The Economic and Technical Cooperation Agreement (ETCA) between India and Sri Lanka will be signed by year end that aims to attract investment in the $500 billion economy, encompassing Tamil Nadu, Karnataka, Andhra Pradesh, Telengana and Kerala.

“The proposed technology and economic cooperation agreement will be signed by the end of this year…The Prime Minister Narendra Modi and my self have agreed on this,” said Ranil Wickremesinghe, Prime Minister of Sri Lanka, speaking at the India Economic Summit organized by World Economic Forum along with Confederation of Indian Industry (CII).                    

He pointed that the five fastest growing southern states have population of 250 million and a combined GDP of $400 billion. With addition of Sri Lanka’s  22 million population and $80 economy the GDP in the sub-region is a $500 billion economy. “That is Sweden (economy)…imagine what it would be if we (India and Sri Lanka) work together,” said Wickremesinghe.

The free trade agreement (FTA) between India and SriLanka will be expanded to beyond trading of goods and services, to investment and technology cooperation.    “Asia will bail out the world (from economic downturn) if we are allowed to write the rules…else we create our own system,” said Wickremesinghe.

He said the FTA with Singapore and Indonesia by India and by Sri Lanka along with ETCA will make a strong regional economic power. The Sri Lankan PM also proposed to bring in Indonesia and Malaysia and the BIMSTEC countries. “The whole area around the Bay of Bengal as region of economic cooperation…the growth is here,” said Wickremesinghe.

The balance of economic power in the world is shifting to Asia, and India and China remain the only two countries that can drive global economic growth, said Wickramasinghe, at the opening session of the India Economic Forum.

“World Economic Forum in Delhi this year says that the world is expecting India to translate potential into action. We are at the threshold of another historic moment. If the pace of reforms (in India) fails to pick up, companies may look elsewhere. But where is elsewhere?” he said referring to India’s rising importance in the global economy.

“It has to be India or China, there is no other place to go today. That is the hard reality,” he said.

In India for a three-day visit - during which he met with senior political leaders and heads of businesses - Mr Wickramasinghe said Asia may hold the key to global economic recovery.

“(At first) the West wrote the rules of globalisation; we were just supposed to play along. When people here invested in western countries, there were no complaints. But when their (western countries) people started going to Switzerland, they started complaining,” he said, pointing out that it was time for Asian countries to get a bigger say in global economic policy making.

“Asia will bailout the world; otherwise we can also create our own system. A very, very stable system,” he said.

He said that Sri Lanka - US economic relations were not progressing fast enough, since both sides were waiting for the result of US presidential elections.

“We have kept 500 acres of land for a golf course and Trump towers,” he joked, referring to Republican presidential nominee Donald Trump.

-Agencies