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Tuesday, July 5, 2022

Crisis-hit Sri Lanka to seek ‘huge’ investment from Middle East

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COLOMBO: Sri Lanka will seek investment from Middle Eastern countries, particularly in the petroleum sector, its new environment minister has said, as the island nation confronts its worst economic crisis in memory.

Unable to pay for imports, Sri Lanka has been enduring shortages of food, fuel, medicines and other essentials for months.

While the government negotiates a bailout package with the International Monetary Fund, the country officially defaulted on its debts last week. It must repay about $25 billion in foreign loans by 2026, but the finance ministry said earlier this month that its usable foreign reserves had plummeted to $25 million.

Naseer Ahamed, who on Tuesday assumed duties as environment minister and also oversees Middle Eastern affairs, told Arab News that his immediate priority was to attract “some huge strategic investment” and to request a loan from Saudi Arabia and other countries in the Gulf for the purchase of petroleum products.

“Sri Lanka is looking at getting a long-term credit facility for the supply of crude oil, gas oil, gasoline, jet A-1 and energy gas to tide over the present crisis,” the former student of King Fahd University of Petroleum and Minerals in Dhahran, Saudi Arabia, said. “If we can get that support from Middle Eastern countries, I am sure that we can overcome this financial crisis.”

Foreign inflows are crucial for Sri Lanka, where the devastating economic crisis — the worst since independence in 1948 — has triggered widespread demonstrations across the country since March.

The Middle East is also important for the island nation as a major source of remittances, as it is home to one million Sri Lankan nationals — 66 percent of the country’s migrant workers.

“They bring home the largest percentage of the $7 billion remitted to our national coffers,” Ahamed said. “What I am looking at is to further strengthen the relationship.”

The former chief minister of Sri Lanka’s Eastern Province is also planning to pursue environmental cooperation with Saudi Arabia, especially under its Saudi Green and Middle East Green initiatives launched last year to reduce carbon emissions.

“Since the launch of Vision 2030 in 2016, the Kingdom has taken significant steps to scale up its climate action and environmental protection,” Ahamed said.

“Now that I have taken the Ministry of Environment, we will explore how best Saudi Arabia and Sri Lanka cooperate with each other in the successful implementation of the Saudi Green initiatives.”

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