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LKI Foreign Policy Forum discusses ‘Debt Restructuring Outcome and Economic Diplomacy and Foreign Policy’
The 4th LKI Foreign Policy Forum, which highlighted the outcome of Sri Lanka’s debt restructuring and its impact on economic diplomacy and foreign policy, was held on July 11 at the Lighthouse Auditorium of the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI).
Sri Lanka’s imperative need to enact growth-oriented reforms particularly in governance, build consensus among all political parties on the reforms implemented and a foreign policy that leverages economic diplomacy, as well as modalities for sustained economic growth was emphasized.
Held on a quarterly basis, LKI’s flagship ‘Foreign Policy Forum’ brings together experts to discuss contemporary foreign policy issues and to contribute to the development of a Sri Lankan perspective on foreign policy and international relations. Moderated by Ambassador Ravinatha Aryasinha, Executive Director of LKI, the four-member panel included Dr. Ganeshan Wignaraja – Visiting Senior Fellow of the Overseas Development Institute, Duminda Hulangamuwa – Chairman of the Ceylon Chamber of Commerce, Talal Rafi – Economist and Expert Member of the World Economic Forum, and Subhashini Abeysinghe – Research Director of Verité Research.
Assessing the ramifications of the recent debt restructuring outcome, Ambassador Ravinatha Aryasinha said the proposed mechanisms and recommendations in the ‘IMF Sri Lanka Diagnostics Report’, could help overcome longstanding challenges experienced by Sri Lanka’s economic diplomacy due to internal bottlenecks – the absence of policy and regulation consistency, the allegation of lack of transparency and corruption, the need for a level playing field, the need for expansion of the basket of commodities and increasing the value added component in exports. He added that unblocking these, could prompt Sri Lanka’s external partners to also review their policies towards Sri Lanka – opening up markets, resuming aid projects, easing the adverse Organisation for Economic Co-operation and Development (OECD) credit rating and other indices, as well as relax the adverse travel advisories on Sri Lanka.
Dr. Ganeshan Wignaraja, Visiting Senior Fellow of the Overseas Development Institute (ODI) cautioned that Sri Lanka’s economic recovery is taking place in an era of uncertainty as the world enters a stage of geo-economic fragmentation. He stressed that the key to transformative growth lies in looking beyond the IMF programme and re-tuning for growth-oriented reforms within Sri Lanka. He warned that although successfully surviving the worst economic crisis in the country’s history, Sri Lanka’s economy remains fragile, and complete recovery demands that Sri Lanka reach consensus on a long-term reform agenda. He added that foreign policy will play a critical role in Sri Lanka’s economic recovery and emphasised the need to be “extremely surgical about our national interests and economic security.”
Duminda Hulangamuwa, Chairman of the Ceylon Chamber of Commerce, noted that a rise in the financial ratings of the country will cast a more positive outlook on the economy which will have a beneficial impact for the people of Sri Lanka. He added that the biggest contributor to kickstart Sri Lanka’s economy would be reviving stalled bilateral projects, which would increase circulation of currency in the market. He suggested capitalising on Sri Lanka’s potential as a shipping and logistics hub, greater investment in infrastructure tourism and an enhanced focus on the IT and BPO industry would contribute to accelerating economic growth towards complete recovery. He noted that discussions are ongoing with the government and opposition parties on the policy recommendations outlined in the recently published ‘Vision 2030’ policy document of the Ceylon Chamber of Commerce, with the hope that it would support reaching an economic consensus on the way forward
Talal Rafi, Expert Member of the World Economic Forum saw debt restructuring as providing the breathing space needed to implement critical reforms for a sustainable economy, until 2029. He stressed that the government in power should not become comfortable with the four years at hand before repayment obligations begin. He explained that, to succeed as India and Thailand did when undergoing economic reforms, Sri Lanka needs to accurately diagnose its problems and rely on the support of other nations.
