Sri Lanka is no longer dependant on small foreign aid packages from multilateral bodies such as the World Bank, amounts which are "peanuts" in comparison to what the country receives from India and China; according to the country's Deputy Minister of Finance, Dr. Sarath Amunugama.
Further, aid from China is not dependent on factors such as education and similar criteria, which historically showed lots of wastage on projects carried out by multilateral agencies in Sri Lanka, but rather the country's ability to pay. As such, the Export Import Bank of China analyses projects in as detailed a way as a commercial bank, with a view towards short term growth and results. Dr. Amunugama also revealed that Asian countries where now the main foreign aid donors for Sri Lanka, with over a billion dollars in aid received from China as well as significant amounts coming in from India and Japan. Sri Lanka was no longer focused on European or US aid. However, he did concede that it was time to re-engage and re-establish links with European countries in this regard. He also opined that the secret to fast growth was an emphasis on infrastructure, and especially for Sri Lanka ports, as well as financing these projects using domestic savings and foreign assistance.
Dr. Amunugama's comments were made at the inaugural session of the two-day "International Conference on Policy Priorities for Foreign Aid Reform in South Asia" held this week in Colombo. Organised by the country's Institute of Policy Studies (IPS) and the local office of Germany's Friedrich Ebert Stiftung (FES), this conference featured delegations from Bhutan, the Maldives, Afghanistan, Pakistan, Sri Lanka, Nepal, India and Bangladesh.
Further, in his welcome message, IPS Executive Director Dr. Saman Kelegama noted that this conference was convened to facilitate open dialogue between all stakeholders of the foreign aid process as well as third parties such as academics, etc. This was with the view to overcome problems such as in Sri Lanka where there have been issues with targeting aid effectively.
He also advocated the exploration of and support of alternative forms of finance for development, such as domestic resource mobilisation and commercial markets. Meanwhile, according to the Advisor to the President on Foreign Affairs and former SAARC Secretary General, Nihal Rodrigo; the port in Hambantota which is being constructed with foreign aid from China is ideally located to benefit from close by sea lanes which are used for 80% of China’s oil and 50% of India’s energy. He also noted that the SAARC development fund was benefitting “enormously” from India.
It was also noted by FES Resident Representative Joachim Schluetter that, while aid was vitally important to developing countries, the possibility of it reaching in time to prove most effective was unlikely. |
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