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Tuesday September 28th, 2021
Economy

Sri Lanka in a balancing act with global powers for investment: P B Jayasundera

INVESTOR READY: The first land plots are ready for investors at China-backed Colombo Port City.

ECONOMYNEXT – Sri Lanka is in a balancing act with international powers to attract more investment after some past decisions seen it favouring China, President’s Secretary P B Jayasundera said.

The comments by Jayasundera, former finance secretary and the country’s top most public official, comeamidst increasing global concerns over Sri Lanka’s drift towards China following successive governments inking large port related deals to the world’s second largest economy.

“We are balancing because everybody is interested in Sri Lanka. Now that is our strength and we should read well,” Jayasudera toldEconomyNext at his office in the country’s old parliament, which faces a Chinese-built 1.4 billion dollar port city, and adjoins a 500 million dollar Shangri-La Hotels Lanka Ltd, a subsidiary of Honk Kong listed firm.

“So, everybody’s presence makes one business center and everybody’s presence is in business and not anything else.”

Sri Lanka has already given majority control ofa Chinese built port in Hambantota, in the deep South, to a Chinese firm on a on a long term lease, which the then-government was said was to help repay debt.

Colombo International Container Terminal (CICT), one of the island nation’s key terminals, is given to a Chinese firm on a build-operate-transfer basis.

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India, which accounts for nearly 70 percent of the transshipment business in the Colombo port has raised concerns over increasing Chinese presence specially after the visits of two Chinese submarines to Colombo port in 2014.

The West including the United States has raised concerns over Chinese using the ports for military purpose. China has rejected such claims and said it’s deals with Sri Lanka are purely commercial.

“I think the Chinese issue has come up because of the privatization of Hambantota port.That is because the port was sold on the premise that we are unable to pay debts,” Jayasundera said.

“Now this government fortunately is not telling we are unable to pay debts.Because the ‘unable to pay debt’ story is a justification to sell assets without having a rational basis.”

Jayasundera, who oversaw the Port City investment deal as the finance secretary in 2014 said the port city development took place with the investment came in from a listed Chinese company and that investment is now completed and successive governments have agreed for the investment and the payments have been made for the investments.

“Now we have to rebalance Chinese-interest only, Indian-interest only, or Japanese interest only theories partly by delinking loans. So, anybody can come here with investments and these investments have to come through bankable projects,” he said.

The ruling Sri Lanka PodujanaPeramuna (SLPP) led by Prime Minister Mahinda Rajapaksa has in the past criticized strategic assets given to India and threatened to cancel or renegotiate them. These include a tank farm in Trincomallee and a stillborn deal to run a Chinese-built airport in Mattala in the South.

The current administration went back on a tripartite agreement with Japan and India for a 500 million dollar East Container Terminal.

That, along with canceling 480 million dollar worth grant from US based Millennium Challenge Corporation (MCC) raised concerns of favoring China.

“There is no Chinese favour in the whole strategy,” Jayasundera said.”China is one country that has long standing bilateral relations and they have come thorough international market.

“So, if Chinese come and invest in our bond markets, capital markets and equity markets they are treated as same as any other investors. There won’t be any special status.”

“I am quite optimistic from the inquiries coming in that the American-centered, Western, and the European investors feel capitalizing opportunities to get their need which is access to Asia. They have access to Asia in other places. They probably like to have a cheaper place.” (Colombo/July27/2021)

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