U.S. – SRI LANKA ENGAGEMENT: Reviewing Robust Relations

By Indoosan Shanthakumaran

In recent years, the relationship between the United States and Sri Lanka has witnessed a substantial transformation, transitioning from conventional foreign aid to a more comprehensive partnership that encompasses economic, environmental, and human rights initiatives to help Sri Lanka come out of the bankruptcy. The United States supported Sri Lanka's development objectives, reconciliation efforts, and regional connectivity through multifaceted collaborations between 2022 and 2024. This article investigates the numerous methods by which the United States assisted Sri Lanka in its development, resulting in enduring effects that surpass financial aid.

Fostering Economic Growth and Governance

The United States Agency for International Development (USAID) signed a defining five-year Development Objectives Assistance Agreement (DOAG) with Sri Lanka in 2022. This agreement facilitated market-driven growth, environmental sustainability, and improved governance. The U.S. actively supported stabilization efforts in Sri Lanka, including aiding in debt restructuring processes and supporting Sri Lanka's engagement with the International Monetary Fund (IMF), in recognition of the country’s economic challenges. By means of these initiatives, the United States promoted private-sector investment, anti-corruption measures, and reforms that are indispensable for long-term economic resilience, transcending financial assistance.

Investing in Sri Lanka

U.S. companies exhibited a fluctuating yet substantial interest in investing in Sri Lanka from 2022 to 2024. The total stock of US Foreign Direct Investment (FDI) in Sri Lanka was valued at $234 million in 2022. IFS (Industrial and Financial Systems), an IT services firm based in the United States, has maintained a substantial presence in Sri Lanka for many years. The company has recently declared its intention to expand its operations in Colombo, citing the country’s highly skilled tech workforce. In that year, the total U.S. Foreign Direct Investment (FDI) stock in Sri Lanka reached $234 million as a result of this expansion. Despite the country's economic instability at the time, several U.S. apparel brands, including Gap and Nike, increased their procurement from Sri Lanka in 2023. However, direct FDI in new facilities was cautious. Nevertheless, Coca-Cola Beverages Sri Lanka Ltd and other organisations maintained their operations and implemented sustainability initiatives, suggesting that there was a persistent interest.

Investor confidence began to slightly improve by 2024 as Sri Lanka made progress in debt restructuring and economic stabilisation. This prompted smaller U.S. tech startups and healthcare companies to investigate joint ventures and partnerships with local firms. Sri Lanka's greatest export market was the United States, despite the fact that it experienced a severe financial crisis in 2022, which resulted in a contraction in GDP and shortages of essential goods.

Foreign investment in Sri Lanka was approximately $730 million in 2023, despite the fact that it was historically lower than that of other comparable countries. The International Development Finance Corporation (DFC) of the United States has allocated up to $553 million in financing for the expansion of the Colombo West International Terminal. This commitment indicates the government's confidence in the private sector's development in Sri Lanka.

The Sri Lankan government’s emphasis on anti-corruption measures and political changes resulted in a notable resurgence in US investment interest by late 2024. The American engineering technology group Transdigm Group invested $8.5 million in a joint venture to establish a manufacturing facility in Sri Lanka, thereby relocating its SHIELD operations from China. This investment is a notable example. This action was perceived as a testament to the increasing interest of the United States in investing in Sri Lanka, particularly in light of the government's initiatives to enhance the investment climate and guarantee transparency. The US Ambassador to Sri Lanka emphasised the potential for additional manufacturers to contemplate similar actions if the investment climate continues to improve.

Infrastructure Development

The West Container Terminal at the Port of Colombo, which is being developed with the support of the U.S. International Development Finance Corporation (DFC), is a significant milestone in Sri Lanka's infrastructure investment. This initiative is intended to establish the port as a regional connectivity hub, with a $553 million investment. This initiative not only reinforces Sri Lanka's strategic position in global trade but also significantly stimulates the local economy by improving the port’s capacity and efficiency.

It is anticipated that this investment will generate employment opportunities in a variety of sectors, including logistics and construction, and will also stimulate economic activity. Furthermore, it enhances Sri Lanka's capacity to manage an increase in maritime traffic, thereby guaranteeing its continued competitiveness in the increasingly critical Indian Ocean shipping lanes.

Climate Change and Environmental Collaboration

Sri Lanka has established an ambitious objective of generating 70% of its electricity from renewable energy sources by 2030. The United States has provided technical expertise and funding for renewable energy projects, such as solar and wind energy initiatives, in order to support this objective. Sri Lanka is committed to achieving carbon neutrality by 2050. The United States has collaborated with Sri Lanka to establish strategies and frameworks for the reduction of greenhouse gas emissions in various sectors, including energy, transport, and agriculture.

