Sri Lanka seeks aid from wealthy Gulf countries

Sri Lankan Minister of Foreign Affairs Ali Sabry has held talks with ministers and senior officials in Saudi Arabia, as the crisis-hit island nation seeks to boost cooperation with the Kingdom and other Gulf countries.

Sabry met with his Saudi counterpart Prince Faisal bin Farhan, Secretary-General of Organization of Islamic Cooperation Hissein Brahim Taha, Secretary-General of the Gulf Cooperation Council Nayef Falah M. Al-Hajraf, and CEO of the Saudi Fund for Development Sultan Al-Marshad, as well as officials from the Islamic Development Bank.

Sabry said that his visit to the Kingdom was “successful and that it will further cement and strengthen the bilateral relationship between our two countries as we see a lot of positive vibes that have been infused into our relations.” Talks between the two foreign ministers covered enhancement of bilateral relations, increased investment with Sri Lanka as a gateway to South Asia, and employment for Sri Lankans in the Kingdom. “Saudis have identified Sri Lanka as a very important geographical location, so (there are) investment opportunities in renewable energy, petroleum and hospitality industries,” Sabry said. “We are interested in getting Saudi investment into the renewable energy sector for development, energy security and making Sri Lanka a regional energy hub.” Discussions also took place around resuming airline services between Saudi Arabia and Sri Lanka following their suspension during the global pandemic. In a bid to enhance trade and investment relations between both countries, the visiting minister “signed a double tax avoidance agreement with the Zakat and Income Tax Authority here” to prevent fiscal evasion on income.

Sri Lanka is facing its worst economic crisis since independence in 1948, with the government battling a shortage of foreign earnings, runaway inflation and recession. The Sri Lankan minister thanked the Kingdom for its help with debt restructuring at the International Monetary Fund and Paris Club. The Paris Club of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s currency crisis. Sri Lanka is also in discussions with the IMF to secure a $2.9 billion bailout seen as vital to getting its economy back on track.

“Sri Lanka and Saudi Arabia have been traditional friends for a long period of time. To strengthen bilateral relationship, particularly in the multilateral fora — the UN and other agencies — we have to support each other,” he said.  “They (Saudis) have been supporting us when we have been cornered unfairly by some powers for no reason. They have stood by us time and again. So we need to strengthen that relationship.” The Sri Lankan minister praised the Kingdom’s efforts in developing infrastructure in Sri Lanka through SFD projects.

The minister’s meeting with Al-Hajraf focused on ties between Sri Lanka and the GCC. “GCC is very important. We are looking at signing a framework agreement with the GCC, we want to expedite it as soon as possible,” Sabry said. On his discussions with Taha and OIC observer status, Sabry said: “They are exploring the possibility of observer status, but we haven’t made the decision yet. Traditionally, we have had good relationships.” Sabry also reassured Taha about the conditions of the Muslim community in Sri Lanka.

As "Vestnik Kavkaza" previously reported, economically, 2022 will rank as Sri Lanka’s worst year ever. The immediate reason for the year’s economic carnage was a balance of payments crisis. It was exacerbated by high debt, the COVID-19 pandemic, the Ukrainian situation, global central banks hiking interest rates and controversial policy decisions made by the Gotabaya Rajapaksa administration.