IMF says it relies on Sri Lanka’s institutions – not its own investigations

In geo-politics and geo-economics we often discuss, debate and analyze many Traps such as Thucydides Trap, Middle-Income Trap, Debt Trap, De-coupling Trap, Resource Trap (more powerful nation would endeavor to extract critical natural endowments from a less developed nation to advance and fuel economy), Weaponization of Inter-dependence Trap, SME Trap, Education Trap, Poverty Trap, Status-Seeker Trap and Inequality Trap amongst others. These are concepts which could have menacing geo-economic and geo-political impingements, leading the less developed nation/s to be trapped at the same level of economic development or even retrogress development. Many of the developing nations as well as least developed nations have got entangled in the so-called “Image Trap”. In other words, historically, since the Egyptian or Chinese civilization, let alone the Roman Civilization, well over six millennia ago, no country has ever developed, economically or commercially, without changing, enhancing or “aggrandizing” its image nationally, regionally and globally. This particular “Image Trap” is mostly inherent and has to be addressed by the political leaders, corporates, academia and civic society, amongst others. Image Trap could be described as the manner in which neighboring countries, region and global community view and profile a particular nation and their impression, perception, grasp and standing of that country. How to break the Image Trap: In this context, it is imperative to accentuate that the political leaders, policy makers and corporates, amongst others, have a dominant and fundamental role to play in aggrandizing and boosting the image and profile of a given nation. When a given country advances its governance, internal security and safety, rule of law, macro and micro economy and infrastructure, connectivity, commercial advancement and tourism, external trade, competitiveness, socio-economic indicators, travel documents (passport), and overall standards of living of the populace in all provinces leading to higher GDP and GDP per capita. This, in turn, raises the integral image and perception of the country. It is vital to realize the fact that the rise of image and profile and economic expansion including human capital of a given country, do occur concurrently and in unison. In order to enlighten the complexity and seminal nature of Image Trap, the author would be selectively choosing India, Singapore and Japan since the author served as the Deputy Ambassador/Senior Diplomat and South Korea and Vietnam as the Ambassador. Re-branding of Perception with illustrations: With regard to India, when the author was a young student studying in Los Angeles, US in 1980s, people generally used to ask the typical question of where the author had come from. The author had the usual response that he hailed from Sri Lanka and the follow- up question was, where was Sri Lanka? The author used to say it was at the tip of India. Most often, one who broached the question would remark “India is a poor, poverty-stricken nation infested with sicknesses, starvation and misery and do they have food to eat and clothes to wear!” This was only about four decades ago, before India liberalized the economy in 1991 with “LPG Reforms”. Since then, less than three decades later, the remarks in North America and West would be, “It’s a country with exceptional potential, promise and economic opportunities and commercial vistas with some of the smartest people in the world, particularly in the sphere of IT”. Today, some of the largest global corporates are headed by Indian CEOs including Microsoft, Alphabet (Google), FedEx, IBM, Novartis, Palo Alto Networks, Barclays Bank, Adobe, Micron, You Tube, Chanel and the World Bank as well as the presence of eminent scientists, medical specialists and academia including both the former Dean and current Dean of Harvard Business School, Cornell, Booth School of Chicago, Georgetown and Kings College of London, amongst others. Today, Indian based IITs and IIMs academic institutions have become global iconic brands competing unequivocally with US based “Ivy Leagues”, as Harvard and Yale, since most of the Indian CEOs and academics were birthed from these institutions. The total market cap. of the equity/stock market of India is well over USD five trillion (USD 5,000 billion), and the sixth largest in the world, and in year 2002, it was hovering only around USD 100 billion. When Tata Steel acquired UK/Netherland based Corus Steel and Jaguar Land Rover, they changed Indian economy epoch-makingly. These are self-explanatory of the rise of India and change of Image. Transformation of Image by Japan and