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SL aid consortium could secure USD 20-25 bn over next 3 years

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‘Stabilizing Lankan economy boost to Modi’s neighborhood first policy’ :

Stabilizing the Sri Lankan economy could be a major win for India’s Prime Minister Narendra Modi’s neighborhood first policy, said Dr. Ganeshan Wignaraja.

India has extended its largest bilateral assistance to Sri Lanka in recent times in the form of credit facilities for fuel and food.

Dr. Wignaraja said India could go much bigger and lead a proposed aid consortium to Sri Lanka providing USD 20-25 billion over the next three years in cooperation with IMF and other friendly countries to help put the country on a decent footing and get the growth growing.

“That’s about a quarter of our GDP. Sri Lanka requires that funding if the country needs to go forward. Moreover, this is not just about India’s neighborhood first policy or humanitarian policy; I think this would create more business opportunities for India. Dr. Ganeshan Wignaraja, Senior Fellow National University of Singapore, Senior Research Associate –Overseas Development Institute, told a seminar organized by Centre for Banking Studies, held under the theme, ‘Confronting the Current Foreign Exchange Crisis in Sri Lanka ; Lessons from Global Experience.

Dr. Wignaraja opined that two thirds of the port traffic from Sri Lankan ports goes to India.

“We could evolve from this kind of aid relationship to a trade and investment relationship.”

“In this regard, ports will need to be connected better with Indian ports and airports need to be made better, perhaps through the North of Sri Lanka with the South Indian state.

The making India program could also have spillover effects for regional suppliers in Sri Lanka, for instance car, spare parts industry.

Dr. Wignaraja also emphasised the need to have an upgraded Free Trade Agreement (FTA) to ensure ruled based trade with India. Noting that India is fairly a small creditor to Sri Lanka, he said. “If I got this right, external debt to India amounts to one percent or less than one percent of Sri Lanka’s GDP in 2021.

Friday, July 1, 2022 – 01:00

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