New India-Sri Lankan economic partnership can help address sensitivities: Envoy
The economic partnership, unveiled during Sri Lankan President Ranil Wickremesinghe’s visit to India last month, includes power grid interconnection, construction of a petroleum pipeline, and a feasibility study for land connectivity
The implementation of the new ‘India-Sri Lanka economic partnership for maritime, energy and financial connectivity’ can be a key step towards addressing the sensitivities of both countries and forging stronger relations, Sri Lankan envoy Milinda Moragoda has said.
Thanking India for its “indispensable role” in helping Sri Lanka cope with the financial crisis last year, Moragoda said in an interview that his country is eyeing greater economic integration to benefit from India’s growth. Sri Lanka also hopes India, especially the private sector, will play a key role in investments and divestment plans, he said.
The economic partnership, unveiled during Sri Lankan President Ranil Wickremesinghe’s visit to India last month, includes power grid interconnection, construction of a petroleum pipeline, and a feasibility study for land connectivity.
After talks with Wickremesinghe, Prime Minister Narendra Modi said the security interests and development of both countries are intertwined and they keep in mind each other’s sensitivities.
Moragoda emphasised the benefits of stronger economic links and said: “Once that economic integration takes place, I don’t think there is space for anybody else in that.”
“Leaders on both sides have a good equation, and the strong bilateral dialogue has allowed the countries to talk through issues whenever they “have gone through some difficult periods”, he added.
The visit of a Chinese surveillance vessel to Chinese-controlled Hambantota port in Sri Lanka amid the economic crisis – during which India provided assistance worth $4 billion – had become an irritant in bilateral relations.
Moragoda pointed to civilisational and geographical links between the two countries and said Wickremesinghe’s talks with Modi helped address such issues and paved the way for the next stage of the relationship. “I think we understand each other, but obviously...there are known, unknowns and unknown unknowns, and we have to face those. I am not saying the challenge is over, but I think as long as we keep the quality of dialogue. That is what matters,” he said.
The economic partnership is crucial for connectivity, economic integration and investments, including the resumption of ferry services, expanded air connectivity, and the transformation of the Trincomalee oil tank farms into a regional energy hub.
“If we do not hook on [to the Indian economy], I think probably we won’t be able to grow as fast as we need to. [We need] to create these linkages and use India as a growth engine,” Moragoda said.
Increased air and maritime connectivity are important for tourism since India is the largest source market for tourists. In July, 20% of tourists received by Sri Lanka were Indians, and Britain was in second place with 12%.
Wickremesinghe and Modi discussed the idea of the private sector playing a greater role in investments, both for new projects and disinvestment plans of the Sri Lankan government, Moragoda said. In this context, he pointed to the scope for Indian investments in Sri Lanka’s renewable energy sector, ports and Colombo airport.
The Sri Lankan government’s plans to sell Sri Lankan Airlines, the main insurance company, a major hospital and the Hilton Hotel also offer opportunities for India’s private sector.
The two sides are holding technical discussions to decide on the most economical and efficient way to connect their electricity grids, with new technology facilitating a cheaper undersea option. Here too, the two sides are looking at private investments to speed things up, Moragoda said.
The land connectivity proposal includes a feasibility study and environmental issues. “We have to work out the practical aspects of whatever is economical. The technology in road building has leapfrogged and it makes what looked impossible earlier, possible now,” he added.
A key matter raised by Modi during Wickremesinghe’s India visit was a political solution to fulfil the aspirations of Sri Lanka’s Tamil minority and Moragoda said the only way forward is for the Sri Lankan president to build consensus on this issue in Parliament.
“This conversation has been going on for 75 years, and I don’t think we are going to resolve it immediately. But equally, we have to start someplace. He [Wickremesinghe] has done what he can, and I hope people will engage... And that’s what he has on the table. But then we are a democracy, and we have to live with that,” he said.