The Global Climate Promise Exchange Workshop was held in Sri Lanka in March 2024, with the assistance of the United Nations Development Programme (UNDP) and Japan. The event convened 16 countries to exchange best practices and lessons learnt in the implementation of climate commitments under the Paris Agreement. Sri Lanka initiated an initiative in August 2024 to create its inaugural Biennial Transparency Report in accordance with the Paris Agreement. The initiative, which is backed by the Global Environment Facility and UNDP, is designed to improve transparency and accountability in climate action by monitoring the progress of national climate commitments. USAID sponsored the ‘Climate Challenge SL’ hackathon in late 2024, which aimed to encourage data professionals to create innovative, data-driven solutions for climate-related issues in agriculture and fisheries.

The objective of the event was to promote collaboration and employ technologies such as AI and IoT to address climate resilience challenges. A climate adaptation initiative that prioritised agriculture, fisheries, and tourism was implemented in September 2024 through a partnership between USAID and SDB Bank. The objective of this initiative is to strengthen governance and promote market-based growth in order to increase the ability of the private sector, civil society, and government to address climate change.

The project involves the creation of financial products that are specifically designed to meet the requirements of climate adaptation and the development of resilience in vulnerable communities. Ceylon Cold Stores PLC entered into a partnership with USAID's Ocean Plastics Reduction Activity in October 2023 to establish Sri Lanka's inaugural women-led plastic recycling network. To foster economic resilience and environmental stewardship, the initiative empowers women from coastal communities to acquire and process recyclable materials. The programme had collected more than 1,175 kilos of plastic waste by 2023.

Promoting Human Rights and Reconciliation

The United States has implemented proactive measures to advocate for Sri Lanka’s reconciliation and human rights protection. This engagement has been instrumental in assisting the nation in its recovery from the repercussions of a decades-long civil conflict and in confronting the underlying issues that are necessary to establish a more inclusive and peaceful society.

The United States has consistently underscored the significance of accountability for historical human rights violations, urging Sri Lanka to investigate and address alleged abuses that occurred during and after its civil conflict. The United States has promoted independent investigations to ensure justice for victims and their families through bilateral discussions and international forums such as the United Nations Human Rights Council (UNHRC).

The United States has provided support for constitutional reform efforts in Sri Lanka, acknowledging the significance of political reforms in promoting inclusivity. These reforms are intended to address concerns such as the devolution of power, minority rights, and the establishment of mechanisms that account for the aspirations of all communities in the country.

The United States has collaborated with Sri Lankan institutions, such as the judiciary and law enforcement, to improve their ability to address human rights concerns through programs and seminars. This encompasses instruction on the preservation of international human rights standards, investigative techniques, and legal procedures.

The United States has maintained robust relationships with Sri Lanka's civil society organisations, offering them resources and platforms to elevate the voices of marginalised groups and promote reform. This encompasses assistance for community-based initiatives that emphasise education, social cohesion, and reconciliation.

The United States has actively promoted inter-religious and inter-ethnic dialogue in Sri Lanka. The U.S. has promoted grassroots initiatives that promote understanding and cooperation among diverse communities, thereby reducing tensions and establishing trust.

The United States’ dedication to assisting Sri Lanka in its pursuit of a more equitable and harmonious future is underscored by these endeavours. The partnership endeavours to guarantee that peace, justice, and inclusivity are ingrained in the social and political fabric of Sri Lanka by confronting the underlying causes of conflict and advocating for systemic change.

Strengthening People-to-People Exchanges

The two nations have been able to cultivate mutual understanding and benevolence through cultural and educational exchanges. The United States has implemented initiatives that fortify relationships, empower youth, and advance shared principles of democracy, diversity, and innovation.

The United States has been instrumental in fostering Sri Lanka's growth and stability from 2022 to 2024, through economic investments, environmental initiatives, and human rights advocacy. The United States has assisted Sri Lanka in overcoming obstacles and establishing the groundwork for regional cooperation and sustainable development by emphasising multifaceted partnerships. The power of cooperation in addressing urgent global and national issues is demonstrated by the partnership’s ongoing evolution.

STRENGTHENING INTEGRATION: BIMSTEC as a Regional Pivot in Disaster Management

By Amasha Fernando

Disaster Management and Mitigation have become an essential concern within the littoral states of the Bay of Bengal, as many states face a rapid increase in climate catastrophes in the region. From powerful cyclones such as Fani (2019) and Fengal (2024) to the 7.7 magnitude earthquake in March 2025, which resulted in the loss of more than 3000 lives up to date in Myanmar, the region has faced alarming natural disasters, significantly, in the post-COVID-19 era since 2020. This has not only challenged the ecological balance of the region but also paved the way for massive damage to the regular lives of people.

