By Dr. Sarath Obeysekera

Sri Lanka today stands at a historic crossroads. Economic pressures, limited foreign investment, youth unemployment, and slow industrial growth require a serious reassessment of our development strategy. Amid ongoing political debate, China’s experience offers lessons that merit objective study rather than emotional interpretation.

China has undergone a major economic transformation over recent decades. Following a period of internal upheaval, including the widely discussed 1989 Tiananmen Square events, the country continued with broad economic reforms, industrial expansion, infrastructure development, and technological advancement. It has since become the world’s second-largest economy and a leading global manufacturing and innovation hub.(China Daily)

This transformation has been driven by a combination of long-term national planning, market-oriented reforms, sustained investment in education and engineering capacity, and strong emphasis on institutional coordination and workforce discipline. 

Continuous development of transport, energy, and digital infrastructure, along with integration into global trade and technology networks, has further strengthened its industrial base. The effectiveness of these factors, however, depends on each country’s governance systems, institutional strength, and socio-economic conditions.

China has also expanded its global economic footprint through overseas investment, particularly under the Belt and Road Initiative (BRI). In several African countries, Chinese firms have financed and built highways, railways, ports, power stations, and industrial zones. 

These projects are viewed differently by stakeholders: some emphasize improved infrastructure and connectivity, while others highlight concerns over debt sustainability, transparency, environmental impact, and geopolitical influence. Outcomes vary widely depending on project design, host-country negotiation capacity, and financing structures. For Sri Lanka, this reinforces the need for transparent agreements, robust feasibility studies, and careful assessment of long-term fiscal and economic risks in large infrastructure partnerships.

Sri Lanka has also benefited from Chinese-supported infrastructure, including ports, highways, airports, and public facilities. These investments have improved connectivity and expanded national infrastructure capacity.

 The key policy challenge now is to ensure these assets generate sustainable employment, export growth, and industrial diversification, while maintaining fiscal discipline and long-term economic resilience.

At the same time, India remains one of Sri Lanka’s closest neighbours and a key economic and strategic partner. A resilient development strategy requires balanced and constructive engagement with all major partners, including China, India, and others. Rather than treating international relations as a binary choice, diversified partnerships are essential for safeguarding economic stability and national interest.

Globally, competitiveness is increasingly defined by productivity, technology, and innovation rather than traditional measures of power. Countries now compete through manufacturing capability, logistics systems, digital infrastructure, artificial intelligence, and industrial strength. Sri Lanka therefore faces the challenge of shifting from a consumption- and service-heavy economy toward higher-value production and export-oriented growth.

Priority areas for future development include advanced manufacturing and heavy industry, offshore engineering and marine services, shipbuilding and repair, energy and petroleum support industries, integration of artificial intelligence into industrial systems, expansion of vocational and technical education, and the development of industrial zones linked to ports and logistics networks.

International experience shows that countries such as Germany, Japan, Singapore, South Korea, and China have achieved sustained economic progress through industrial policy, investment in human capital, and institutional efficiency. While each country’s historical and political context is unique, comparative studies consistently highlight the importance of long-term planning, education, infrastructure development, and governance capacity. Policy transfer, however, must be selective and adapted to local conditions, as strategies successful in one setting may not produce identical outcomes elsewhere. Sri Lanka must therefore align external lessons with its own democratic and legal framework.

Sri Lanka’s most valuable resource is its human capital. Beyond its strategic location in the Indian Ocean, future competitiveness will depend on the skills, productivity, and innovation capacity of its workforce. Strengthening education, technical training, and industry linkages will be essential to moving into higher-value sectors such as manufacturing, marine services, and technology-driven industries.

Sustained progress will require consistent focus on productivity, institutional efficiency, and long-term policy continuity, supported by constructive political dialogue. In the twenty-first century, economic success is increasingly determined by the ability to produce, innovate, and export rather than merely consume.

Sri Lanka still has the opportunity to participate meaningfully in this global transformation. The central challenge is to convert that opportunity into consistent policy action and measurable economic outcomes over time.

Regards

Dr Sarath Obeysekera

https://www.chinadaily.com.cn/a/202607/26/WS6a661466a310986e2b467565