
Japan's infrastructure diplomacy in Sri Lanka outpaces China's
MARWAAN MACAN-MARKAR
COLOMBO -- Japan's decision to refinance the expansion of Sri Lanka's international airport -- a flagship project dogged by corruption and the country's recent fiscal meltdown -- has pushed it ahead of China in the South Asian nation's postcrisis recovery efforts.
The country's airport and aviation agency, Airport and Aviation Services, is reviewing bids submitted in March by prospective developers to upgrade the Bandaranaike International Airport (BIA), said official and diplomatic sources familiar with Tokyo's decision to reengage with Sri Lanka after lifting its earlier suspension of the loan.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Diplomat
2 hours ago
- The Diplomat
Malaysian PM Unveils New Measures to Address Rising Cost of Living
Anwar Ibrahim announced a 100-ringgit payment to all adult citizens, and a further reduction in the price of state-subsidized petrol. Malaysia's prime minister yesterday announced a series of measures to address the country's cost of living crisis, including a cash handout for all adult citizens and a small cut to the price of state-subsidized petrol. In a televised briefing, Anwar Ibrahim announced a one-time cash disbursement of 100 ringgit ($24) to all Malaysians aged 18 and above, which he said will be redeemable at more than 4,000 stores beginning on August 31. He added that the government will also freeze planned hikes in toll rates on 10 highways and increase its subsidies for RON95, the cheapest and most popular fuel, reducing the price from 2.05 ringgit ($0.49) per liter to 1.99 ringgit ($0.47). 'The government is sticking to its plan for targeted RON95 petrol subsidies with details to be announced end-September,' Anwar said, as per Bloomberg. 'What's certain is that just like the approach of targeted electricity subsidies, the government gives its assurance that ordinary citizens won't be affected. In fact let me announce that the RON95 petrol price will fall for citizens.' The cash handout is expected to reach around 22 million people and cost the government around 2 billion ringgit ($472 million),. The cost of living has become an increasing subject of popular concern in Malaysia in recent months, which Anwar's opponents have used to attack his government. As Reuters reported, yesterday's announcement came ahead of a protest that opposition parties plan to hold in Kuala Lumpur on Saturday, which will call Anwar to step down 'over escalating prices and a failure to deliver on promised reforms.' Police say that they expect between 10,000 and 15,000 people to attend the protest. 'I acknowledge the complaints and accept that the cost of living remains a challenge that must be addressed, even though we have announced various measures thus far,' Anwar said during yesterday's announcement, adding that more initiatives to aid those in poverty will be launched today. Yeah Kim Leng, an economics professor at Sunway University in Kuala Lumpur, told Al Jazeera that Malaysian households, especially low- and middle-income households, 'will welcome the cost-of-living relief provided by the measures.' Addressing the increasing prices of basic goods has been on Anwar's agenda since he took office in late 2022, but he has also sought to reduce the spiraling expense of Malaysia's elaborate system of cost-of-living subsidies, which cover everything from fuel and electricity to rice, flour, and cooking oil. These subsidies cost the Malaysian government around 64.2 billion ringgits ($15.2 billion) in 2023. Just weeks into his term, Anwar announced a plan to review the subsidies, to ensure that they primarily benefit those most in need, rather than all segments of society. He said at the time that the purpose of such support was 'to ease the burden of the poor and of course the rich and the industry should not be enjoying it.' In recent weeks, as Reuters reported, Anwar's administration has carried out a number of measures to boost government revenue. It has raised electricity tariffs on heavy users, including power-hungry data centers. It has also revised its sales tax and expanded the scope of its services tax, a move designed to 'strengthen the country's fiscal position by increasing revenue and broadening the tax base to improve the quality of the social safety net without burdening a majority of the people,' according to the Ministry of Finance. However, critics have voiced fears that higher costs would eventually flow down to ordinary citizens, including lower- and middle-income earners. At a political rally in Alor Setar on July 17, former Prime Minister Mahathir Mohamad called on Anwar to step down, citing his governance failures, in particular his mismanagement of the national wealth, which had caused hardship for the Malaysian public. 'Today, everyone has gathered here because we face the same problem – our country is wealthy, but the people remain poor. This is clearly the result of incompetent governance,' Mahathir said. Shortly after Anwar took office, I noted that 'tackling concrete cost-of-living challenges, which cut across ethnic and religious lines, is a good way of winning broad support for his multi-ethnic Pakatan Harapan coalition, and defusing claims that it is seeking to undermine Malay privileges.' Conversely, however, failing to address these concerns – or being perceived to fail – could leave Anwar politically vulnerable to attacks from the right-wing Malay populists of the opposition Perikatan Nasional coalition Anwar's premiership is not seriously under threat, but he may continue to struggle to balance the imperative of reducing cost-of-living pressures for ordinary people and maintaining the government's fiscal health.

