The Washington Diplomat / March 2004
By Larry Luxner
Sri Lanka's new ambassador to the United States is an investment banker who owns a condo in Florida and can talk for hours about Latin American loan portfolios.
He made lots of Republican friends during the many years he collaborated with the conservative Heritage Foundation. Yet the savvy diplomat, who attended Indiana University on a swimming scholarship, also dined with Fidel Castro in Havana back in 1979, when Sri Lanka led the Non-Aligned Movement.
Devinda R. Subasinghe, 50, is full of surprises.
And the biggest surprise is that Sri Lanka — a nation embroiled in civil war for the last 20 years — intends to negotiate a free-trade agreement with Washington.
"The United States is looking for a partner on the subcontinent, and we are moving on a path toward an FTA" with the U.S. government, said Subasinghe. He noted that Sri Lanka, the only country in the world that has an FTA with India, boasts "a highly skilled work force and state-of-the-art labor laws."
Subasinghe spoke with The Washington Diplomat for an hour last month, accompanied during the interview by his Italian-born wife Helga Wurzer and their 23-year-old son, Oliver. The diplomat and his wife met while attending graduate school at Johns Hopkins University. The family settled in Pinellas County, Fla., since that's where Subasinghe's in-laws lived, and he ended up as head of international investment banking at Raymond James Financial in St. Petersburg.
He had just finalized a takeover deal with two Costa Rican banks when Sri Lanka's new prime minister, Ranil Wickremasinghe, asked him to become ambassador.
"Having lived in this country for many years, I have a relative advantage in being able to understand Washington and present the Sri Lankan case," he said. "The prime minister himself has been visiting Washington since 1984, so he understands how the U.S. works. My primary objective has been to broaden and deepen that relationship."
Since presenting his credentials to President Bush on Feb. 26, 2003, Subasinghe has spent much of his time trying to garner U.S. support for an end to the bloodshed that has killed an estimated 60,000 Sri Lankans over the last 20 years and forced the country's once-prosperous economy to stagnate.
Located just off the Indian coast, Sri Lanka — formerly known as Ceylon — is a West Virginia-sized country of 19 million, with a complicated ethnic and religious mix of Buddhists, Hindus, Muslims, Tamils, Christians, Malays and other minorities thrown in.
Ruled for hundreds of years by the Portuguese, Dutch and finally the British, Sri Lanka won its independence in 1948, a year after India, and is today a sovereign republic, with membership in the British Commonwealth.
A brass plaque outside the Sri Lankan Embassy at 2418 Wyoming Avenue proudly announces the name of the country, "Democratic Socialist Republic of Sri Lanka," in three alphabets.
But the country is hardly peaceful. Two years ago, the rebel Tamil Tigers agreed to temporarily end their violent campaign for a separate homeland in the northeastern part of the island for Sri Lanka's 3.2 million ethnic Tamils. That came only after a series of well-publicized attacks aimed at destabilizing the once-tranquil island.
These included a 1996 incident in which a suicide bomber used a truck packed with explosives to blow up the Central Bank in Colombo, killing 91 people and wounding 1,400, and a July 2001 suicide attack against the main air base and Sri Lanka's only international airport. That attack killed 12 people and destroyed half the fleet of Sri Lankan Airlines.
"It did put a huge dent in passenger traffic," said Subasinghe, noting that tourism had become the country's No. 3 source of foreign exchange after apparel exports and remittances from Sri Lankan workers overseas. "But we've had a 24-month ceasefire, and that's holding. Tourism hit record levels last year. Over half a million people visited, mainly from Europe but also India and China."
The ambassador said that Washington has been supporting the peace process, both from a diplomatic and military perspective.
"India is also playing a very active role in moving the peace process forward, not as a player at the table, but informally," he said. "The Norwegians are facilitating the peace negotiations, and Japan, the U.S. and the European Union are co-chairing the group of donors contributing to the reconstruction and rehabilitation of the country."
Subasinghe said the White House "is doing a multitude of things" to help Sri Lanka recover from two decades of internal strife.
