Sri Lanka seeks new investment ties with New Zealand amid economic crisis

On May 25, 2025, Sri Lanka engaged in discussions with New Zealand to enhance bilateral relations amid its ongoing economic crisis. Winston Peters, the deputy prime minister and foreign affairs minister of New Zealand, met with Vijitha Herath, Sri Lanka's foreign affairs minister, in Colombo. The discussions aimed to strengthen ties in various sectors, including trade, investment, agriculture, education, and tourism, indicating a proactive approach by Sri Lanka to improve its economic situation. The meeting highlighted potential trade links, especially in high-demand sectors like dairy and processed foods, crucial for Sri Lanka's recovery effort. This diplomatic engagement follows a difficult period for Sri Lanka, which officially declared bankruptcy in April 2022 with debts exceeding $83 billion. The country has faced severe economic hardships due to a combination of mismanagement and external shocks, including the COVID-19 pandemic and terrorist attacks in 2019 which severely impacted its tourism sector. In seeking to navigate its complex economic landscape, Sri Lanka has been working closely with the International Monetary Fund (IMF), which provided a significant bailout package that stipulated debt restructuring as a prerequisite for financial assistance. The discussions between Sri Lanka and New Zealand are significant, marking a continued effort to bolster the relationship through established diplomatic channels, including the opening of the New Zealand embassy in Colombo and the Sri Lankan embassy in Wellington in recent years. The meeting emphasized the potential for expanding market access for Sri Lankan goods, particularly dairy products, where New Zealand plays a critical role as a supplier. Winston Peters noted the growing number of New Zealand companies interested in investing in Sri Lanka, suggesting an opportunity for collaboration that could stimulate the local economy. In conclusion, the dialogue underscores Sri Lanka's commitment to fostering international partnerships to enhance its trade capabilities and improve its economic recovery trajectory. By engaging with countries like New Zealand, Sri Lanka aims to unlock new avenues for investment and economic revival in the aftermath of its severe financial crisis, reflecting an adaptive strategy to secure a stable economic future.