Distancing from Japan will have more adverse effects

By Yohan Perera   

While stating that the Japanese government had temporarily halted funding three projects in Sri Lanka, former Minister Patali Champika Ranawaka yesterday warned that distancing from Japan will have more adverse effects.   

Mr. Ranawaka who was the former Minister of Megapolis told a press conference that Japan had informed Sri Lanka that it had decided to temporarily halt funding for three projects including the construction of a LNG power plant in Kerawalapitiya and the light train project. 

Mr. Ranawaka said Japan had made this decision considering Sri Lanka’c capacity to repay loans. “Japan had made this decision following assessments made on Sri Lanka’s ability to repay loans, by rating agencies. Rating agencies dropped Sri Lanka’s ratings recently. Japan in diplomatic wordings have indicated it does not trust that Sri Lanka is in a position to repay the loans,” he said.   

“It is likely that the government will go for borrowings at higher rates, given the present situation. This will put the country in a greater disaster as the country would be caught up in a greater debt trap,” he said.   
Also he said it is a pity that Sri Lanka has to delay the light rail project as people were eager to see an improvement in the country’s transportation system. 

• Rating agencies dropped Sri Lanka’s ratings recently. Japan in  diplomatic wordings have indicated it does not trust that Sri Lanka is  in a position to repay the loans