NEW DELHI: Lauding India’s financing assurances to the International Monetary Fund (IMF), backing Sri Lanka‘s debt restructuring efforts, Lankan high commissioner Milinda Moragoda said the social fallout of the economic crisis in the strategically located island nation would have been worse if India had not acted swiftly and that India’s support will minimise any trust deficit between the two countries.
Speaking to TOI, Moragoda said no other country would have helped Sri Lanka the way India did and that foreign minister S Jaishankar’s recent visit to Colombo, his third in the past 12 months, marked the entry of the bilateral relationship into a new phase. It also marked, he said, the beginning of Lanka’s economic recovery.
Jaishankar was in Colombo this month to express solidarity with Sri Lanka and he said during his visit India’s financing assurances to the IMF were meant to clear the way for Sri Lanka to move forward and in line also with India’s expectation that all bilateral creditors are dealt with equally. Sri Lanka is currently awaiting similar assurances from China and Japan, other major bilateral lenders. While Beijing has written to Sri Lanka offering a debt moratorium for two years and support for securing IMF’s proposed $2.9 billion bailout package, reports from Colombo suggest it’s not clear yet if the international lender, unlike in the case with India, is satisfied with China’s assurances.
“The timing was very important. India’s support overall and the fact that it took the lead can be hailed as an example of India’s neighbourhood first policy. There would have been more social fallout of the crisis otherwise,” said Moragoda, adding that India’s assurances are also in keeping with the requirements of Paris Club creditor nations which are helping Sri Lanka with debt restructuring. Protesters last year swarmed the residence of then president Gotabaya Rajapaksa, following acute food and fuel shortages in the country that resulted from Lanka’s debt crisis, leading finally to the exit of the Rajapaksas from power.
Moragoda said Sri Lanka is looking to attract more investments from India through cooperation in areas like renewables, power grid connectivity, refineries, tourism, trade expansion and proposed divestments in telecom and insurance companies. Plans to turn Trincomalee into a petroleum hub and use rupee for trade settlement are also under consideration. Jaishankar had said in Colombo that India will encourage investments in core areas like energy, infrastructure and tourism.
Significantly, Moragoda said India’s support will help address the trust deficit between the two countries, which has often been exacerbated by China’s ever-increasing footprints. “We went through some rough patches but what’s important is that we kept communication going. We were frank and candid. There will be ups and downs but what India did for us, no other country would have done,” said the high commissioner. India was the first country to provide financing assurances to the IMF as it sought proactive action by all creditors to help the nation of 22 million people.
India and Sri Lanka are currently working to finalise dates for a visit by President Ranil Wickremesinghe soon. Jaishankar had delivered an invite to the president when he called on him during his visit.
On Jaishankar’s call for implementation of the 13th amendment, which seeks devolution of power to the Tamil minority, and early conduct of provincial elections, Moragoda said Wickremesinghe had been working to bring all parties together from the day he was sworn in. “Ìt’s complex in Sri Lanka. It’s difficult to speak in terms of timelines but the president is trying. This issue has been on the table for 75 years and the 13 amendment has served as a framework for settlement. Right now, Sri Lanka is faced with a bigger crisis, an existential one, and it’s important everybody gets together,” he said.