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Pakistan extends $50mn line of credit for defence to Sri Lanka

Pakistan's Prime Minister Imran Khan and his Sri Lankan counterpart Mahinda Rajapaksa during a Trade and Investments conference in Colombo (AFP)Premium
Pakistan's Prime Minister Imran Khan and his Sri Lankan counterpart Mahinda Rajapaksa during a Trade and Investments conference in Colombo (AFP)

  • The Pakistani delegation invited Colombo to use its Gwadar port, part of the multi-billion dollar CPEC, for trade with China and Central Asia
  • Interestingly, Pakistan’s extension of the line of credit comes close on the heels of India extending $ 50 million line of credit to neighbouring Maldives

New Delhi: Pakistan has extended a $ 50 million line of credit for defence to Sri Lanka, a joint statement issued by the two sides said Wednesday, at the end of a two day visit to Colombo by Pakistan’s prime minister Imran Khan.

During the visit, the Pakistani delegation also invited Colombo to use its Gwadar port – part of the multi-billion dollar China-Pakistan-Economic Corridor (CPEC) -- for trade with China and Central Asia.

This is Imran Khan’s second visit to a country in Pakistan’s neighbourhood. Last year in November he had visited Afghanistan. For Sri Lanka, the visit is the first visit by a head of government since the covid-19 pandemic erupted last year. The visit is also important for Colombo coming as it does as Sri Lanka is bracing for the United Nations Human Rights Commission in Geneva to slam it for alleged war crimes carried out in the last phases of the civil war in 2008-09.

Sri Lanka had also caused a major flutter in the Islamic world by saying that Muslims who have died due to covid-19 cannot be buried but their bodies needed to be cremated. This was later withdrawn.

“Both sides expressed satisfaction at the existing bilateral cooperation in the field of defence and noted that the elevation of staff-level talks to Defence Dialogue has further provided an opportunity to expand security sector relations," a joint statement issued at the end of Khan’s visit said on Wednesday.

“Prime Minister Imran Khan announced a new $50 million defence credit line facility. The two sides stressed the need for stronger partnership for supporting and coordinating with each other in dealing with matters related to security, terrorism, organized crime and drug and narcotic trafficking as well as intelligence-sharing," the statement added.

Interestingly, Pakistan’s extension of the line of credit to Sri Lanka comes close on the heels of India extending $ 50 million line of credit to neighbouring Maldives for strengthening navy capabilities and $100 million to Mauritius for shoring up coastal defences.

Earlier in the day, at a business meet that was attended by Khan and Sri Lankan prime minister Mahinda Rajapaksa, Pakistan’s Abdul Razak Dawood, adviser to the Pakistan prime minister on Commerce and Investment said that Pakistan had trading agreements with Afghanistan and Uzbekistan as it had with Sri Lanka. Uzbekistan had offered Pakistan a land port to send Pakistani goods onwards to Central Asia, he said. “Why should we not do the same ...open a facility at Gwadar" to facilitate exports of Sri Lankan goods to Central Asia, Dawood said.

The Gwadar port is connected to China’s Xinjiang province by the CPEC which in turn is a strand of the ambitious multi-billion dollar Belt and Road Initiative launched by China in 2013.

“In the context of regional connectivity, Prime Minister Imran Khan highlighted the opportunities presented by China-Pakistan Economic Corridor (CPEC), a flagship project of BRI, for regional economic growth and prosperity," the joint statement said.

The development comes as India is trying to get work restarted on Chabahar port in Iran which New Delhi sees as a route to landlocked Central Asia and Afghanistan bypassing Pakistan. Chabahar is situated in Sistan and Baluchestan province in south Iran on the Gulf of Oman. Pakistan’s Gwadar is about 70 kilometers to the west along the coast. Afghanistan is connected to the port through its land border with Iran, and India via the sea. The first phase of Chabahar port was inaugurated in December 2017. India’s plans to develop the port, first made public in 2003, had run aground repeatedly due to the waxing and waning of tensions between the US and Iran.

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