Sri Lanka expects most investment from East Asia, no China phobia: Prime Minister
ECONOMYNEXT – Sri Lanka is expecting most investments from East Asia, Prime Minister Ranil Wickremesinghe was quoted as saying, as the administration tries to boost foreign direct investments amid global volatility as well as domestic policy uncertainty.
"We will take whatever investment comes in," Prime Minister Wickremesinghe was quoted as saying an interview in Singapore by Bloomberg newswires.
"It is going to be mostly from East Asia. We need the investment, we need the growth, we need the economic transformation."
Sri Lanka is a ‘Silk Road Station’ in China’s One Belt One Road strategy falling on an ancient land and sea route that connected Europe and the Middle East with the Far East.
Sri Lanka is expected to sign a formal agreement with China in August to reclaim sea and built a China city near the main port in Sri Lanka’s capital Colombo.
Wickremesinghe halted the project which was started without formal agreement or concession after coming to power in January 2015.
Reports said the Chinese were seeking 175 million dollars in damages or an expanded reclamation (with more land available for sale) in lieu.
China is also expected to get an airport and port in Hambantota in Southern Sri Lanka along with a specialized investment zone. A drydock, oil refinery and liquefied natural gas power plant are planned.
There has not been large private investments to Sri Lanka from the Western nations or Japan. Japan however is helping finance infrastructure along with China.
Sri Lanka’s suffered monetary instability from mid 2015, after Wickremeisnghe’s administration damaged state finances in a salary and subsidy hike and the central bank cut rates in April printing large volumes of money.
The Keynesian stimulus, inevitably hit the balance of payments and the country is now under an International Monetary Fund with a collapsed rupee slashing real wages and lowering living standards, which is also in dis-array after an attempt to practice prerogative taxation was halted by courts. (Colombo/July18/2016)