Sri Lanka ran out of dollars to import essentials in 2022, leading to the toppling of the country’s then-president.
| Photo Credit: AFP
Sri Lanka’s economic collapse was partly blamed on struggling high-debt Chinese mega-projects, but candidates in Saturday’s presidential election are banking on at least one of them to buck the trend.
The country suffered its worst financial meltdown in 2022, when it ran out of dollars to import essentials, sparking street protests that toppled the then-president Gotabaya Rajapaksa.
When the island nation plunged into chaos, CIA chief Bill Burns blamed its economic collapse on what he called “dumb bets” on Chinese-funded projects.
Colombo has since secured a $2.9 billion IMF bailout loan, but whoever is elected will face huge loans and interest accumulated since Sri Lanka defaulted on its $46 billion external debt.
All top three candidates are hoping a Chinese-funded real estate “Port City” development will woo much-needed foreign investors.
Port City bills itself as the “gateway to South Asia”, a special economic zone with tax breaks of up to 40 years. For now, it remains largely empty.
But Revan Wickramasuriya, the chief operating officer of the Port City Economic Commission, said the authorities expect to attract $12-$15 billion in foreign direct investment to construct buildings and set up hotels, housing, and a marina.
“This is an asset that has been created for Sri Lanka”, Mr. Wickramasuriya told AFP, underlining that “the government hasn’t borrowed a single dollar to reclaim this land.
“Now it is up to the government of Sri Lanka to actually take this asset and monetise it,” he added.
Published – September 19, 2024 07:50 am IST
