A Foreign Direct Investment (FDI) is seen as a vital aspect in propelling Sri Lanka’s economic growth to the next level. Even on political platforms, the presidential candidates vow continually to attract FDIs if they are elected to office.
However, it is difficult to encourage FDI projects without improving the country’s status in the Ease of Doing Business Index. Sri Lanka is ranked 99 in the index out of 190 economies in the world. Sri Lanka is way behind the countries in the region that matter.
The Chinese Ambassador Cheng Xueyuan, in his recent address to the media after a press tour of the major Chinese investments in Colombo, expressed the need to jointly promote the administrative and legislative bodies of Sri Lanka, to accelerate the completion of relevant legal framework and policies, and to create a more favorable environment for attracting foreign investment, and help the mega-projects to bear fruit as soon as possible.
In his long speech delivered to the media at the Lotus Tower, a key Chinese investment in Colombo, he said the Chinese Government had provided essential capital aid for Sri Lanka’s socio-economic development.
The media personnel were taken on a tour of the key Chinese projects in Colombo – The Port City, The Lotus Tower and The Colombo South Container Terminal.
“China is a most significant partner and largest foreign investor for Sri Lanka. After the civil war, the Sri Lanka Government is in a desperate need to get foreign resources to re-establish the country and develop its economy,” Ambassador Cheng Xueyuan said.
“China, as a sincere friend and neighbour, offered the financial assistance that Sri Lanka needed the most. All the loans from China are offered only after scientific assessment, and only at the request of the Sri Lankan Government and the enterprises,” he said.
At the briefing, he also denied the allegation of the “Chinese debt trap.”
The Ambassador, who quoted the annual report of the Central Bank and Ministry of Finance, said the total foreign debt volume was about US $ 52 billion by the end of 2018, and of it, only US $ 6 billion was from China.
He said it accounted for only 11.5 per cent.
“More importantly, 60 per cent of it is preferential loans, with interest rate far lower than the market average level, which means the repayment pressure is, in fact, mainly from the ISB issued by Western countries. In many cases, the Sri Lankan Government is using low-interest rate loans from China to repay the ones of much higher rate from Western countries. China is not setting up, but instead helping Sri Lanka out of the “debt trap”, he said.
“The loans from China are mostly used on ports, roads, and water conservancy projects that matter to people’s livelihood, meeting the desperate need of Sri Lanka’s socio-economic development,” he said.
“The cooperation projects and loans from China have largely helped improve the infrastructure construction, thus promoting the economic progress, improving livelihood and providing more power for Sri Lanka’s future development. Needless to say, the so-called “debt trap” is just another fake news fabricated by Western media. And their only purpose might only be containing the common development of China and other developing countries,” he said.
Commenting on bilateral ties, he said the nature of China-Sri Lanka pragmatic cooperation was mutually –beneficial and with a win-win outcome.
“Take the Norochcholai Power Station as a good example. It provides nearly 50 per cent grid electricity for Sri Lanka, helps solve the power shortage problem, ensures the stable supply of electricity and makes the average electricity price drop by 25 per cent. Both Sri Lankan people and the nation have benefited from the power station,” he noted.
He said that the China-Sri Lanka pragmatic cooperation brought huge employment opportunities but not the opposite.
“It also helps train skilled youths that Sri Lanka needs the most in the future,” he said.
“According to statistics, the bilateral cooperation has created over 100,000 employment opportunities and helped train over 10,000 technical and management talents, laying a solid “soft power” foundation for Sri Lanka’s own development,” he said.
“The China State Construction Engineering Corporation Limited (CSCEC) directly employs more than 30 Sri Lankan managers and more than 2,000 workers. In Hambantota, The CSCEC also built a safety training and vocational centre for residents. The centre covers an area of 2,000 square meters and has 12 safety exercise projects and six vocational training programmes, enabling many residents to pass the training and assessment, and obtain a vocational skills certificate.
He said that, in the years to come, the Port City Colombo would create another 83,000 jobs for Sri Lanka.
“The China-Sri Lanka pragmatic cooperation prioritises the pursuit of advanced technology, standardisation and environmental protection. Chinese companies and joint projects are performing social responsibilities and doing charities. China-Sri Lanka pragmatic cooperation will never harm Sri Lanka's sovereignty and security,” he said.
He said a section of the Western media had created a hype that China was planning to build a "military base” by constructing and operating ports and airports, which cannot be more absurd.
“In history, China suffered from imperialism and colonialism. China extremely values its sovereign independence and territorial integrity, opposes any external interference, and never violates the sovereignty and territory of other countries. Some external forces, under the banner of "democracy", have arbitrarily accused China of militarisation while they are trying to do it secretly. It is believed that the Sri Lankan Government and people will have fair judgments,” he said.
“We must earnestly respect the legal validity and commercial credibility of the contracts, maintain a stable policy, and ensure that pragmatic cooperation, especially mega-projects cooperation, will not be affected by changes of government,” he noted.
“The media and academic institutes of the two countries must earnestly exert their social responsibilities, avoid copying third-party fake news and deliberate speculation, have field-studies on the relevant cooperation, conduct objective and fair research, and provide good advice and suggestions to the two governments and the business community,” he said. (Kelum Bandara)