India urges creditors to take 'proactive steps' to help Sri Lanka revive its economy

By Ahmad Adil

NEW DELHI (AA) – India said it has extended "financing assurances" to the International Monetary Fund (IMF) on cash-strapped Sri Lanka, urging creditors to take proactive steps to facilitate its recovery.

India’s Foreign Minister Subrahmanyam Jaishankar, who is on a two-day visit to the South Asian nation, said on Friday India will encourage greater investments in the Sri Lankan economy, especially in the core areas like energy, tourism, and infrastructure.

Jaishankar said his primary purpose in coming to Colombo is to express India’s solidarity with Sri Lanka during these "difficult moments."

"As you all know, last year, India extended about US $4 billion in terms of credits and rollovers to help Sri Lanka get through an economic crisis," he told the media on Friday morning following his meetings with Sri Lankan leadership in Colombo.

Calling India a neighbor which is "prepared to go the extra mile when Sri Lanka feels the need," Jaishankar said India will encourage greater investments in the Sri Lankan economy, especially in the core areas like energy, tourism, and infrastructure.

"We count on the government of Sri Lanka to provide a more business-friendly environment to create a powerful pull factor. I am confident that the gravity of the situation is realized by policymakers here," he said.

The new Sri Lanka administration is currently negotiating a $2.9 billion bailout from the International Monetary Fund.

Stating that energy security is today one of Sri Lanka’s most serious challenges, the minister said Sri Lanka has enormous renewable energy potential that can become a sustainable source of revenue.

"In its support for Sri Lanka, India is prepared to be a reliable partner on such initiatives. We have today agreed in principle on a renewable energy framework that would take this cooperation forward," the minister said.

On Thursday night, Sri Lanka’s Foreign Minister Ali Sabry said he discussed bilateral relationships, people-to-people contacts, and trade and investment ties with his Indian counterpart. He also added that he appreciated India's steadfast assistance to Sri Lanka.

Crippled by a shortage of foreign exchange reserves after the collapse of the tourism-dependent economy, the country of 22 million defaulted on all its foreign debt last year.

It has been unable to pay for food, fuel, and other necessities, with a fuel shortage causing daily power outages.

Last July, Ranil Wickremesinghe was sworn in as the new president of the country which is grappling with its worst financial crisis.