Sri Lanka has sought trilateral cooperation with India and Japan in the renewable energy, petroleum, telecoms, and port sectors to hasten its economic recovery, the Sri Lankan high commissioner to India said on Monday.
“President Ranil Wickremesinghe discussed trilateral cooperation with India and Japan during his visit to Tokyo,” High Commissioner Milinda Moragoda said in an interview with The Times of India.
He was referring to Wickremesinghe’s visit to Tokyo on Sept. 28, during which he attended the funeral of Japan’s former Prime Minister Shinzo Abe and discussed debt restructuring with Prime Minister Fumio Kishida.
Sri Lanka is also in talks with Israel and the United Arab Emirates for trilateral cooperation with India. Moragoda believes that India’s ties could help Sri Lanka achieve sustainable economic recovery.
“Sustainable recovery is important and we would like to look at ways we can integrate with the Indian economy. Had we integrated with the Indian economy earlier, we would have grown very, very fast,” he said.
Sri Lanka had $10 billion in bilateral debt as of August, of which 44 percent is owed to China, according to Sri Lanka’s finance ministry (pdf). Japan holds 32 percent of Sri Lanka’s debt, while India holds another 10 percent.
The rivalry between China and India appears to complicate matters for Sri Lanka, which leased its Hambantota port to China for 99 years in 2017 to convert its Chinese loan into equity. India has been concerned that the port will be used as a military base.
Earlier in August, Sri Lanka allowed a Chinese research vessel—described as a “spy ship” by India’s media—to dock at the Hambantota port for replenishment despite India’s security objections.
Moragoda said that Sri Lanka and India had discussed mechanisms to ensure that the port would not be used by a foreign country in any way detrimental to India’s interests, which is in line with their bilateral agreement.
“Our security concerns are totally in line. The basic principle is that we believe that a security threat to India is also a security threat to us, and we assume India also thinks the same,” he added.
Moragoda denied that the India–China rivalry had an impact on Sri Lanka’s debt restructuring talks with creditors, which are required for Sri Lanka to obtain an International Monetary Fund (IMF) bailout package.
“I don’t think it [the India–China rivalry] has affected the talks but it’s a fact that politics in our region has entered a dangerous phase. There’s no question that geopolitics has a bearing on every aspect of what we do,” he said.
Wickremesinghe said Sunday that Sri Lanka had initiated debt restructuring talks with China, India, and Japan. The country reached an IMF staff-level agreement on a $2.9 billion bailout fund in early September, which requires financing assurances from its major creditors.
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