"The time and energy that the Bush administration is investing in Sri Lanka is very significant," he said. "Our prime minister visited President Bush in July 2002. As a result, the U.S. government undertook an interagency review of the American-Sri Lankan relationship. That led to a series of recommendations on how to move the relationship forward, especially with regard to defense and security."
Subasinghe said the terrorist attacks of Sept. 11 brought the Tamil Tigers to the bargaining table.
"Their sources of funding from the Tamil diaspora dried up after 9/11. There was also an element of fatigue after 20 years of fighting and 60,000 killed," he said. "They had been asking for a separate state, but they've now agreed that they would settle for a federal system of government."
Meanwhile, Sri Lanka, a predominantly Buddhist country, is moving economically closer to its huge neighbor, India, and cementing ties with Israel — despite the fact that 5% of its population profess Islam, and that Sri Lanka has virtually no Jews to speak of.
"Sri Lanka and Israel broke diplomatic relations in the 1970s, and we re-established them in the '80s, when an Israeli Interests Section opened at the U.S. Embassy in Colombo," said Subasinghe. "Those ties were suspended again in the '90s, and full relations were established in 1999. Israel has been a significant supplier of expertise and equipment in fighting the Tigers, as has been Pakistan and China."
The country is also trying to open up its economy to encourage foreign investment — which he says makes Sri Lanka appealing to both Democrats and Republicans.
"We don't have significant tariff or non-tariff barriers," he said. "The highest tariff we have is 25%. At the same time, our foreign-exchange system has been liberalized. Because the government had a monopoly on the telecom system, we missed that first wave of telecom-driven services, but with the current privatization, we have just attracted HSBC, which is moving two of its call centers from the U.K. to Sri Lanka. Secondly, there's a major effort underway with the World Bank to take the Internet nationwide and enable Internet access through kiosks throughout the country."
Despite the fighting, Sri Lanka boasts a 92% literacy rate and an annual per-capita GDP of $900, the highest in South Asia. The government also provides health care as well as free education from kindergarten through university.
One thing that would definitely help the Sri Lankan economy, he says, is an FTA with the United States, which already buys over $2 billion worth of garments and apparel from his country.
Currently, some 100 U.S. companies have invested around $500 million in Sri Lankan factories, churning out everything from rubber latex gloves to Calvin Klein blue-jeans. Other large investments involve the assembly of ceramic tiles, jewelry and computer components.
"The U.S. retail sector is looking to diversify its sources of production, and we source some fabric from the United States, but not a significant amount," he said. "We're still able to compete with Mexico on cost and quantity, but we'd be able to compete a lot better with an FTA. The quota system goes away at the end of this year, which means that countries like China can compete on volume and price. We cannot compete on volume, so we need that extra help."
Subasinghe said the FTA would benefit Sri Lanka not only in apparel but in other sectors like gemstones, jewelry, rubber products and tea.
In addition, said Subasinghe, the Sri Lankan government is doing its best to encourage tourism development, though that's easier said than done when people tend to associate his country with suicide bombings and ethnic violence.
Things to see in Sri Lanka include an elephant orphanage about one and a half hours outside Colombo. The country also boasts numerous ecotourism attractions, as well as beautiful beaches and ancient Buddhist shrines.
"We have eliminated visa requirements for Indians traveling to Sri Lanka. That's led to lots of middle-class Indians traveling there for shopping," he said, noting that Sri Lanka is served by 60 flights a week from India alone.
The American tourist market is less important, mainly because the United States is so far away. Despite the fact that Americans don't need visas to enter Sri Lanka, fewer than 10,000 U.S. citizens actually visited the country in 2003, a number not expected to rise much in 2004.
At present, no carriers serve Sri Lanka directly. When Subasinghe goes home, he flies from Washington to London; from there, it's a 10-hour flight to Colombo on Sri Lankan Airlines.
"We're also focusing on high net worth specialty tourism," he added. "In that regard, Geographic Expeditions has undertaken the promotion of the Sri Lankan market to that segment."