India, Japan collaborate to put Sri Lankan economy back on track

India and Japan are collaborating to put Sri Lanka on a sustainable growth trajectory, pointed out a new report by Pathfinder, leading Lankan think-tank founded by Colombo’s current envoy to New Delhi Milinda Moragoda.

This report is presented at a time when Sri Lanka is facing an unprecedented economic crisis that has caused a significant socio-economic setback in the country, with rising unemployment, rocketing inflation and increasing poverty.
The report has proposed an increase in India-Japan collaboration with Lanka to pull the country out of the crisis that has also been caused by Chinese debt.

The report was released in the presence of Japanese ambassador Mizukoshi Hideaki and Indian high commissioner Gopal Baglay in Colombo this week.

On the occasion, the Indian high commissioner said India and Japan share wide-ranging interests in a peaceful, progressive and prosperous Indo-Pacific, and the Japanese prime minister recently visited India and outlined his vision for a free and open Indo-Pacific.

Asserting that Sri Lanka is an important member of the Indian Ocean Rim Association (IROA) countries, he said there is a great deal of opportunity for India, Japan and Sri Lanka to work together for the prosperity of people here and the benefit of all sides.

This should be in accordance with the priorities of Sri Lanka, Baglay said.

The Japanese ambassador said over the years, Japan and India have had a positive impact on the region.

“I believe that connectivity is the best area to showcase how two countries can bring tangible benefits to the entire region including Sri Lanka. To this end, perspectives and insights from countries in the region are critical, and this report precisely addresses that," he said, adding that during Japanese Prime Minister Fumio Kishida's recent visit to India, the two leaders exchanged views on cooperation with Sri Lanka and agreed to work closely together, including on Sri Lanka's debt issue.

“As for the debt issue, on March 20, the IMF executive board green lighted the Extended Fund Facility to Sri Lanka. Japan highly values this as a significant step forward for the revitalisation of the Sri Lankan economy. Japan also appreciates India's letter of financial assurance in January. I am confident that Japan and India will continue to contribute to Sri Lanka's economic development, utilising our expertise and complementarity," he said.

“I sincerely hope that this year will be the beginning of an economic revival and a springboard for further development for Sri Lanka. I believe that Sri Lanka could greatly benefit from India, a regional economic power with a large market, and Japan, a long-standing partner in Sri Lanka's socio-economic development, for its medium-to-long-term economic development,” the Japanese ambassador said.

Japan has been one of Sri Lanka’s top donors and development partners for over five decades but its grants and investments have received much less attention compared to those from China.