Sri Lanka to harness benefits from AIIB, moving away from WB, ADB

Sri Lanka is drawing up ambitious development project plans to harness maximum benefits from the newly launched Asian Infrastructure Investment Bank (AIIB), moving away from its dependence on the World Bank (WB), International Monetary Fund (IMF) and the Asian Development Bank(ADB), government officials said.

Deputy Secretary to the Treasury, Dr. B.M.S Batagoda told the Business Times that the new lend- er would fund the construction of roads, power plants and telecommunications networks in the country at concessionary terms and conditions without attaching strings which will keep the country’s economy buzzing.

The AIIB has a different focus than established multilateral financial institutions such as WB and ADB, and it is better for countries like Sri Lanka to have another Regional International Bank competing with multilateral devel- opment banks, he revealed.The WB and ADB will become more flexible in lending to emerging economies in South Asia due to the presence of the AIIB, he added.

He expressed the belief that Sri Lanka will be able to obtain necessary funding from AIIB which will be operational by 2015 for the next phase of Chinese assistance including international marketing of the infrastructure already developed, especially seaports, airports and highways making Sri Lanka a regional hub for aviation, shipping and logistics located at a strategic position in the silk route.

The new bank is expected to finance infrastructure projects along the “Silk Road Economic Belt” and the “Maritime Silk Road” re- establishment and Sri Lanka will become one of its beneficiaries as the island nation is one of the strategic partners of China, Sri Lankan diplomatic sources in Beijing said.

China has already set up a US$ 1.6 billion fund to take forward its ambitious “maritime silk road plan” to build ports and boost maritime connectivity with Southeast Asian and Indian Ocean countries.

The AIIB is an initiative by the new Chinese leadership that seeks a more equal and balanced development model in Asia. The total capital of the bank is $ 100 billion with the initial $50 billion capital pledged by China.