External Affairs Ministers Recent Visit to Srilanka
Present circumstances:
- Jaishankar, the minister of external affairs, visited Sri Lanka after his trip to the Maldives. His portrayal of the connection between the two nations included happy news, an invitation that had been long awaited, and two unambiguous statements about what India expected from its closest neighbours across the Indian Ocean.
- When taken as a whole, the three shed light on Delhi’s viewpoint towards its ties to Colombo.
The advantageous:
- The day before Jaishankar’s visit on January 20, India sent a note to the International Monetary Fund (IMF) stating that India fully supports Sri Lanka’s proposed debt restructure.
- India is the first bilateral creditor to do this. Sri Lanka has also asked China and other creditors for similar guarantees. In a statement released on Monday, the IMF said that once the final conditions are met and the requisite assurances have been obtained, “a Fund-supported package for Sri Lanka can be presented to the IMF’s Executive Board for approval and would unleash much-needed finance.” To help it through its economic crisis, Sri Lanka is once again eligible for an IMF Extended Fund Facility of $ 2.9 billion, but as a condition, Colombo’s bilateral creditors must provide funding guarantees for the debt’s sustainability. China, Japan, and India are Sri Lanka’s three biggest bilateral creditors.
- According to the creditors’ primary concern, the restructuring plan must serve every creditor fairly. India and China were asked to join the platform by the 22 OECD nations that make up the Paris Club, of which Japan is a member. Although bilateral discussions have already taken place between India, Japan, and Sri Lanka, China has not yet made its intentions clear.
Position of India in regard to Sri Lanka’s financial assistance programme:
- India “did not wait on others and elected to do what we believe is right” by contacting the IMF first, the MEA said in Colombo, invoking the Neighbourhood First policy. He hoped that this example would be set by other bilateral creditors. He said that India expected that its early action would not only help Sri Lanka secure its position but would also ensure that all creditors would be treated equitably. He made no mention of any other countries.
- They would now be even more acutely aware that Beijing not only did not contribute last year, but that any recovery plan may be derailed by its apparent unwillingness to give the IMF the confidence it seeks. The Sri Lankans were appreciative of New Delhi’s $ 4 billion bailout last year.
- China is responsible for 52% of all bilateral debt, with Japan coming in second with 19.5% and India in third with 12%.
- India has been clear that its cooperation would be based on the “four pillars” of energy security, food security, currency support for foreign exchange, and Indian investment in Sri Lanka since the end of 2020, when Sri Lanka’s then finance minister Basil Rajapaksa visited India to request help in navigating the crisis, which at the time was swiftly intensifying.
- India has been successful in moving forward both new and long-delayed projects in the last year, including the Trinco oil tank complex and the Adani investment in wind farms in northwest Sri Lanka.
- The Adani Group is also constructing the West Container Terminal at the Colombo port. However, Colombo continues to receive complaints about the deals’ purported quid pro quo.
- First and foremost, Jaishankar made it clear that financial assistance is only a temporary fix and cannot put Sri Lanka’s economy back on track.
- India was ready to make the required investment, but Colombo had to first establish the ideal circumstances. India’s interest in the infrastructure, tourism, and energy industries was made clear by Jaishankar.
- According to reports, Sri Lanka has far greater potential for renewable energy than it can now consume.
- Selling the surplus to India by connecting to their grid via undersea cables is predicted to be a reliable source of income. Additionally, Trincomalee’s oil storage capability might be employed to ensure Sri Lanka and the region’s energy security.
- The second message, which India has been giving to Sri Lanka over the past few months, is to pass the 13th amendment to its constitution.
- The proposal, which calls for elected provincial councils, was originally put out at India’s engagement in 1987. It is the only concession made in the constitution to the Tamil demand for decentralisation. The amendment attempted to create a provincial council in the Tamil north-east of Sri Lanka, but Sinhala-Buddhist nationalists rejected it vehemently both then and still. For the first time since it could not be an uncommon provision, the entire country was divided into provinces.
Conclusion:
- Both nations may strengthen their bilateral ties through fostering trade and business, offering support during economic downturns, building ports, and providing net security in the Indian Ocean. There are societal and historical connections between India and Sri Lanka.
