Hard Road For Peace, Politics, Property
A lot of things can happen in five short years. As I'm writing this I can't help but Google my way back in time, and a quick search tells me this was a defining Twitter moment in 2009, with the miracle landing of the US Airways flight on the Hudson River. Who said all those flight safety videos about water approaches were all nonsense? Looking back is always easier than looking forward – will we still be Tweeting in another five years? Let's leave that on the table for the moment and look to Sri Lanka, where in 2009 the 25-yearlong civil war came to a close and the country adopted a broader free market economic drive.
Over the past few years I've Hard road for peace, politics, property worked on a number of hotel and property consulting assignments in the country and a recent trip just last month was an excellent time to catch up on the wired, the tired and the expired. One thing that hasn't changed, unfortunately, is that most of the arriving and departing flights from Asia's major hubs continue to be late night or early morning. One exception is Sri Lankan Airways, but let's just say that may not be the best choice for travel given regular flight delays, frightfully bad in-flight entertainment and no share agreement with Thai Airways – so the transit in Bangkok means exiting immigration and checking in all over again.
Still, this is a minor issue and one of the biggest game changers has to be the toll road from the airport to the city. And for those heading south to Galle and beyond, another new toll road from the city to the south makes what was once a five-hour-plus ordeal, something that can be done in less than two hours.
In the works this year is a connection that will see the airport and Galle toll roads connect and the southern road extended to Matara further along the country's gold coast resort area. Up in the air things are also changing, previously the country relied on a single international gateway in Colombo. The debut last year of a second gateway in Mattala (Hambantota), at the southern end of the island, has already started to change the dynamics of tourism and development in the country.
Despite Hambantota being the home of the current president, the infrastructure improvement progress has been slow, albeit steady. On the bright side, the deep sea port and international airport are up and running, though the continued delays in the Shangri-La hotel project have had a negative effect on confidence. One of the main movers in partnering on mega projects has been the Chinese who have embraced the country.
Two key issues that have hampered Sri Lanka's fast track to success are intertwined in the economic and political spheres. After years of war the country's enterprises are starved for capital and the cost of debt is double digit.
Hyper inflation and pressure on the country's currency have created an often volatile environment. Second, is the Tamil issue and international pressure over alleged human rights violations. This hit a pinnacle last year during a Commonwealth event when British Prime Minister David Cameron visited the northern part of the country.
Lately, the United States has also applied pressure on investigations into past events, though frankly speaking, after their recent history of drone attacks killing civilians and the widespread spying on private citizens, it has more than a whiff of the pot calling the kettle black.
From a real estate perspective, the southern coast has a rich history of seafront villas with many of the owners coming from Hong Kong, Singapore and Europe. The sector saw a decided downturn for much of last year, largely driven by uncertainty over a revision to land ownership laws, which look to be reset this year back to a long term leasehold structure for foreigners. And of course the political fallout from the international set has also had a negative affect.
But the world is changing and in a landscape where the East is rapidly taking over the starring role from the West, the trend setters in property are coming from China, Singapore, and even the emerging gaming sector is playing a role, with MELCO Crown doing a deal for a mega project in Colombo.
We live in a world which has suddenly gone back into crisis mode, similar to that of the 1960s, where social and political ills are now taking center stage in nearly every market. Nonetheless, my view of Sri Lanka remains optimistic given its high brand USPs and unique culture. There are vast and unlimited possibilities – the country has the same potential as Myanmar, another nearby rising star. Maybe, just maybe, it's time to give peace a chance and let the country get back to business.