(COLOMBO, LANKAPUVATH) –Sri Lanka and China will expedite ongoing development cooperation projects, and increase trade and investment, with “a special focus” on poverty alleviation and livelihoods generation, Sri Lanka’s Foreign Ministry stated.
Issuing a statement following a virtual diplomatic consultation between Sri Lankan Foreign Secretary Prof. Jayanath Colombage and Vice Minister of the Ministry of Foreign Affairs of China, Luo Zhaohui, the Ministry said both sides held “extensive discussions” on strengthening high level exchanges, the fight against COVID-19, economic recovery efforts, people-to-people exchanges and cooperation on “international and regional issues”. The virtual meet comes less than two months after the high-level Chinese delegation visited Colombo.
Amid a persistent second wave of COVID-19, Sri Lanka faces a major economic crunch, as the country’s export and tourism sectors have been badly hit. Colombo has sought a $700 million loan from Beijing — in addition to the $500 million obtained in March — and is also negotiating a $1.5-billion currency swap facility with the People’s Bank of China.
Sri Lanka has sought loans amounting to more than a billion dollars from China this year, while President Gotabaya Rajapaksa told the newly appointed Chinese Ambassador to Colombo that Sri Lanka “seeks investments, not loans” from China. The discussion of possible Chinese assistance for poverty eradication and livelihood support in Sri Lanka is in line with President Rajapaksa’s earlier pledge to pursue “China-style development” in the island nation, and to disprove the popular “debt trap” analysis about Chinese loans. “Achieving the kind of rural development that China has reached over the past two or three decades and to improve the living standards of the rural population in Sri Lanka is one of my prime objectives,” President Rajapaksa told the Chinese Ambassador, according to a statement issued by his office last week.
Colombo has witnessed heightened engagement from Beijing, New Delhi and Washington over the past few months. In September, Indian Prime Minister Narendra Modi held a virtual bilateral summit with Prime Minister Mahinda Rajapaksa, months after the RBI sanctioned a currency swap facility of US$ 400 million.
Colombo’s request for a debt freeze and an additional US$ 1.1 billion currency swap facility from New Delhi, await a final word. U.S. Secretary of State Mike Pompeo visited the island nation in October, and cautioned Colombo about China’s “bad deals, violations of sovereignty and lawlessness on land and sea”.