration in many countries.
Singapore’s socialist – leaning People Action Party however discarded nationalism.
Several former British colonies countries including Sri Lanka and Malaysia ended up in nationalist hate generating riots and mass-killing emulating developments in Eastern Europe the break-up of the Austro-Hungarian Empire, which eventually ended up in Nazism analysts say.
Singapore (Singha pura or Lion City) was an outpost in Indianized South East Asia which became an important trading hub after coming under Seri Teri Buana, who was originally connected to the Hindu-Bhuddist Srivijaya maritime empire in Indonesia.
Singapore declined after his descendant Parameswara (Supreme King) who was by then also believed to be known as Iskandar Shah was driven out by Indonesia’s Majapahit rulers.
The fleeing Iskanda Shah who understood free trade established Malacca as a key trading hub displacing Singapore, around the time Islam began to spread in East Asia.
Malacca flourished as a commercial centre until the Portuguese arrived bringing Mercantilism to Asia and free trade declined. The latter stages of British rule however – after the end of the trading monopolies of the British East India Company – saw free trade returning.
The Portuguese official Tome Pires, who was sent to Malacca soon after its fall to Portuguese had this to say in (In Suma Oriental) about multi-cultural Malacca where traders from Sri Lanka were also present.
"Moors from Cairo, Mecca, Aden, Abyssinians, men of Kilwa, Malindi, Hormuz, Parsees, Rumes, Turks, Turkomens, Christian Armenians, Gujaratis, men of Chaul, Dabhol, Goa, of the Kingdom of Deccan, Malabars and Klings, merchants from Orissa, Ceylon, Bengal, Arakan, Pegu, Siamese, men of Kedah, Malays, men of Pahang, Patani, Cambodia, Champa, Cochin China, Chinese, Lequeos, men of Brunei, Lus;oes, men of Tamjompura, Laue, Banka, .Ling a (they have a thousand other islands), Moluccas, Banda, Bima, Timor, Madura, Java, Sunda, Palembang, J ambi, Tongkal, Indragiri, Kappatta, Menangkabau, Siak, Arc at, Aru, Bata, country of the Tomjano, Pase, Pedir, Maldives."
Pires counted 84 languages being spoken in Malacca. (Colombo/July19/2016)