An Echelon Media Company
Thursday May 6th, 2021
International Relations

Sri Lanka not prioritising China; economic considerations will figure in investment decisions

BILATERAL TIES: Sri Lanka’s current Prime Minister Mahinda Rajapaksa with then China Foreign Minister Yang Jiechi at an earlier meeting.

ECONOMYNEXT – Sri Lanka remains non-aligned in her foreign policy and has not given priority to China, but any decisions regarding bilateral investments will be based on economic considerations, a top minister said.

Co-cabinet spokesman Minister Keheliya Rambukwella told reporters yesterday that though Chinese investments have not been prioritised, the government is prepared to work with foreign investments that seek positive economic engagement.

He further said no decision has been made or discussed regarding handing over the construction of the Japan-funded 30 billion yen light railway transit (LRT) project to China. President Gotabaya Rajapaksa ordered the immediate termination of the project last month, a decision that was later approved by the cabinet of ministers citing high costs and low returns. In June this year, the government announced plans to request proposals to fund a new USD 2.2 billion LRT project after cancelling the Japanese soft-loan project. Proposals were to be sought from international investors to build the LRT which would run from Colombo’s Fort area to fast growing suburbs in Malabe and Athurugiriya, via the administrative capital of Sri Jayewardenepura.

Rambukwella said yesterday that the government has put the project on hold at the moment based on the findings of an expert committee that the project is not viable nor profitable to Sri Lanka. A final decision will be made upon further investigation, he added.

Last week, Sri Lanka signed an agreement with China for grant assistance amounting to 600 million RMB yuan (Rs. 16.5 billion). A statement from the Embassy of China said the funds will be  Chinese Government and her people will be “utilized with a high priority on medical care, education and water supply etc in rural areas of Sri Lanka, so as to contribute to the well-being of her people in a post-COVID era”. The agreement was signed during the high profile and controversial visit of Chinese Communist Party (CCP) politburo member and ex-Finance Minister Yang Jiechi.

Earlier this month, US Ambassador to Sri Lanka Alaina B Teplitz told the privately owned Daily Mirror on October 4 that Sri Lanka must not be vulnerable in its relationships with foreign nations, noting that partnerships between countries should be open, transparent, and mutually beneficial.

In the interview, Teplitz made critical remarks on loans offered by China under the Belt and Road Initiative (BRI), calling for fair competition that would lower prices and ensure better quality.

Citing a Verité Research report, she said: “All but one loan (where data was available) were 100% ‘tied’ – meaning the loan terms dictated that contracts and tenders be awarded to Chinese contractors, limiting the ability of Sri Lankan and global firms to compete for these projects.”

She cited Sri Lanka’s agreements with the United States Agency for International Development (USAID) as examples of transparent agreements.

“The point is, we want people to know what we are doing in Sri Lanka. We welcome transparency and openness and make information publicly available for all of our programming. We want Sri Lankans to know how the American people are helping to advance inclusive, democratic growth in the country, because we stand as a long-term and committed partner and a friend to Sri Lanka. The grant-funded projects we support are just some of the ways in which we demonstrate our friendship and partnership,” she said.

Teplitz’s remarks drew outrage from the Chinese embassy in Colombo, which insisted that both China and Sri Lanka as independent countries have “the full right to develop relations with foreign countries according to our own needs and will.”

“While it’s always not surprising to see the US interfere into a sovereign country’s internal affairs, the general public is still astonished to witness its despicable attempt to manipulate others’ diplomatic relations,” the embassy said in a strongly-worded statement released the next day.

“How Sri Lanka and China engaged with each other has repeatedly stood the test of time, and the government and the people of Sri Lanka have their own independent and fair judgment on the relations with China,” it added.

The US has no power or obligation to lecture on China-Sri Lanka relations, the embassy further said in its statement.

“Such naked hegemony, supremacy, and power politics will neither be tolerated by the Chinese nor be accepted by the Sri Lankans. We strongly suggest the US to quit the addiction of preaching others and applying double standards,” it added. (Colombo/Oct13/2020)


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