These adversities, which escalate day by day, are a prominent concern addressed at national and regional levels within organizations such as ASEAN, BIMSTEC, and international coalitions like the G20. However, the frequency of the occurrence of natural hazards and their rising intensities calls for the need for practical and sustainable solutions at the national, regional, and international level.

In this context, the role of BIMSTEC in disaster management has increased considerably, as the changes in natural weather systems, particularly in the Bay of Bengal, create a significantly adverse impact on economic growth within the region. This article aims to discuss the latest developments of the climate catastrophes while exploring the effectiveness of current disaster mitigation mechanisms and offering suggestions to enhance the quality of assistance and humanitarian aid provided.

State of Nature Hazards within the Bay of Bengal littorals

The Bay of Bengal region, comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand, has experienced multiple climate-related disasters in recent years, including cyclones, earthquakes, floods, and landslides. Renowned as the ‘Kalapani’ or the Black turbulent waters (Bose, 2023), the Bay of Bengal region faces at least 5 to 6 cyclones per year, while annual floods in states such as Bangladesh and India affect millions of lives. These directly result in deaths, infrastructure damage, and displacement while affecting livelihoods and economic functions of the region on a broad scale. According to National Cyclone Risk Mitigation Project (NCRMP) reports, 7, 516 km of India and 716 km of Bangladesh are exposed to nearly 10% of the world’s tropical cyclones. (Dhruba, 2023)

In comparison with the West, these cyclones possess unique characteristics and effects of wind speeds and rough seas, mainly affecting the weather conditions of states such as India, Bangladesh, and Sri Lanka. An often-highlighted event among these is the Indian Ocean Tsunami, which occurred in 2004, resulting in over 30,000 fatalities, along with a US$1.5 billion economic loss in Sri Lanka alone, marking the most devastating natural disaster the island nation has faced to date. Simultaneously, over 10, 000 lives were lost within India due to this, followed by deaths in Myanmar and Thailand, and economies in all these states were affected as well, with the damage caused to agrarian lands. (Bose, 2023)

Many cyclones, such as Komen (2015), Roanu (2016), Amphan (2020), and Fengal (2024), which occurred during the past few years, affected communities largely in Myanmar and Bangladesh, in the following years marking a series of cyclones in between. These resulted in floods, rough seas, and torrential downpours, which worsen situations in the nations in the Bay of Bengal. As a result, floods become a frequent occurrence in these nations annually. According to government reports, floods in Kathmandu, Nepal, in September 2024 have killed more than 60 people, while 66 have gone missing. (OCHA, 2019) Moreover, scientists predict that Bangladesh, India, and China will be among the top 10 nations with the highest risks of facing the highest rainfall changes by 2100. (OCHA, 2024)

The latest alarming disaster occurred in March 2025 with the 6.4 and 7.7 magnitude earthquakes, which devastated Myanmar, affecting nearly 9 million people who belong to 58 townships. The disaster resulted in nearly 3, 600 deaths, while 4, 800 people are reported to have suffered injuries. (UNICEF, 2025) Severe infrastructure damage, which includes 2, 311 schools and 193 healthcare facilities, has been reported, while vulnerable groups such as women and children face shortages of medication and other essential items.

In addition, states in the Bay of Bengal are prone to the novel developments of climate change, such as rising sea levels, extreme heatwaves, and loss of land, with coastal erosion. World Heritage sites such as the Sundarbans Mangrove Forest, the Sinharaja tropical rainforest, and their ecosystems are significantly affected by such conditions, worsening the ecological balance within the region. According to World Bank reports in 2000, the rise of sea levels by one metre tends to destroy the whole Sundarbans region. (Jabir et al., 2021) Meanwhile, island nations in the Indian Ocean, such as the Maldives, are at risk of being completely submerged by the rising ocean levels.

