Oct 31, 2010 (LBO)- Improved connectivity is an essential precondition for trade in goods and services, hopefully better governed once the Comprehensive Economic Partnership Agreement between India and Sri Lanka is completed and signed. The already large movements of people between the two countries will only grow when multimodal and lower-cost options are restored and enhanced, especially in the form of a land link across the Palk Strait and ferry services.

Sri Lanka currently serves as a hub for maritime goods transport and air-passenger transport in the southern sub-continental region, drawing on its geographical and economic advantages. The keys to their present relative success were decisions taken by different governments to remove counter-productive restrictions, establish effective regulatory mechanisms, and step back, allowing private actors to supply the services. More reforms on these lines are required to consolidate these successes and build upon them.

Policymakers on both sides of the Palk Strait should, as they did a few years ago in the Joint Study Group report on the Comprehensive Economic Partnership Agreement, seek to harness the efficiencies that would come from better utilization of Sri Lanka’s logis