Japan and China have played a crucial role in shaping Sri Lanka’s infrastructure through various large-scale projects. Recently, Sri Lanka announced the revival of multiple stalled projects funded by these two nations, marking a significant step toward economic recovery.

Debt Restructuring and Project Revival

In March 2025, Sri Lanka and Japan finalized an agreement to restructure $2.5 billion of Sri Lankan debt. This restructuring has paved the way for resuming major development projects, including the expansion of Sri Lanka’s primary airport. 

The country’s financial crisis had led to a foreign debt default in April 2022, bringing many projects to a halt. However, with this agreement, Sri Lanka is on a path toward stability and progress.

Under the new administration, at least 87 foreign-funded projects have restarted. President Anura Kumara Dissanayake confirmed this as Sri Lanka declared itself free from bankruptcy following its debt restructuring completion by the end of 2024.

 He emphasized that due to sound economic policies, the government has successfully revived 11 Japanese-funded and 76 Chinese-funded projects that were previously suspended.

Economic Policies and Stability

Speaking at the 26th anniversary of the Chamber of Young Lankan Entrepreneurs (COYLE) in Colombo, President Dissanayake highlighted that the 2025 budget aims to foster a more dynamic and resilient economy. 

By focusing on economic mobility, the government seeks to promote sustainable growth without causing significant economic disruptions. Additionally, policies are being crafted with consideration for the Sri Lankan Rupee’s stability and in line with International Monetary Fund (IMF) recommendations.

The President also underscored that trust in Sri Lanka’s economy had eroded due to past mismanagement but affirmed that decisive actions have restored confidence, helping the nation recover from its bankruptcy status.

Key Infrastructure Projects

Colombo Light Rail Transit (LRT) Project: Originally launched in 2017 with $1.5 billion in funding from the Japan International Cooperation Agency (JICA), this initiative aimed to enhance urban mobility in Colombo. 

However, the Sri Lankan government terminated it in 2020, leading to financial losses and diplomatic strains. Although discussions about its revival have taken place, Japan has yet to recommit, pending further economic reforms from Sri Lanka.

Samanalawewa Hydroelectric Power Project: Commissioned in 1992 with support from Japan and the UK, this hydroelectric facility generates approximately 405 GWh annually. Despite technical issues such as a leak in the dam’s right bank, it continues to be a vital contributor to Sri Lanka’s power grid.

 Chinese-Funded Developments

Colombo Outer Circular Expressway (E02): Spanning 29 km, this expressway connects key transportation routes and alleviates congestion in Colombo. It was constructed in phases, with significant input from Chinese firms.

Port Development Initiatives: China has played a major role in Sri Lanka’s port infrastructure development, particularly in projects like Hambantota Port and Colombo Port City, as part of the Belt and Road Initiative. However, concerns persist over debt sustainability and the strategic implications of heavy borrowing.

Balancing Geopolitical Interests

Sri Lanka’s location in the Indian Ocean has made it a focal point for both Japanese and Chinese investments, each driven by distinct geopolitical interests. Japan typically provides development aid and infrastructure funding under favorable terms, focusing on transparency and sustainability.

 In contrast, China’s large-scale investments have rapidly transformed Sri Lanka’s infrastructure but have also raised concerns about debt dependency and sovereignty.

The Sri Lankan government faces the challenge of managing these partnerships strategically, ensuring that economic development rem

 By carefully navigating its relationships with Japan and China, Sri Lanka aims to optimize economic benefits while maintaining financial and political stability.

this The Sri Lanka Bureau of Foreign Employment (SLBFE), responsible for facilitating overseas employment, has once again come under scrutiny for rampant corruption and unethical practices. Recent revelations by the Committee on Public Enterprises (COPE) have exposed systemic exploitation within the institution, including the alarming case of 683 minors being illegally sent abroad as domestic workers using forged documents between 2024 and the present. This period coincides with Manusha Nanayakkara’s tenure as Labour Minister.

Despite repeated corruption exposés, the government’s response has often been reactive rather than proactive. Following the tragic 2013 execution of Rizana Nafeek, an underage girl sent to Saudi Arabia with forged documents, authorities introduced stricter verification processes and legal measures to prevent such incidents. However, these measures have failed to curb corruption within SLBFE, which continues to facilitate the illegal migration of vulnerable individuals.

The COPE investigation revealed a sophisticated network of corruption involving SLBFE officials, employment agencies, training centres, and even the Passport Office. Fraudulent skill certificates were issued to minors, allowing them to bypass employment regulations. Some agencies reportedly conducted interviews using pre-recorded videos, further undermining proper vetting procedures.