Climate Actions Taken as a Regional Hub

The 2004 Indian Ocean Tsunami was the primary catalyst that sparked discussions on disaster management within the region at the BIMSTEC level, shifting the irregular patterns of disaster mitigation from occasional aid provision for disasters such as cyclones. Following the 1994 Oslo guidelines on “The Use of Foreign Military and Civil Defence Assets in Disaster Relief”, Humanitarian Assistance and Disaster Relief (HADR) was introduced to the region, creating action plans at state and BIMTEC levels. The evolution of participation in disaster management comprises several stages. (Bose, 2023) They can be identified as follows. 1. Passive Phase (1997-2005) 2. Provisionally Responsive Phase (2005-2006) 3. Phase of Dormancy (2007-2014) 4. Proactive Phase (2015 to the present)

The passive phase consisted of the initial level agreements within the organization, where the groundwork for natural disaster mitigation and management was introduced. However, disaster management within the region was not considered a prominent concern at that juncture until the Tsunami of 2004 became the wake-up call to cooperate in disaster management. In the aftermath of the Tsunami, ‘Environment and Disaster Management’ was considered a fundamental area of concern within the region through the introduction of many collaborative efforts, with other organizations such as the SAARC Meteorological Research Centre (SMRC) and the Asian Disaster Preparedness Centre (ADPC) were pivotal in creating institutional solutions in disaster response.

Mechanisms such as conducting workshops, knowledge sharing, emergency response and the establishment of early warning systems were done, with the aid of foreign nations and international bodies such as the United Nations. Creation of the BIMSTEC Centre on Weather and Climate Change was prominent in this regard, as it nurtured frameworks to sign agreements at bilateral and multilateral levels, creating room for discussions in the sectors of multinational cooperation in managing disasters. (Cook & Chen, 2021) Predominantly, India led these initiatives as a regional powerhouse, in creating relevant policy frameworks and responsible institutions.

However, with the absence of substantial financial cooperation within the region, BIMSTEC’s unity in disaster management was largely dormant from 2007-2014. (Bose, 2023) Disaster management was limited to emergencies and early warning mechanisms during this time, while documentation efforts such as approving a Memorandum of Association to establish a Centre of Weather and Climate Response were made in strengthening preventive measures. Reasons such as the impending change of chairmanship in the organization, the need to establish a permanent secretariat in Dhaka, and the change of India’s maritime cooperation doctrine, paving the way for a prolonged era of inaction.

The change of political leadership after the election of 2014 marked a positive change in the activities of BIMSTEC. The Modi government focused on fostering cooperation through multilateral collaborations, establishing India’s role as the “net security provider” in the region. (Cook & Chen, 2021) However, the significance of India within the BIMTEC as a regional power and an emerging world power has created points to ponder, as the power imbalance may create a situation where climate issues of small nations are rejected.

The unity of BIMSTEC nations was further strengthened with the introduction of India’s “Act East policy.” Disaster risk prevention policies, such as the Sendai Framework (2015-2030), aim to establish common information systems to track disasters within the region and exchange best practices. (Bose, 2023) Capacity building was a spotlight in discussions redefining the bounds of environmental governance and disaster response. Measures such as Disaster Management Exercises (DMXI), Field Training Exercises, and After-Action Reviews were introduced in this regard, finding creative ways to address the rapid changes of climate change. The first BIMSTEC DMXI exercise was held in India in 2017, while the initiative’s latest workshop involved five member states. (Cook & Chen, 2021)

Moreover, the importance of the Indian Ocean sea lanes was identified while discovering potential paths for integration in transportation in trade, and managing diverse security interests. While the strategic importance within the region increases daily with China’s presence in the Indian Ocean, with initiatives such as the BRI, BIMSTEC has a pivotal role in strengthening integration and capacities of disaster prevention measures.

When considering the present-day context, many measures, such as capacity-building initiatives and strengthening mechanisms, are followed within the organization. These were suggested through the joint declaration issued by BIMSTEC leaders who gathered at the 6th BIMSTEC summit on 4th April 2025. Collaborating with the Indian Ocean Rim Association and encouraging maritime transport cooperation within the littoral states further creates opportunities. Such collaboration in preventing natural hazards and common measures will address the economic losses and infrastructure damage while creating a secure environment for people, ensuring their safety and medication.

Future of Disaster Management within the Organization

The responsibility to prevent future disasters within the region is undoubtedly bestowed upon regional organizations such as BIMSTEC, as the solutions for these should be institutionalized and implemented sustainably and practically. While the organization has gained commendable progress in building a stable foundation for disaster management, growing intensities of natural hazards within the region demand immediate action while encouraging integration in collective disaster prevention methods.

Thereby, maintaining consistency in disaster prevention methods and maintaining coordination between disaster management centres within littoral states and authorities are crucial in efficient disaster management. India’s 2025 proposal to establish a BIMSTEC Centre for Excellence in Disaster Management Secretariat would be an active measure to create disaster readiness in the region. This centre would act as the central point of contact for managing disaster-related data, conducting risk assessments, and coordinating cross-border disaster response (Bhatt & Garge, 2023). In order to address the existing gaps in financial emergencies, the centre needs to have sufficient funding from a regional disaster relief fund and the authority to make its own decisions (Chaudhary, 2023).