Singapore: In 1945, Japan was reduced to absolute economic desolation with the end of WWII but in 1968, Japan became the second largest economy in the world, in less than a generation. It could maintain this status for 42 years until China surpassed in 2010. It invested in manufacturing and in economic activity with pertinacious and unmatched dedication and loyalty by its populace and successive Governments, which the world would not have seen before. In 1965 when Singapore gained the independence from the British Raj, it’s GDP per capita was around USD 500, which was quite decent at that period. The country, woefully, lacked no natural endowments, any economically impactful industries or even land. It only had strategic location, human capital and a visionary leader, Lee Kuan Yew. Singapore focused on its strategic location and invited and wooed global players from the West and other developed nations. Whilst heavily invested in human capital, education, petro-chemicals and FDIs, Singapore focused resolutely on manufacturing and trade, thus boasting exports of nearly USD one trillion in 2025. The country, geographically, is only equivalent to the Urban area of city of Colombo or 1/90th the size of Sri Lanka. Today, it’s amongst the three wealthiest countries in the world in terms of GDP per capita, which is over USD 90,000 or higher than any of the G-7 nations and consistently has the strongest passport in the world. Geo-economic Statecraft of South Korea and Vietnam: South Korea and Vietnam share parallels as both were devastated by two brutal and “feral” military conflicts in 1950s and 1960s. South Korea was the poorest in Asia in 1960s whilst after the Vietnam War, Vietnam was also one of the poorest countries in the world in mid-1970s to 1980s. South Korea was fixated on manufacturing, trading globally, innovation, education, FDIs and most significantly extraordinarily clean Government, amongst others. South Korea recorded unparalleled growth and fostered Chaebols or top most corporates beginning in 1970s such as Samsung, SK Group, Hyundai, Lotte and LG, amongst others. Today, South Korea has two of the three “Trillion-dollar market cap.” corporates of Asia i.e. Samsung and SK Hynix, and in the same league as “Magnificent-7 Corporates”. The transformation and “transmogrification” of South Korea from a backward agriculture dependent and under-developed nation to one of the most innovative and advanced economies is often being defined as the “Miracle on Han River”. The ascendence of Vietnam during the last three decades was too due to attraction of FDIs and foreign corporates and marked increase of two-way trade, manufacturing, tourism, SMEs and services. In 1980, total exports of Vietnam were around USD 800 million similar to Sri Lanka in the same year and in 2025, the exports were USD 475 billion with bilateral trade much larger than GDP. Today, Vietnam is often described as “China plus One” or “Mecca for investments, trade, manufacturing and tourism”. Unexplored and Unexploited Potential and Vistas of Sri Lanka: All these countries have a common denominator for their economic advancement and to be able to breach the “Image Trap”. These countries, to varying degrees, had exceptional quantum of dedication, nationalism, fidelity, loyalty and national pride and identity. Further, they deliberately desisted from belittling or making disparaging statements or remarks of their respective countries except on specific issues. Primarily, they had “unconquerable and unyielding” attachment and pride for their country and did not engage in denouncing or excoriating the political leaders and policies but focused on long- term vision, image and development. In order to break the “Image Trap”, any country needs to have good governance, rule of law, controlled inflation and stable economy, investment on human resources (education), FDIs and exports, political and economic stability, zero or minimal degree of corruption and nepotism, and transparency, which would boost the image, profile and perception of the country. Today, Sri Lanka is well-poised and well-positioned to transform the image and profile of the country, as it endured nearly two decades ago as a war and terrorism-stricken unsafe nation, to a country with palpable promise, hopeful and encouraging future and economic development to be characterized as the “Miracle on Kelani River” in the foreseeable future. The Writer is a former career Ambassador, Professor of International Economics with specialization on Geo-politics and Strategic Negotiations and earned PhD from Indian Institute of Technology (IIT) Delhi as well as a Senior Fellow at Harvard. He could be reached on mendissaj24@gmail.com By Prof. A Saj U Mendis, PhD