India will continue collaborating with Sri Lanka on debt treatment while the island nation attempts to emerge out of last year’s grave economic crisis, Finance Minister Nirmala Sitharaman told President Ranil Wickremesinghe.
Sri Lanka must bring its major creditors including China, India, and Japan, on board for a debt treatment plan agreeable to all, in order to unlock the second tranche of the International Monetary Fund’s (IMF) Extended Fund Facility (EFF).
On October 19, Sri Lanka reached a staff-level agreement with the IMF on economic policies to conclude the first review of the 48-month EFF-supported programme of the Fund. Following approval from the IMF Management and Executive Board — which the Fund has said will depend on the “critical step” of Colombo reaching an agreement with its official creditors — Colombo will have access to $330 million.
Further, in her discussion with the Sri Lankan President, Ms. Sitharaman discussed cooperation in inter-grid connectivity, aviation, power projects, oil exploration in the northern town of Mannar, an official statement said. The Union Finance Minister arrived in Sri Lanka on November 1, on a three-day visit. She called on senior Buddhist monks in the central Kandy district, visited Trincomalee and Jaffna in the island’s north and east. While no new agreements were inked during the visit, some previously-discussed projects were firmed up.
During the meeting held on Thursday night, the Union Finance Minister and Mr. Wickremesinghe witnessed the exchange of a (revised) Memorandum of Understanding on $15 million grant assistance from India for the promotion of Buddhist ties between the countries, with $10 million out of the amount funding solar electrification of religious places.
Earlier on Thursday, President Wickremesinghe thanked Prime Minister Narendra Modi and Ms. Sitharaman for the nearly $4 billion Indian assistance to Sri Lanka, during the country’s painful economic crash. “If we are stable today, it is because of the assistance,” Mr Wickremesinghe said, while speaking at the ‘Naam 200’ event, held to mark two centuries since the arrival of Sri Lanka’s Malaiyaha Tamils.
They were brought down by British planters to work in Sri Lanka’s coffee and later, tea plantations. When Sri Lanka faced its unprecedented economic crisis last year, India felt duty-bound to stand with its neighbour, the Finance Minister said. “We could not bear the difficulties our friends in Sri Lanka had to face. Our government and the people of India acted collectively and came to the assistance in record time,” Ms. Sitharaman, who was the Guest of Honour, told the audience.
Mr. Wickremesinghe and Ms. Sitharaman virtually launched the foundation stone laying ceremony for 10,000 houses being built in the hill country, with Indian grant assistance. The scheme was announced six years ago, during PM Modi’s 2017 visit to the central highlands. “I am happy to share that the phase-III is nearing completion with 3,700 houses already handed over to the beneficiaries,” the Minister said, of the 4,000-houses project launched in 2016.
Meanwhile, the 12th round of negotiations on the stalled Economic and Technology Cooperation Agreement (ETCA) between Sri Lanka and India took place from October 30 to November 1 in Colombo. A delegation of 19 Indian officials, led by Anant Swarup, Chief Negotiator and the Joint Secretary of the Department of Commerce, Ministry of Commerce and Industry of India, visited Sri Lanka, the Presidential Media Division said, terming the discussions a “significant step” towards strengthening the economic partnership between the two countries.