After having hit by a tough period of economic melt down, Sri Lanka is inching back to normalcy. With the help of International Monetary Fund and also from its neighbours like India the economy of island nation is showing signs of recovery. Delegation of a select group of journalists from Indian women Press Corps visited Sri Lanka in early July before President Ranil Wickremesinghe’s visit to India in July end. Foreign Minister of Sri Lanka M.U.M Ali Sabry gave an insight of the government’s point of view on a host of issues during his interaction with the delegation of women journalists. Excerpts…..
Delegation: Sri Lanka has been through tough times lately. The economic meltdown almost reduced the nation to bankruptcy. What measures have you taken for such a situation not to rise again!
Foreign Minister: We are committed not to repeat the mistake we did in the past on economic front and are learning lessons from other countries including India. One area is how to improve revenue in terms of taxation to be able to run the place. We are seeing how to reduce expenses by putting money in performance based places. Second is to decouple business from government. Government can just be a regulator & a platform provider for regular trading without abuse. Third, reform of State owned Enterprises. Old ones have been making big losses. We need to privatize some of them & others to come in with private equity. This is for transparency, accountability & professionalism. Eg Sri Lankan airlines had earlier been in partnership with Emirates airline with a 10 yr MoU from 1998-2008. During that period we made profits but unfortunately it wasn’t renewed as a result of which the accumulated losses are now more than $1.5 US dollars. We don’t want to repeat that.
We will not give subsidies on popular policies. They will only be to the vulnerable people. We have a Social Protection Net and World Bank is supporting us. We are working on a platform for digitization & direct money transfer like the Indian government has done.
For the first time we have introduced Cost Reflecting Pricing for electricity, water, fuel, gas, & food so that the state does not make losses which in turn forces Central Banks to print more money that in turn adds to inflation as the value of money comes down. So we have adopted a 3 pronged strategy to get out of the crisis. Stabilization, Recovery & Growth.
D: What are the footprints of China in terms of CPEC, debt restructuring, infra projects and India’s security concerns.
FM: China has 99 yrs lease on Hambantota port, a commercial agreement. For anything other than commercial they need to get our permission. China has funded most of our Highways, we had to pay them back. They have invested in one terminal. Japanese & India too have invested in other places.
In fact since last 20 yrs investment has come only from China, about a trillion dollar. After we came out of war in 2009, we wanted investment to come from somewhere, it was basically the Chinese who took the lead but it is purely a commercial relationship, not military or defense. We are clear on it. We don’t want any tension in our area neither will we contribute to it. We also take precaution that under the pretext of commercial investment, military encroachment into SL is not allowed by anyone. But for security cooperation in order to prevent smuggling, drug trafficking, piracy we will be first to cooperate but not to get into alliance & tied down to somebody’s agenda.
D: What are your asks from the Government of India if anything more and how do you think neighboring countries can help Sri Lanka.
FM: We are thankful to India and do not want to ask for any giveaways or loans but we want their support for the restructuring of the loans & its payment in a manner possible which will not derail SLs recovery so that we can recover & pay them. India has been very flexible in repayment also. I had asked Dr Jaishankar when he came, to look at SL as an investment destination, more P2P contact & more tourism.
FDI is very imp as we need capital to start new projects which will bring growth. Then P2P contact has to be strengthened, connectivity through air, sea, ferry, cruise, we are looking at expanding every area of that.
We are looking at privatizing Sri Lankan airlines. So it’s a huge opportunity for Indian investors. Like TATA’s have done with Air India. 17 cities of SL are covered by Sri Lanka airlines. Some big Indian companies have come in particularly on Colombo port. Big project are going to come on wind power.
India to South East Asia to Japan, China in their own way did a lot together. But I have to put this on record that the biggest contribution came from India.
D: Your views on Global South that PM Modi is talking about.
FM: Global North has been dominating the world unilaterally for a long time. We are now going towards a multi polar world with many players. In the foreseeable future there will be 4-5 big player & India is one of them. That will create balance between the global south & north.
The whole world is in consensus that 70% growth in the next 2-5 decades will come from Asia Pacific lead by China & India. A balance between Global North & South can only be brought by India China working together.
We see India rising & India rising means the neighbors will rise. In the next 20-30 yrs I think economic growth will come from our region led by India.
D: How do you plan to boost connectivity & people to people ties.
FM: SL is welcoming tourists. Indian airlines which were flying just thrice a week, will fly everyday to Jaffna from July 7, 2023. Some Indian flights will also fly to Colombo.
Ferry service will soon begin. A superluxury cruise (Candola) came to Hambantota, went to Trinco & to Jaffna. I feel P2P contact through connectivity & cruise will make a big difference particularly with the southern part of India. We invite people from India particularly South to come & invest in the north & East & uplift the standard of our brothers which has suffered due to 20-30 yrs of conflict. It has been 200 yrs of the existence of Indian community who work in the Tea sector driving SL’s economy majorly.
D: Your comments on debt trap diplomacy.
FM: I don’t agree with that. That’s a western narrative to scuttle China’s investment. For us Chinese investment has been helpful.
D: Will elections be held next year?
FM: Next year before November we have to have elections even as per the constitution