Moreover, 28,165 first-time migrant domestic workers were sent abroad without completing the mandatory residential training, resulting in a revenue loss of Rs 631.1 million. The SLBFE also allowed 4,942 domestic workers to travel on tourist visas, bypassing legal employment channels and leaving them vulnerable to abuse and exploitation.

The issue extends beyond financial misconduct. Reports indicate that SLBFE officials stationed at Sri Lankan missions abroad have been implicated in the exploitation of workers for money and even sexual abuse. Many workers who ended up stranded in shelters overseas had been victims of this corrupt system, further highlighting the agency’s failure to protect its citizens.

A shocking revelation by COPE also pointed to 900 employment agencies being linked to the fraudulent certification and illegal recruitment of underage workers. Some agencies charged vulnerable individuals as much as Rs 75,000 for forged certificates, falsely certifying them as experienced workers.

SLBFE Chairman Kosala Wickramasinghe acknowledged the COPE findings, admitting that underage workers had likely been sent overseas through falsified documentation. He stressed that internal investigations are underway and that corrupt officials within the SLBFE and affiliated agencies would be held accountable. Wickramasinghe also stated that political interference in the SLBFE has been curbed under the current administration and that a restructuring process is in progress.

To tackle these issues, the government aims to reduce the deployment of domestic workers to the Middle East, shifting focus toward technical and professional job categories. Additionally, Wickramasinghe has launched the ‘Talk to Chairman’ initiative, allowing the public to report corruption directly via WhatsApp and email.

 As investigations continue, the pressing question remains: Is the SLBFE merely mismanaged, or is it a hub of deliberate exploitation? The findings suggest the latter, with a deeply entrenched system of corruption enabling the abuse of Sri Lanka’s most vulnerable job seekers.

Sigiriya, a renowned historical and cultural site in Sri Lanka, has been awarded the Bronze Certificate for sustainability by Green Destinations International at ITB Berlin, the world’s largest tourism fair. This recognition places Sigiriya among global destinations committed to environmental conservation and sustainable tourism.

Sri Lanka Tourism Chairman, Buddhika Hewawasam, emphasized that this achievement is a significant milestone for the country’s tourism sector, enhancing its global reputation. 

Foreign Affairs, Foreign Employment, and Tourism Deputy Minister, Prof. Ruwan Ranasinghe, expressed his excitement over the recognition, describing the award as a testament to Sri Lanka’s dedication to sustainable tourism. 

He highlighted that Sigiriya, a UNESCO World Heritage site, is not only an archaeological marvel but also home to diverse wildlife, including wild elephants, making it a prime attraction for visitors.

The Deputy Minister further stated that such accolades help in promoting Sri Lanka as a travel destination rich in history, natural beauty, and responsible tourism practices.

 He reiterated the government’s commitment to preserving the nation’s heritage and fostering sustainable travel initiatives for a greener future.

Chairman Hewawasam also pointed out that the recognition provides an opportunity to boost tourist arrivals, particularly from Germany, a key market for Sri Lanka. 

He aims to attract at least 200,000 German visitors in 2025, reinforcing Sri Lanka’s status as a premier travel destination. Increased charter flights and targeted marketing campaigns are expected to support this goal, ensuring a stronger presence at ITB Berlin 2025.

Upali Ratnayake, Deputy Director General and Head of Sustainable Tourism at the Sri Lanka Tourism Development Authority, credited the award to the collaborative efforts of local communities and tourism officials. He noted that the recognition reflects the country’s proactive approach to conservation and climate action, demonstrating a long-term commitment to sustainability.

Sri Lanka’s Ambassador to Germany, Varuni Muthukumarana, highlighted the growing interest in Sri Lanka, particularly in wellness tourism. She emphasized the appeal of Ayurveda and traditional healing practices, such as ‘Hela Wedakama,’ which continue to attract European travelers seeking authentic and holistic experiences.

Dushan Wickramasuriya, Sri Lanka’s Tourism Marketing Director, stated that the country is shifting its focus from conventional tourism to eco-tourism. He underscored the need for the hospitality sector to embrace green tourism initiatives, aligning with global trends and sustainability goals.

The Green Destinations Certification program evaluates sustainability across 75 criteria based on GSTC-recognized green standards. Sri Lanka, along with 14 other destinations, achieved green status for 2025 at the ITB Berlin ceremony, attended by key tourism industry leaders worldwide. 

This recognition solidifies Sri Lanka’s position as a responsible and eco-conscious travel destination, committed to preserving its cultural and natural heritage for future generations.