A boost to the economy
President Mahinda Rajapaksa has returned to the island after a
highly successful visit to Iran. It can be described as one of
the most beneficial State visits undertaken to any country by a
Lankan Head of State in recent times.
Iran has pledged an unprecedented US$ 1.5 billion in aid for
mega development projects in Sri Lanka, which in itself is
indicative of the very close ties between the two countries.
This will be a major boost to the economy.
The development plans include the modernisation of the oil
refinery and several irrigation schemes. The Iranian President
will be in Sri Lanka next year in connection with these
These are essential development projects that will cost millions
of dollars. Thus the infusion of Iranian aid will be a major
boost for he country’s development drive.
The Treasury alone cannot fund all development and welfare
projects due to budgetary constraints and foreign assistance can
be invaluable in such instances.
Iran and Sri Lanka have also set an example to all Third World
countries that they do not necessarily have to turn to the West
for aid. It is a fine example for South-South cooperation, which
is increasingly relevant in a globalised world. After all, it is
well known that many First World countries impose various
conditions on their aid, some of which may not be practical in a
Third World context.
Certain forces were not pleased with President Rajapaksa’s
high-profile State visit to Iran. In that context, the
President’s visit to Iran assumed more significance as it opened
a new chapter in the centuries old friendship and relations
between the two countries. Iran has also pledged its fullest
support to Sri Lanka’s peace efforts.
There are many ways in which Sri Lanka can benefit from Iran’s
assistance and expertise. Iran’s expertise in the oil industry
would be of immense help to Lanka which is about to embark on
oil exploration in the Mannar Basin next year.
The expansion of the crude oil refineries, which can only supply
half of the country’s requirement at the moment, will help save
millions of dollars. The stoppage of refined petrol and diesel,
which cost much more than crude, will alone account for a
substantial foreign exchange saving.
The importance of developing the country’s irrigation system has
been stressed repeatedly. Bilateral talks between President
Rajapaksa and Iranian President Mahmoud Ahmedinejad have focused
on the Uma Oya project, which will benefit thousands of farmers.
Iran, though not primarily an agricultural country, has a
reputation for implementing major agricultural engineering
The two leaders also discussed railways development for which
Iranian assistance would be useful as there is plenty of room
for expanding Sri Lanka’s rail service. Likewise, the MoU signed
on the power sector will be important as Sri Lanka plans to
increase the power generation capacity to meet the rising
The Sri Lankan tea industry will also have every reason to be
pleased as Iranian leaders have pledged to import more tea from
Sri Lanka. This is a golden opportunity for the Lankan tea
industry to promote new varieties of the beverage in Iran. The
establishment of Ceylon Tea Centres in major Iranians should be
considered in earnest.
The President also appealed to the Iranian business community to
invest in Sri Lanka, outlining the concessions and incentives
granted to them. Iran has already held a number of highly
successful trade fairs in Sri Lanka and Iranian companies
regularly participate in shopping fairs in Colombo. The next
logical step would be establishing Iranian companies here that
can empower local youth and enrich the local economy.
We hope more Iranian companies would come forward to invest in
Lanka following the President’s invitation.
An increase in the trade volume could also be expected following
the President’s visit. Iran and Sri Lanka should work towards
the signing of an economic partnership to improve their trade
The most important aspect of a bilateral relationship is
people-to-contact. The tourism pact signed by Iran and Sri Lanka
can go a long way towards promoting tourism between the two
countries. The two countries should explore the possibility of
having direct flights between Colombo and Tehran. The forging of
mutual bonds among the two peoples will pave the way for an even
more vibrant relationship.
We hope the international community would take serious note of
the call by Iran and Sri Lanka to make the Middle East a nuclear
free zone. Peace in the Middle East and indeed, the whole world
is the need of the hour.