India’s support has made a “world of difference” to Sri Lanka’s economic situation, said Sri Lankan Foreign Minister G.L. Peiris, on his first visit to India since he was appointed last year, making it clear that the flurry of agreements announced in recent weeks have allowed the neighbours to move on from the problems of the “immediate past”.
In an interview to The Hindu, he cautioned, however that the unresolved conflict over fishing rights is a “constant irritant” in bilateral relations, and the recent clashes between Indian and Sri Lankan fishermen that led to the death of two Sri Lankans, was a “flashpoint” in ties that he hopes to resolve through talks.
“There’s no doubt whatsoever that Indian support at this critical juncture has made a world of difference. It has helped us to tide over the immediate difficulties which were obviously acute,” Mr. Peiris told The Hindu, referring to a series of announcements, including one billion dollars in various lines of credit, a currency swap arrangement of $400 million and a debt deferral of $515 million for two months from India.
In addition, India and Sri Lanka concluded a long pending agreement to jointly develop oil tank facilities in Trincomalee, and have planned a number of infrastructure projects involving the private sector, which will be further discussed when Finance Minister Basil Rajapaksa visits Delhi in the next few weeks. Sri Lanka has also invited Prime Minister Narendra Modi to attend the BIMSTEC summit in Colombo on March 30, and hold “substantive” bilateral talks.
“All of this has engendered a degree of confidence which we didn’t see in the immediate past. And it has brought into being very special relation… there is a feeling that India has always stepped in when Sri Lanka needed it,” Mr. Peiris added.
Ties between India and Sri Lanka plummeted in February 2021 over the Rajapaksa government’s decision to cancel an MoU with India and Japan for Colombo’s East Coast Terminal project, which it later cleared for a Chinese company. Several other projects involving India had also been delayed for what Mr. Peiris called “logistical issues and bureaucratic reasons”. Subsequently, Sri Lanka awarded the West Coast Terminal project to the Adani group, and after a number of rounds of talks, including calls between PM and President Gotabaya, as well as three meetings between the foreign ministers on the sidelines of events in New York, Dhaka and Abu Dhabi, relations have seen a “new enthusiasm and a fresh energy”, he said.
Mr. Peiris met with External Affairs Minister S. Jaishankar and Foreign Secretary Harsh Shringla on Monday, as a part of his three-day visit. In a tweet, Mr. Jaishankar said they held “productive talks,” which included discussions on economic cooperation, energy security, pending agreements on infrastructural projects, and agreed to schedule bilateral mechanism talks on the fishing rights issue at an “early” date.
Mr. Peiris said in the interview that he also hoped to consult India and other BIMSTEC members including Bangladesh, Bhutan, Nepal and Thailand about the best way to tackle the “problem” of whether to invite Myanmar to the summit, or to follow the ASEAN grouping decision to exclude the military regime that took power in a coup last year.
Mr. Peiris also said apprehensions in India over Sri Lanka’s close ties with China were not “logical”, and the relationship with China was not at the “expense of India”.
“We are part of the Belt and Road Initiative. China has played a significant role with regard to the development of our ports and harbours and infrastructure of which we are appreciative,” he said, adding that Colombo hoped that China will soon restructure Sri Lanka’s debt, given its economic problems, a request made to Chinese Foreign Minister Wang Yi during his visit to the island last month.
When asked about the issue of Tamil reconciliation and devolution of power to the North and East, that India has consistently pushed for, Mr. Peiris said a committee of experts would submit a draft on the issue within two months to the President’s Council, but added that no decision can be implemented unless there is “sufficient consensus” from the Sri Lanka’s Sinhala majority. In January, several legislators from the North and East wrote a letter directly to Prime Minister Modi, seeking India’s intervention in ensuring the Sri Lanka government keeps its commitment to the process.