Subhashini Abeysinghe, Research Director of Verité Research said debt restructuring is not the end, it is actually the beginning. She noted that even previously although there have been many efforts for reform, vested interests, corruption and weaknesses in governance have hindered the progress. She further stated that the debt restructuring period is a time for Sri Lanka to address these roadblocks, or else economic reforms will not succeed. She stressed that economic reforms cannot succeed without reforms in governance, and further that infrastructure development alone is not enough to achieve the growth Sri Lanka aspires for, and that institutional and regulatory reforms are crucial. She also called for a shift in attitudes, particularly towards foreign investment that requires international talent and investment, noting that Sri Lanka cannot afford to look at the world as a threat and must take hold of opportunities available through partnerships.
The question and answer session that followed focused on; the prospects of change through enacting the proposed Economic Transformation Bill, the need for restructuring existing State-Owned Enterprises (SOEs) that are not generating profits including Sri Lankan Airlines, the need for a clear, long-term FDI roadmap and establishment of a level playing field with transparency in procurement and in attracting investment consistent with the IMF Governance Diagnostic Assessment, and the need to de-politicise the reform process in order to ensure its sustainability. Furthermore, the doubling of poverty levels since the economic crisis, the need to increase spending on healthcare and education, and also to accelerate development in the agriculture sector to ensure food security were also discussed. In the context that exclusivity was sought by different external actors over the various timeframes, the importance of Sri Lanka maintaining a levelled ‘playing field’ and being even-handed in its engagements in economic diplomacy and foreign policy was emphasised. Participating in the discussion representatives of Foreign Missions including South Korea, EU and Canada also shared their experiences in restructuring and perceptions on the proposed reforms, while pledging their commitment to continue supporting Sri Lanka’s economic recovery. (LKI)
To catalyze bilateral trade and investment and drive regional economic integration, the Consulate General of Sri Lanka in Mumbai facilitated a series of high-level strategic engagements between The Ceylon Chamber of Commerce and leading Indian commercial institutions on May 13 and 14.
The delegation from The Ceylon Chamber of Commerce was led by its Chairman Krishan Balendra, CEO of John Keells Holdings Pvt Ltd and comprised a distinguished group of Sri Lankan industry leaders from Hirdaramani Group, Maliban Biscuit Manufactories (Pvt) Ltd, Sierra Cables PLC, A. Baur & Co. (Pvt) Ltd, Jetwing Travels (Pvt) Ltd, Ceylon Biscuits Ltd, Hayleys PLC, Vidullanka PLC, MAS India Clothing (Pvt) Ltd, Tudawe Brothers (Pvt) Ltd, David Pieris Holdings (Pvt) Ltd, Bank of Ceylon, Aitken Spence PLC, LTL Holdings Ltd. and Orel IT Pvt. Ltd.
On May 13, The Confederation of Indian Industry (CII) and The Ceylon Chamber of Commerce jointly hosted the ‘India–Sri Lanka Business Forum: Partnering in Sri Lanka’s Growth and Investment’ and an exclusive CEO interaction in Mumbai. The forum convened senior government officials, policymakers, and industry leaders from both countries.
These included, among others, High Commissioner of Sri Lanka to India Mahishini Colonne; Consul General of Sri Lanka in Mumbai Priyanga Wickramasinghe; Senior Economic Advisor to the President of Sri Lanka Duminda Hulangamuwa; Secretary (Protocol, FDI, Diaspora & Outreach) and Chief of Protocol Government of Maharashtra Rajesh Ravindra Gawande; Co-chairman, CII Western Region Sub-committee on International Trade & Investment and Chief Executive Officer, Polycab India Ltd. Anurag Agarwal; Chairman, CII Western Region Sub-Committee on Tourism and Hospitality and Executive Director, Kamat Hotels India Ltd Vishal Kamat and Secretary General & CEO of The Ceylon Chamber of Commerce Shiran Fernando.
Conversations centered on accelerating cross-border cooperation across high-priority sectors, including technology, manufacturing, healthcare, renewable energy, and digital transformation.
On May 14, the delegation engaged in productive Business-to-Business sessions with the IMC Chamber of Commerce and Industry, culminating in the formal renewal of the Memorandum of Understanding between The Ceylon Chamber of Commerce and IMC. The delegation also participated in an interactive session hosted by the World Trade Center (WTC) Mumbai and the All India Association of Industries (AIAI).
