The anticipated victory of the Labour Party in the forthcoming general election in the United Kingdom presents a pivotal opportunity for political activists campaigning for a fairer and more sustainable Sri Lanka.
This potential shift in power offers a chance to press for significant changes in the global economic order. For Sri Lanka to overcome its external debt crisis and economic difficulties, Labour’s commitment to strengthening and reforming multilateral institutions, tackling corruption and illicit money flows, and supporting the recovery of stolen assets is crucial.
Over the past 14 years, the Conservative government has shown little favour towards Sri Lanka. When Sri Lanka was struggling to meet its debt obligations and was in its greatest need, the Conservative government offered little assistance, choosing instead to look away.
Contributions from the Paris Club have been meagre and came with unfavourable terms. Additionally, Sri Lanka has not been offered a reduction to its overall debt stock (haircut) during debt restructuring negotiations, which has hindered its path to sustainable recovery.
The current UK government’s liberal financial policies and light-touch regulation have created an environment that encourages and attracts illicit financial flows to the City of London and its crown dependencies.
These policies benefit the UK economy while depriving the Sri Lankan economy of much-needed foreign exchange. This situation underscores the need for a more equitable global economic system, one that the Labour Party should address through genuine reforms.
Trade relations between the UK and Sri Lanka have remained static under the Conservative government.1 No significant direct investments from UK companies have been made, and the UK’s imports of Sri Lankan goods have decreased.
This decline highlights the absence of a post-Brexit trade deal that could have helped Sri Lanka access the UK market. The stagnation in trade relations has contributed to the economic challenges faced by Sri Lanka, emphasising the importance of fostering stronger and more beneficial trade partnerships.2
Until very recently, the UK Foreign Office had issued warnings about various risks in Sri Lanka, including shortages of essential resources like food and fuel, frequent power cuts, and potential political unrest. These warnings were based on conditions dating back to 2022, which led to a campaign group arguing that these outdated advisories were unfairly undermining the travel industry.
Moreover, the UK’s distorted labour market is contributing to a brain drain from Sri Lanka.
The Conservative government’s policies to attract workers to the care sector have opened avenues for low-paid Sri Lankan workers, exposing them to exploitation by employers.
These policies, while addressing labour shortages in the UK, do little to support the well-being and rights of immigrant workers, further perpetuating the cycle of economic injustice.
Encouraged by the government, the UK has become increasingly less welcoming to immigrants. Punitive visa entry requirements deter Sri Lankans from traveling to the UK for business or to visit family and friends. This unwelcoming environment hampers cultural and economic exchange, adding another layer of difficulty for Sri Lankans looking to engage with the UK.
Against this backdrop, the Labour Party’s manifesto raises the question of whether it offers any hope for Sri Lanka or its citizens. By advocating for a fairer and more equitable global economic order, the Labour Party could create opportunities for countries like Sri Lanka to thrive.
Excerpts from the Labour Party manifesto
The Labour Party’s manifesto provides some insight into what can be expected from the next UK government3. Here are some key excerpts:
International Role and National Interest: “With Labour, Britain will once again be strong on the world stage, confident in the pursuit of our national interest, and progressive but realistic about the challenges we face. We will reconnect with allies and forge new partnerships to deliver security and prosperity at home and abroad.”
