NEW DELHI: For a tiny nation, Sri Lanka has astoundingly high levels of external debt, its foreign reserves are low and the pandemic has played havoc on the tourism sector, one of the mainstays of its economy. Soon after taking charge as President in 2019, Gotabaya Rajapaksa had told StratNews Global that he would prefer countries to come and invest in Sri Lanka rather than give loans. Earlier this year, Sri Lanka pulled out of the agreement to develop the East Container Terminal of Colombo Port with India and Japan, citing protests by trade unions. There have been similar protests against Chinese projects but why were those not scrapped, asks Dr Sreeradha Datta, Centre Head & Senior Fellow, Neighbourhood Studies, VIF. Speaking on ‘The Gist’ anchored by StratNews Global Editor-in-Chief Nitin A. Gokhale, she drew attention to the apprehensions about the Colombo Port City project, funded and executed by China. Sri Lanka has a wonderful geographic location and can certainly be the economic hub of South Asia but it first needs to have proper procedures in place such as investor-friendly tax regime, clear arbitration rules and a sense of stability, she added.