The two-day mission concluded with a robust exchange of views cementing a strong foundation for sustained bilateral collaboration and paving the way for a new era of industrial synergy between Colombo and Mumbai. (Consulate General of SL, Mumbai)
Demonstrating its commitment to supporting the nation’s next phase of economic transformation, Commercial Bank of Ceylon has become one of the first banks in Sri Lanka to enter into an agreement to establish a fully-fledged branch at Port City Colombo, marking a significant step in the Bank’s strategic expansion into the country’s emerging international financial hub.
The agreement was signed by Sanath Manatunge, Managing Director/CEO of Commercial Bank, and Xiong Hongfeng, Managing Director of CHEC Port City Colombo (Pvt) Ltd. The partnership further reinforces Commercial Bank’s position at the forefront of Sri Lanka’s evolving financial landscape.
The proposed branch will function as a fully-fledged banking branch, offering a full spectrum of products and services tailored to the needs of corporates, investors, businesses and retail customers operating within the Port City Colombo ecosystem. These will include digital banking facilities, trade services, foreign currency transactions, corporate banking solutions, deposits, lending, card services and remittance facilities.
By establishing a presence within Port City Colombo, the Bank said it aims to further strengthen its ability to support cross-border business and investment flows while positioning itself to meet the sophisticated requirements of global investors, multinational corporates and high-net-worth individuals expected to operate within the Special Economic Zone.
Commenting on this ground breaking initiative, Sanath Manatunge, Managing Director/CEO of Commercial Bank said the Bank’s decision to establish a fully-fledged branch within Port City Colombo reflects both its long-term confidence in the project and its readiness to support the evolving needs of a globally integrated financial ecosystem.
“As Sri Lanka’s largest private sector bank with a strong track record in serving corporates, international clients and high-value businesses, we see Port City Colombo as a pivotal development in the country’s economic future,” he said. “Our presence within this Special Economic Zone will enable us to seamlessly support cross-border transactions, facilitate international trade and investment, and deliver world-class banking solutions backed by advanced digital capabilities. Being one of the first banks to formalise plans for a full-service branch within Port City Colombo reaffirms our role as a pioneer in driving financial innovation and supporting national development.”
A 269-hectare extension of Sri Lanka’s central business district, Port City Colombo is being developed as a multi-service Special Economic Zone designed to serve as a regional financial centre, business and lifestyle hub. One of the largest public-private partnership projects in the country, it is envisioned as a catalyst for high-value investments, underpinned by advanced infrastructure, cutting-edge technology and a progressive regulatory framework.
“Our role as master developer goes beyond building the city itself. It is about creating the foundations for a functioning international business and financial hub,” said Mr Xiong Hongfeng, Managing Director of CHEC Port City Colombo (Pvt) Ltd. “The establishment of institutions such as Commercial Bank within Port City Colombo is an important part of that process, because it brings real operational depth and credibility into the ecosystem from an early stage. It reflects the broader momentum behind the project and the growing shift towards a more globally connected, investment-driven economy in Sri Lanka.”
Sri Lanka’s renowned specialty tea brand “Singharaja Wiry Tips,” produced by Lumbini Tea Valley Ceylon, has won two major accolades at the prestigious “The Leafies International Tea Awards” held recently at Fortnum and Mason in the United Kingdom.
The award-winning low-grown Ceylon tea secured the titles of “Best Ceylon Black Tea” and the overall “Best of All Black Teas,” emerging as the top black tea entered at the international competition.
With these latest honours, “Singharaja Wiry Tips” has now earned its 43rd and 44th international awards, further strengthening its reputation as one of the world’s most highly awarded black teas.
Classified as FBOPF EX SP (Flowery Broken Orange Pekoe Fannings Extra Special), the tea is named after its distinctive golden-tipped wiry leaves and unique flavour profile derived from the ecosystem surrounding the UNESCO World Heritage-listed Singharaja Rainforest, which borders the Lumbini plantation.
Lumbini Tea Valley’s latest innovation, “Lumbini Screw Buds,” also received high commendation at this year’s competition, highlighting the company’s continued excellence in producing premium Ceylon teas.
Chairman and Managing Director Chaminda Jayawardena, who accepted the awards in London, credited the achievement to the dedication of the Lumbini workforce and the support of nearly 1,800 tea farmers supplying high-quality green leaf harvested using the traditional “two leaves and a bud” method.
by SK Samaranayake
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