Virendra Pandit
New Delhi: A week after a grateful Sri Lankan President Ranil Wickremesinghe’s state visit to New Delhi, the cash-strapped island nation is looking for more rescuers to bring its battered economy back on rails.
India was the only country to help Sri Lanka with a credit line of USD 4 billion in 2022 when its neighbor was rattled with socio-economic and political turbulence amid the unprecedented financial crisis.
Learning its lessons from China’s debt traps, a key reason for its fiscal meltdown last year, Sri Lanka has also reached out to France and Japan this week.
Japan is Sri Lanka’s second biggest bilateral lender, after China, with about USD 2.7 billion in outstanding loans, according to the latest finance ministry data. India is the third key creditor.
During the first-ever visit of a French President to Colombo, Emmanual Macron pledged strong support for the island nation’s debt restructuring and discussed ways to enhance bilateral relations when he met with his Sri Lankan counterpart Ranil Wickremesinghe on Friday.
President Macron, who was on his return home from a 5-day visit to the Pacific islands of Papua New Guinea and Vanuatu, was met by Wickremesinghe at the airport and spent over two hours in Colombo, the media reported.
The two leaders held “friendly and productive” bilateral discussions to enhance and elevate the existing relations between Sri Lanka and France.
President Macron reaffirmed France’s willingness and commitment to support Sri Lanka in its economic recovery. As Colombo’s fourth-largest creditor, Paris pledged its assistance in the debt restructuring process, aiming for a positive outcome for the country, an official statement said.
Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, because of a severe paucity of foreign exchange reserves, ballooning external debt, and the collapse of tourism, a key source of revenues—which all culminated in a default in April 2022.
“Sri Lanka and France are two nations in the Indian Ocean sharing the same goal: an open, inclusive, and prosperous Indo-Pacific. In Colombo, we confirmed it: strong as in our 75 years of diplomatic relations, we would open a new era to our partnership,” President Macron tweeted after the meeting.
Their discussions focused on strengthening cooperation in various sectors, including politics, economics, tourism, climate change, sustainable development, and maritime activities.
As part of the commemoration of the 75th anniversary of diplomatic relations between the two nations, several specific areas for further collaboration were identified, according to the statement.
“These areas of cooperation included the establishment of a school for maritime safety and security, the opening of a permanent office for the French Agency for Development (AFD) in Sri Lanka, the initiation of high-level diplomatic dialogues, cooperation in the education sector, and the enhancement of efforts to combat human trafficking in the maritime safety and security sector,” the statement said.
Besides, the two leaders exchanged views on regional and multilateral interests in the current global context. President Macron expressed keen interest in collaborating with Sri Lanka during its upcoming chairmanship of the Indian Ocean Rim Association (IORA), of which France is a member.
President Wickremesinghe showed interest in the Indian Ocean Commission, where France actively participates, and conveyed Sri Lanka’s agreement to join the Paris Agenda for the People and the Planet, emphasizing the island nation’s commitment to global efforts for a sustainable future.
In June, Wickremesinghe met Macron in Paris during the heads of state sessions of the conference for a New Global Financing Pact.
In another development, Sri Lanka on Saturday invited Japan to resume investment in projects including power, roads, and ports, after the visiting Japanese Foreign Minister, Yoshimasa Hayashi, wrapped up the first high-level visit to Colombo in nearly four years.
Sri Lankan Foreign Minister Ali Sabry said his country was seeking Japanese investment in sectors such as power, infrastructure, and dedicated investment zones as well as in the green and digital economies.
“We are confident that Sri Lanka’s economic recovery, which has made a promising start, and future growth prospects will provide us with greater opportunities to enhance the Japan-Sri Lanka relationship,” Sabry said.
Hayashi is in Colombo as part of a multi-country diplomatic tour including India, South Africa, Uganda, and Ethiopia. His next stop will be the Maldives.
Sri Lanka, which lies along key shipping routes in the Indian Ocean, has become a hot spot for influence between India and Japan on the one side and China on the other.