Foreign Affairs Minister Ali Sabry last week put strong Indo-Lanka ties in context following India’s extension of support and relief for Sri Lanka’s external debt restructuring as the first bilateral creditor to do so and the official visit of External Affairs Minister Dr. S. Jaishankar.
India reiterated it will stand by Sri Lanka in its hour of need and expressed confidence in overcoming challenges. During bilateral engagements between Dr. Jaishankar and President Ranil Wickremesinghe, Prime Minister Dinesh Gunawardena and Foreign Affairs Minister Ali Sabry, the two nations agreed to strengthen ties as well as pursue new measures to enhance cooperation in areas of renewable energy, trade, investment, infrastructure, and tourism.
Minister Sabry spoke to CNN-News 18 -India on the importance of ties with India as well as Sri Lanka’s relationship with China, the challenge of external debt restructuring and future prospects for Sri Lanka.
Here are excerpts of CNN-News 18 –India’s exclusive interview by Shivani Gupta.
Q: M.U.M Ali Sabri, Foreign Minister Sri Lanka is now joining me. Sir, thanks a lot for sparing your time and sharing first and exclusively your meetings and its results with your counterpart.
India had already announced that it will support as one of your biggest lenders, backing the restructuring of the Sri Lankan debt, which has come as a massive relief for you. Could you give me a sense of what the discussion was like as far as debt restructuring is concerned?
Yeah, debt restructuring is very important for Sri Lanka and its future because we have approached the IMF, but funding has not come in. So, two stages which we have to pass – the first one is we need to take a lot of pre-actions, you know, so that you enter into a stock-level agreement on the basis of that stock agreement you need to do a lot of things, though some of those things are very painful and very difficult, which we are doing now. For example, the cost-reflective pricing which means the petrol prices have gone up, kerosene prices have gone up, electricity bills have gone up so it’s not very popular.
Once you do that, you have to tangibly see some economic benefit coming into the country. So, we had another hurdle to pass, that hurdle is because Sri Lanka’s debt had been declared unsustainable. We got to get our biggest creditors – bilateral creditors – to give us assurances that they are willing and able and contribute towards a debt-restructuring process under the IMF watch.
So, several countries we’ve been discussing for the last three to six months, but there was a kind of a stalemate, and it is at that juncture that India, as always, comes to our rescue and as a true neighbour and a great friend came out and gave this restructuring, as required by the IMF. So we are deeply grateful and Sri Lankans indeed very grateful to India and the Government of Narendra Modi and the minister himself.
Q: Amongst your biggest creditors India – and Japan also virtually – had already confirmed that they will be willing to back this, but China hasn’t. How confident are you that you will be able to get China on board too?
Officially, it is only India which has been given but the Paris Club, which includes Japan, have always told us that they will support. So, it is a matter of time, we should get it.
China has also expressed their desire to support us, and very recently in writing, that they will support Sri Lanka’s EFF program with the IMF. One of the prerequisites is debt restructuring, so I think they understand that, and we are very hopeful that just like India and other countries China will also come to our rescue and will give us the debt restructuring and assurances, sooner than later.
Q: Can I ask you sir, recently, over the past few years, especially before this economic crisis hit Sri Lanka, there was a feeling growing in India that despite Sri Lanka and its glorious partnership with India, more recently Sri Lanka had not reciprocated amply to India’s friendship in the right manner. What do you think Sri Lanka has done in recent times to assuage India’s fears on this front?
I mean there’s a perception, but to be honest we have been always working very closely with the Indians. Several projects have come in and there are several projects in the pipeline – the port developments are coming in, renewable energy discussions are going on, and this discussion will take this into a different level and this visit of the External Affairs Minister Dr. Jaishankar, will help in that. He had a very fruitful discussion with a team of cabinet ministers, including myself, and had a very fruitful discussion one-to-one with the President Ranil Wikremesinghe. Both those discussions focused around expediting investment to the country.
I would say always when you have a relationship there are ups and downs, but our relationship has been consistently good and, of course, there are areas where we have differed sometimes. But overall, as Sri Lankans we are very proud, and we are very happy that India is making great leap in its economic gains.
A neighbour – a giant neighbour – doing well is totally good for us. We have always advocated that because, I mean that’s practical also, if you look at it, it is the regions which develop together – whether it’s North America or whether it’s Europe, whether its ASEAN countries or whether its Gulf, the whole area develops and the whole region develops. So, India developing, India taking great strides in its economic progress is great news for Sri Lanka – we are very happy to see that.
Of course, as sovereign countries we will always discuss and we will always have differences, but I’m sure we can sit in a mature manner and help each other.
Today’s tone was that – we will work together, we will iron out the differences, we will provide a climate which is conducive for investment and on the basis of that we will work together so that it will be mutually beneficial for our people.
Q: Can I just ask you as a follow-up question before this crisis hit as I mentioned that feeling was growing in India. During this crisis, India has extended funds of up to four billion dollars and they’ve really come through as a good neighbour, and if I may use the term as a big brother, as you said it’s a giant country in the neighbourhood and it helps you and your growth as well. Do you think this economic crisis has told Sri Lanka who its true friends are versus some others now?
I think Indian relationship with Sri Lanka is historical. We share a civilisation together. Ours is religious, cultural, social, economic and security concerns – all together.
Of course, there are times when differences of opinions come and even in family that comes, but we have always been good friends. India has always stood by Sri Lanka. If not for India’s support, we would not have overcome the deadly terrorist outfit that plagued our country for 26 years. We are very grateful.
But as a sovereign country, you have to work with all countries. Even your country, your biggest trading partner, is sometimes not the most favoured country but that’s how you work and that’s how the world is evolving. It doesn’t mean we are undermining India’s interests, or we are treating it differently. India is the most important relationship as far as Sri Lanka is concerned.
But it is unfair for us to rely totally on one country. Even Jaishankar agrees that India has no problem with other countries also legitimately coming here and helping us and investing in us.
Security concerns are there, but we will not allow anyone to threaten or undermine India’s legitimate security concerns. No one has sought to do that. But we understand Indian sentiment.
Q: I do want to ask you finally, before I let you go, a lot of countries have taken note of what has happened in Sri Lanka. There are also countries that are nearing the same situation as Sri Lanka. Do you believe that there has been a larger realisation post what happened to Sri Lanka to not fall into the same trap?
There’s a lot to learn from Sri Lanka’s case. Sri Lanka had bad debt, bad luck, and bad policies. So, you need to carefully analyse. Of course, we knew COVID and the unfortunate conflict in Ukraine. Bad debt came for a long period of time since 2005 – unsustainable now. So, I think it’s a good eye-opener for everybody. We could have acted differently at times. India coming in and giving us a helping hand prevented us from total collapse. Thank you. (Source: https://www.youtube.com/watch?v=E8V_e8p-jUw)