Moreover, it is crucial to develop climate surveillance technologies and transboundary early warning systems. Initiatives like the BIMSTEC Centre for Weather and Climate (BCWC) offer an essential platform, but they need to be expanded and technologically improved in cooperation with regional and international partners like the United Nations, WMO, and ADPC (Cook & Chen, 2021; Bose, 2023). The European Meteoalarm system is an example of a real-time, shared warning protocol that BIMSTEC could use.

Measures should be followed to reach the grassroots of society in creating disaster awareness, bridging the gap between policy formulation, institutionalisation and practical implementation of disaster management methods. Frequent trends of climate catastrophes should be identified in preserving danger-prone environments such as the Sundarbans (Jabir et al., 2021) while ensuring an inclusive space for all nations. The importance of the Indian Ocean as a strategic hub should be rediscovered while promoting inter-organizational endeavours for disaster prevention.

Thus, it is crucial to strengthen regional cooperation through BIMSTEC because the Bay of Bengal region is becoming increasingly vulnerable to climate-related disasters. The growing frequency and severity of natural hazards—ranging from cyclones and floods to earthquakes—have not only exposed ecological fragility but also tested the social and economic resilience of millions. Even though the organization has advanced significantly since the 2004 Indian Ocean Tsunami, its framework for disaster management still needs strong institutionalization, funding, and inclusivity to keep up with new threats.

BIMSTEC has the potential to become a key player in regional disaster governance through improved cooperation, scientific innovation, and people-centred policies. BIMSTEC can genuinely fortify the ties by integrating disaster preparedness into the larger framework of economic and humanitarian integration.

References

Bhatt, R., & Deepali Mohan Garge. (2023). Unifying in Crisis: An Exploratory Analysis of Organizational Structures for a Regional Disaster Framework in BIMSTEC. The Journal Institute of Public Enterprise, 46(1), 49–68. https://www.researchgate.net/publication/375003509_Unifying_in_Crisis_An_Exploratory_Analysis_of_Organizational_Structures_for_a_Regional_Disaster_Framework_in_BIMSTEC/download

Bose, S. (2023, May 24). BIMSTEC and Disaster Management: Future Prospects for Regional Cooperation. Orfonline.org; OBSERVER RESEARCH FOUNDATION ( ORF ). https://www.orfonline.org/research/bimstec-and-disaster-management-future-prospects-for-regional-cooperation

Chaudhury, R. (2023, June). Disasters without borders: Strengthening BIMSTEC cooperation in humanitarian assistance. Orfonline.org; OBSERVER RESEARCH FOUNDATION (ORF). https://www.orfonline.org/research/disasters-without-borders-strengthening-bimstec-cooperation-in-humanitarian-assistance?amp

Cook, A. D. B., & Chen, C. (2021). Disaster Governance in the Asia-Pacific: Future Pathways to South and Southeast Asia (pp. 4–16). Nanyang Technological University, Singapore and S Rajaratnam School of International Studies. Death toll climbs as torrential rains pound Nepal - Nepal. (2024, September 30). Relief Web. https://reliefweb.int/report/nepal/death-toll-climbs-torrential-rains-pound-nepal

Dhruba, B. (2023). The Solar Influence on Tropical Cyclones Occurring over the Bay of Bengal and Arabian Sea. ECAS 2023, 37. https://doi.org/10.3390/ecas2023-15123

Jabir, A.-A., Hasan, G. M. J., & Anam, Md. M. (2021). Correlation between temperature, sea level rise and land loss: An assessment along the Sundarbans coast. Journal of King Saud University - Engineering Sciences. https://doi.org/10.1016/j.jksues.2021.07.012 Mahida, R. (2024). BIMSTEC: BAY OF BENGAL INITIATIVE FOR MULTI-SECTORAL TECHNICAL AND ECONOMIC COOPERATION: SWOT ANALYSIS FROM INDIAN PERSPECTIVES. International Journal of Management, Public Policy and Research, 3(4), 7–15. https://doi.org/10.55829/ijmpr.v3i4.247 OCHA. (2019). Relief Web - Informing humanitarians worldwide. Relief Web. https://reliefweb.int/

UNICEF Myanmar Earthquake Flash Update No. 6 - 09 April 2025 - Myanmar. (2025, April 9). Relief Web. https://reliefweb.int/report/myanmar/unicef-myanmar-earthquake-flash-update-no-6-09-april-2025