Nikkei Asia
4 hours ago
- Nikkei Asia
Britain and India sign free trade pact during Modi visit
LONDON/NEW DELHI (Reuters) -- Britain and India signed a free trade agreement on Thursday during a visit by Indian Prime Minister Narendra Modi, sealing a deal to cut tariffs on goods from textiles to whisky and cars and allow more market access for businesses. The two countries concluded talks on the trade pact in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by U.S. President Donald Trump. The agreement between the world's fifth and sixth largest economies aims to increase bilateral trade by a further 25.5 billion pounds ($34 billion) by 2040. It is Britain's biggest trade deal since it left the European Union in 2020, although its impact will be a fraction of the effect of leaving the orbit of its closest trading partner. For India, it represents its biggest strategic partnership with an advanced economy, and one which could provide a template for a long mooted deal with the EU as well as talks with other regions. It will take effect after a ratification process, likely within a year. British Prime Minister Keir Starmer said the deal would bring "huge benefits" for both countries, making trade cheaper, quicker and easier. "We've entered a new global era, and that is one that requires us to step up, not to stand aside... by building deeper partnerships and alliances," Starmer said. Modi said the visit would "go a long way in advancing the economic partnership between our nations". They also agreed a partnership covering areas such as defence and climate, and said they would strengthen co-operation on tackling crime. Under the trade agreement, tariffs on Scotch whisky will drop to 75% from 150% immediately, and then slide to 40% over the next decade, according to the British government. On cars, India will cut duties to 10% from over 100% under a quota system that will be gradually liberalised. In return, Indian manufacturers will gain access to the UK market for electric and hybrid vehicles, also under a quota system. The ministry has said 99% of Indian exports to Britain would benefit from zero duties under the deal, including textiles, while Britain will see reductions on 90% of its tariff lines, with the average tariff UK firms face dropping to 3% from 15%. While it is Britain's biggest deal since Brexit, the projected boost to British economic output, of 4.8 billion pounds a year by 2040, is small compared to the country's gross domestic product of 2.6 trillion pounds in 2024. The Office for Budget Responsibility (OBR) has forecast that UK exports and imports will be about 15% lower in the long run compared with if Britain had stayed in the EU. In its first year in power, Britain's Labour government has launched a reset of ties with the EU in order to smooth trade friction, while also clinching some tariff relief from the United States and the India trade deal. "In an era of rising protectionism, today's announcement sends a powerful signal that the UK is open for business," said Rain Newton-Smith, the chief executive of the Confederation of British Industry. The India deal will also facilitate easier access for temporary business visitors, though visas are not covered. Britain and India also agreed to ensure workers no longer have to make social security contributions in both India and Britain during temporary postings in the other country. Under the trade deal, British firms will be able to access India's procurement market for projects in sectors such as clean energy, and it also covers services sectors such as insurance. India didn't succeed in its efforts to get an exemption from Britain's Carbon Border Adjustment Mechanism (CBAM) - which could levy higher taxes on polluters from 2027 - as part of the deal. Meanwhile, talks over a separate bilateral investment treaty are continuing.

Nikkei Asia
4 hours ago
- Nikkei Asia
Trump's Asia trade blitz fuels hope for US-China deal
U.S. and Chinese officials will meet in Stockholm for a third round of trade talks, starting July 28, possibly to extend their trade truce and resolve some of their differences. © Reuters STELLA YIFAN XIE HONG KONG -- U.S. President Donald Trump has announced tariff deals in recent weeks with major nations in Asia, from Japan to Indonesia, after months of uncertainty, fueling hope that trade tensions between the world's two biggest economies may soon ease. U.S. trade officials are scheduled to meet their Chinese counterparts for a third round of talks in Stockholm starting next Monday, where the deadline for a trade truce could be extended, U.S. Treasury Secretary Scott Bessent said Tuesday.