India’s economic support made a world of difference, says Peiris
Days after India announced a slew of measures to help Sri Lanka during its economic crisis, and the ExIm bank signed an agreement to provide a Line of Credit of $500 million, Sri Lankan Foreign Minister G.L. Peiris arrived in Delhi for a meeting with External Affairs Minister S. Jaishankar, his first visit to India since he was appointed Foreign Minister last August. In an interview to The Hindu he spoke of plans to take bilateral ties to a new level, even as he cautioned that clashes over fishing rights had become a “flashpoint” in the relationship.
Excerpts
Has India’s economic support (including currency swap, lines of credit and debt deferral) in the past month changed the situation for Sri Lanka?
There’s no doubt whatsoever that Indian support at this critical juncture has made a world of difference. It has helped us to tide over the immediate difficulties which were obviously acute. The Indian support has several components, one of which is a 1 billion line of credit for the purchase of essential food items, pharmaceutical products, this is exceedingly useful for us at this time, there is also support for the purchase of oil. That is crucial. And India has offered $500 million through the ExIm Bank of India, and that’s revolving credit, it will be replenished as we use it, and pay back. As far as the balance of payments situation is concerned, Indian support has gone a long way to help us as you mentioned, the Asian Clearing House union that’s about $515 million. We have been granted different postponement of it and also exceedingly useful was the soft currency swap of 400 million US dollars. So cumulatively in total, all of these amounts to very substantial assistance, which we appreciate. My colleague [Finance Min] Basil Rajapaksa, was here. And he’s due to come on a second visit soon after the 16th of this month to consolidate these agreements. And there’s also been Indian enthusiasm to encourage the Indian private sector to come in in a big way into several sectors including hospitality, food processing, cement, possibly, and pharmaceutical production.
What is the timeline for an agreement on the Trincomalee MoU for developing oil facilities?
There is a realisation on both sides that it is a great pity to leave this potentially useful facility neglected for something like 17 years because that storage capacity would have been very useful for Sri Lanka as well. In a world where oil prices are significantly fluctuating, if we had the capability to buy oil at relatively low prices and store it, that would have helped a great deal. So we after the great deal of discussion, we have been able to arrive at an agreement for 24 of the oil tank farms for the Ceylon Petroleum Corporation and 14 for Indian oil. Then the remaining 61 is to be a joint venture with Sri Lanka having 51% India 49%. All of that has been agreed And the only thing that remains to be done is the signing of the lease. There are some procedural matters like approval from the Coast Guard and the railways authority, all of that is being handled. And it will be implemented very shortly, it’s going to make a big difference. But also I must emphasise, it is not the transaction per se, because we are now engaged in elevating this relationship from a transactional phase to a much higher plane, to a. strategic partnership.
So, what is important is a threshold of confidence, and there is the Trincomalee or the West container terminal where the Adani Group of Companies is the principal player. So all of this has engendered a degree of confidence which we didn’t see in the immediate past. And it has brought into being very special relational there is a feeling that India has always stepped in when Sri Lanka needed it, whether it has been economic, or Covid or the maritime oil spill we had.
What specifically do you hope to discuss on the strategic sphere?
There is a lot to discuss in the strategic sphere- We have 500-600 people being trained here: military and police officers. The trilateral arrangement [on counter-terrorism] between India, Maldives and Sri Lanka is doing very well. It is serving a practical purpose. So how to take that forward will be among the matters that we are discussing.
Has the past you referred to, when there was some bitterness over the cancellation of the East Coast Terminal project MoU to India and Japan, slow pace on Trinco, and other Indian projects, been put behind the two countries now?
I think so, because you know, that that was not due to any conscious decision to slow things down. There were logistical issues, some projects, in different ministries, for bureaucratic reasons not moving forward as rapidly as one would wish but that is behind us. And there is now a new enthusiasm and a fresh energy. Apart from the projects that we discussed, there are many others in the pipeline, some of which are nearing completion and can be done immediately, including a fund PM Modi initiated for the improvement of Buddhist temples, MoU between diplomat training institutes, purchase of 2 Dornier planes, a 4000 tonne floating doc project, and the Jaffna cultural centre. And it is our hope and expectation that it will be possible for PM Modi to visit Sri Lanka for the BIMSTEC Summit. We had contemplated a hybrid format at the end of March. And if Shri Modi could visit us, there is sufficient substance for a visit, not just symbolic. Interesting.
