Colombo, April 12: Given its uneasy relations with China on account of the controversial deal over the US$ 1.4 billion Hambantota port, Sri Lanka is trying to checkmate the Asian giant by cultivating Japan and India.
Prime Minister Ranil Wickremesinghe on Tuesday urged Japan to take the lead in ensuring maritime security and economic development in the Indo-Pacific region, given the fact that the US is gradually withdrawing from this region.
Earlier, Wickremesinghe got the cabinet to endorse a wide ranging MOU with India, under which a plethora of Joint Ventures will be set up in the power, petroleum, highways and railways sectors.
With both Japan and India keen on investing in Sri Lanka and ensuring unfettered maritime navigation, the response to Wickremesinghe’s proposals is expected to be favorable.
Delivering the keynote address at the business forum organized by the Japan External Trade Organization (JETRO) in Tokyo on Tuesday, Wickremesinghe welcomed Japanese Prime Minister Shinzo Abe’s ‘Free and Open Indo-Pacific Strategy’ which seeks to promote connectivity through a free and open Indo- Pacific ocean, thereby ensuring economic prosperity in the region.
“Japan has become more important now as America shows reluctance to be involved in economics of the region, especially with its withdrawal from the Trans Pacific Partnership,” Wickremesinghe said.
He hailed Japanese Prime Minister Abe’s USD 110 billion contribution to the Asian Development Bank to build “quality infrastructure” in Asia.
But he stressed the need for a “comprehensive plan of implementation” in the light of other regional powers also having their own strategies for the region such as China’s ‘One Belt, One Road’ initiative and India’s ‘Look East Policy’.
Wickremsinghe told Japanese businessmen that Sri Lanka is the most suitable country for them to focus on, given its strategic location in the Indian Ocean and the access the country would provide to bigger markets through its various existing and future Free Trade Agreements (FTAs).
“We want Japan to use Sri Lanka as a hub for trade. We expect to deepen our existing FTA with India through the Economic and Technology Cooperation Agreement (ETCA), expect to sign FTAs with Singapore and China. We also hope to talk to Japan, Indonesia and other ASEAN countries with regard to FTAs,” the Prime Minister said.
With Sri Lanka also poised to become a logistics hub, the Prime Minister invited Japanese investment in the Colombo and Trincomalee Ports.
“The new Terminal at Colombo will soon be open for investment. We invite Japanese companies for a joint venture. We also hope to further expand Colombo Port to the North up to 8—10 miles reaching Ja-Ela, making it the largest in the Indian Ocean. In addition, we have invited Japan to partner with India to develop the Trincomalee harbor,” he said.
Sri Lanka and India have tentatively agreed to set up joint venture to establish a Liquefied Natural Gas (LNG)-fired 500 MW capacity power plant as well as an LNG Terminal/Floating Storage Regasification Unit (FSRU) in Kerawalapitiya. Other power plants will also be converted to LNG.
A 50 MW (extendable to 100 MW) Solar Power Plant will be set up in Sampur. A Joint Venture to develop the Upper Tank Farm in Trincomalee comprising 84 giant oil tanks will be set up. A land lease agreement for 50 years in favor of Lanka Indian Oil Corporation (LIOC) Ltd will be inked.
Joint investments will be made in the development of the Trincomalee port, a petroleum refinery and other industries there. Industrial Zones or Special Economic Zones in identified locations will be set up in other parts of Sri Lanka as well.
The Dambulla-Trincomalee, Mannar-Jaffna and Mannar-Trincomalee roads be converted into highways with Indian help. The railway sector will be improved with track upgrading and new rolling stock. Indian companies will be encouraged to invest in a container terminal in Colombo Port, considering the fact that 70 % of the port’s trans-shipment business is with India.
These deals are expected to be signed when Indian Prime Minister Narendra Modi visits Sri Lanka on May 12. But the left-nationalist Janatha Vimukthi Peramuna is against the handing over the ports and the oil tanks to India.
(The featured picture at the top shows Sri Lankan Prime Minister Ranil Wickremesinghe being greeted by his Japanese counterpart Shinzo Abe)