Sri Lanka has faced unprecedented crises in recent years, beginning in 2019 with the Easter Sunday bombings and continuing through the pandemic, the aragalaya and economic bankruptcy, all of which have led to immense suffering for the people and untold harm to the domestic economy.
However, the Italian Ambassador to Sri Lanka and the Maldives Damiano Francovigh remains optimistic.
On a recent LMDtv interview, he explained that “when you have big challenges, you can also get big opportunities.”
“Sri Lanka is in the middle of the Indo-Pacific region, which has been the driver of global growth over the last 20 years – most of the goods that are traded every year pass next to the shores of Sri Lanka,” he stated.
The ambassador explained that Sri Lanka has commenced work on new policies that will help the nation capitalise on its geographic advantage and open its economy to connect local industries with global value chains.
Francovigh also noted the prospects stemming from post-pandemic trends like ‘friendshoring’ and reshoring, which will provide “a lot of opportunities for Sri Lanka to strengthen economic ties and relationships with some of the most developed countries in the world.”
In the context of bilateral relations, Sri Lanka and Italy have enjoyed historic ties for centuries – and they have “a very strong and friendly relationship.”
He highlighted two main assets vis-à-vis the Sri Lanka-Italy relationship: the Italian investment community based in Sri Lanka; and the Sri Lankan community living in Italy who through their work, contribute to the Italian economy’s growth while boosting the Sri Lankan economy.
“These are the two assets we have in common; and starting with these, we can build more and more initiatives together,” he assured. The Italian ambassador urged Sri Lanka to consider opening its economy by “implementing laws to level the playing field between local and foreign investors, and private and public entities, to make the circulation of capital easier.”
Francovigh added that such laws would encourage more foreign investors – including those from Italy.
Tourism between the two countries is also blooming, fuelled by improvements in air connectivity.
“Currently, we have a higher number of tourists coming to Sri Lanka after a few difficult years. In the first two months of 2024, the number of Italians coming here to discover this magnificent island more than doubled, which is a very good sign,” he observed.
And he noted that “the potential is much higher,” and market conditions and actions of industry players – including airlines – will help reach it.
The ambassador also shared his views on the brain drain: “When you have a number of workers going to foreign [countries], it can be detrimental to growth because you’re losing one of the most important assets of the economy, which is manpower.”
However, shedding a positive light on the situation, he pointed out that the migration of unskilled workers is good for Sri Lanka. The ambassador explained: “This will help balance the employment market because you’ll have less unemployment, given that there will be fewer people looking for jobs.”
“On the other hand, people working abroad – through their remittances – will help the local economy,” he added.
Francovigh shared a case study of worker migration from the Philippines: “They had a drain of nurses going abroad for work and then came what’s called the ‘emulation effect’ – seeing that so many could find good jobs abroad, there was a higher number [of local nurses] willing to invest in their education to find better employment opportunities.”
“So what happened in the end is that the drain of nurses led to a higher number of graduated nurses in the Philippines,” he observed.
And the Italian ambassador summed up: “It is true [brain drain] has negative effects that might at the end of the day not be as negative as one might think.”