We’ve seen ASEAN decide to go ahead with its summit without inviting the Myanmar regime military regime. How is BIMSTEC treating the question of the Myanmar leadership?
That is a problem. We would like to consult with other countries including India, about the best way of dealing with that. It is a sensitive issue, and I will discuss informally here to make the best decision in a difficult situation.
Do you think BIMSTEC has has a greater chance of success than SAARC, given that SAARC has not been able to even hold a virtual summit thus far ?
No, I think it’s a mistake to denigrate SAARC in this way. As far as political issues are concerned there are obviously problems [between India and Pakistan]. But in the meantime SAARC has done a lot in other areas of education, exchanges in commerce, from professionals, artists, playwrights film right.
When it comes to confidence, the question of China often becomes an issue between India and Sri Lanka, particularly when projects are cancelled in China’s favour, and we saw a visit by FM Wang Yi to Sri Lanka last month….
That’s not a new problem. There’s no exclusivity in Sri Lanka’s foreign policy. We have cordial relations with all our friends. But the relationship with India is in every respect a very special relationship. That is partly due to circumstances relating to history, geography, economy, it’s the destiny of the two countries is inextricably interwoven, but it’s also a matter of conscious choice is not that destiny has put us together.
There has a realisation in both countries that further integration represents a win win situation. In every sector People to People contact outtake tourism that is low hanging fruit, the Ramayana trail, developing 52 sites, tourism sites. At the time COVID-19 hit us about 1/3 of the tourists coming into Sri Lanka were from India. India is our largest is our second largest trading partner, the third largest source of investment into Sri Lanka.
We do have a relationship with China. We are part of the Belt and Road Initiative. China has played a significant role with regard to the development of our ports and harbours our instruction infrastructure of which we are appreciative but that is not at the expense of India. And we have repeatedly assured that under no circumstances would we allow any part of Sri Lanka’s territory territorial waters are aspirants to be utilised in any manner that is detrimental to India or to any other other friends. So there really is no need for apprehensions to be entertained. It is it is just a kind of fear, which has no logical basis.
Just recently, two Sri Lankan fishermen were killed in clashes between a fisherman on both sides. Is there some kind of a new package or some kind of a new way forward, that you are discussing with India?
There have been discussions about retraining Indian fishermen with regard to methods of deep sea fishing discussions among fishermen’s cooperative societies on the two sides and other long term solutions. We do need something of a more immediate nature. I would say this is a real flashpoint in the relationship between the two countries it is a constant irritant. And we really do need to find a solution to these. There’s goodwill on both sides, and there is the realisation and the result. To address this matter in earnest and find a solution, I hope my visitwill play a constructive role in that regard.
To turn to the Tamil issue, legislators from the North and Eastern Provinces wrote to PM Modi asking for his intervention in ensuring an implementation of promises on devolution and the 13th amendment. Do you see this as another flashpoint? Should India have a role?
No, I won’t say that…India has taken interest [in the past]. But the principal responsibility, obviously is of Sri Lanka, and Sri Lankan political parties must engage primarily with the Sri Lankan government. There is at the moment, a comprehensive constitutional reform exercise that is underway. There is a committee of experts who is preparing a draft that is expected to be ready and to be submitted within the next two months. And this [devolution] is one of the issues that will no doubt be addressed in that draft. But whatever is done must be backed up by a sufficient consensus in the country. You know, if there is a great deal of resistance experienced, then it will be difficult to implement on the ground. So, we will we will try to talk to all stakeholders and arrive at understanding with regard to arrangements which will really stand the test of time.
But it has been eight months since talks were supposed to be held between the Tamil leaders and President Gotabaya, and have not been held yet?
We many things, principally Covid-19 has intervened. But it is something that we are committed to and we will have those discussions quite soon.
