Sri Lankan foreign minister Mangala Samaraweera made it clear. Sri Lanka wants to build better relations and economic bonds with the US and attract FDI. “We elected our new president by ballot, not bullet,” he said during a roadshow to Washington, DC, in February, which included a meeting with US secretary of state John Kerry. “To quote president Obama, Sri Lanka is a symbol of hope for those who support democracy around the world.”

While relations between the two countries have been strained over the past several years, in large part due to Sri Lanka’s human rights record and civil unrest, Mr Samaraweera stressed: “We want to broaden and strengthen our ties.”


Not only is the US the single largest export market for Sri Lanka at 33%, the US is Sri Lanka’s second largest foreign direct investor behind China. “Seventy American companies are based in different parts of Sri Lanka,” said Mr Samaraweera. 

A new broom

Currently, Sri Lanka is going through a democratic revival, as demonstrated by elections in January that put in place a new government and president. Consequently, the government has an ambitious 100-day programme described as including “far-reaching democratic reforms and constitutional amendments”. This includes “engaging with the world swiftly and promptly, and opening up greater accountability and possibility for the preservation of human rights, fighting corruption and putting together a government that will speak for and to the people”. 

In addition, the new government is making efforts to wean its reliance away from Chinese funding and is re-examining key projects in which China plans to invest, such as the $1.5bn Colombo Port City project. Chinese investors have also built a seaport and an airport in Sri Lanka’s south. 

Sri Lanka enjoys a strategic location for logistics. Located midway in the Indian Ocean on one of the world's busiest international shipping lanes, the country is already a key transit point for cargo.

“Many of those projects do not follow proper procedures,” said Mr Samaraweera. “In fact, the Port City project did not go through the proper environment assessments.” Now such projects will be reviewed. “But the port projects are not under review because they are Chinese,” he added.

Mr Samaraweera emphasised that Sri Lanka needs more than aid and high-interest loans from China. “We welcome FDI and I hope that now Sri Lanka is creating the environment conducive for investors, more will come.”  

While the new Sri Lankan government is still getting a handle on what it will offer in terms of incentives, Mr Samaraweera stressed that what held FDI back under the last government was the world’s view that Sri Lanka was an emerging dictatorship. “The country cultivated oppression and suppression of the media,” he said.

Today, Mr Samaraweera maintains that the first step for attracting FDI is ensuring that Sri Lanka’s rule of law and democratic fundamentals are re-established. “Beyond that, there will also be many incentives,” he says.