Col R Hariharan (retd.)
Even as the Prime
Minister Dr Manmohan Singh was finding it hard to make up his mind over
attending the CHOGM (Commonwealth Heads of Governments Meeting) to be held in
Colombo in two weeks from now, China is making the best use of the situation to
strengthen its presence in Sri Lanka. China’s intention is obvious: profit from
India’s discomfiture in Sri Lanka to occupy India’s strategic space in the
island nation.
On October 24 when the Tamil Nadu Chief Minister Ms
Jayalalithaa was moving a resolution asking the Centre to ‘totally boycott’ the
CHOGM “in deference to the overwhelming feeling and sentiments of
Tamils,” Sri Lanka President Mahinda Rajapaksa was praising China's generosity,
while opening of the renovated venue for the Commonwealth Heads of Government
Meeting (CHOGM) at the Bandaranaike Memorial International Convention Hall
(BMICH). When President Rajapaksa wanted to renovate the BMICH, China chipped
in to meet the cost of about $15.3 million (Sri Lankan Rs 2 billion). In fact
China had donated the BMICH, Colombo’s prestigious conference centre nearly a
decade ago. It now stands as a visible reminder of China’s “enduring
generosity” to Sri Lanka.
Even as Ms Jayalalithaa
castigated the Centre for failing to act upon another “historic resolution”
passed by the Tamil Nadu Assembly on July 8, 2011 which sought an economic
embargo on Sri Lanka until Tamils were fully resettled and rehabilitated, Sri
Lanka was negotiating with China to finalise a Free Trade Agreement (FTA). The
government-owned Sunday Observer described the China-Sri Lanka FTA as the
biggest development in Sino-Lanka cooperation since the 1952 Rubber-Rice Pact.
Two months ago, Sri Lanka’s
minister for industry and commerce Rishad Bathiudeen was hopeful of finalising
the FTA before the CHOGM in November 2013. However, the Deputy International
Trade Representative of the Commerce Ministry of China, Yu Jianhua who visited Sri Lanka last month was more realistic.
He expected “the preparatory process of the FTA to be completed by
December this year.” He was keen to see the groundwork on this FTA completed by
December this year.
The Chinese representative
added “Sri Lanka is a priority country for the Ministry of Commerce, China
(MOFCOM). The FTA will not only upgrade trade levels between Sri Lanka and
China but will also enhance trade skills of both countries as well. We will
work diligently in our joint efforts.” Yu said before visiting Colombo, he had
looked carefully at China’s trade links with Sri Lanka on issues like tariffs,
market access in China, diversifying Sri Lanka’s exports, and overall
enhancement of Sri Lanka’s export potential to China.”
In his view, the FTA was not
only for trade “but something beyond, to institutionalise our strategic
cooperation partnership as mandated by the leaders of both countries. We encourage
Chinese firms to become involved in Sri Lanka’s economic development.”
The Chinese efforts to
enhance its trading opportunities on the sidelines of CHOGM are interesting.
According to Xinhua, 42 Chinese companies were among the 83 foreign companies
participating in the trade exhibition “Reflections of Sri Lanka” being held on
the sidelines of the CHOGM. In contrast, despite being Sri Lanka’s largest
trading partner, India will be represented by only 21 companies at the
exhibition.
Sri Lanka has been wooing
Chinese business to invest in Sri Lanka saying it could reap the benefits of
the island nation’s FTA with India and Pakistan (and the proposed SAFA –South
Asian Free Trade Agreement when it becomes a reality). India has a flourishing
FTA with Sri Lanka since 1996. It has helped India-Sri Lanka trade to grow from
$600 million in 2000 to $5 billion in 2012. As against this, China-Sri Lanka trade even without an
FTA has grown from $658.4 million in 2005 to $2676.13 million by 2012.
Obviously, China-Sri Lanka trade aided by an FTA would retard the
growth of India’s trade with Sri Lanka.
Ever since the Eelam War
excesses started to haunt Sri Lanka, Tamil Nadu has become the focal point of
hate campaign against Sri Lanka in India affecting the excellent relations
between the two countries. Of late, a beleaguered Sri Lanka has started using
trade as a pressure point to express its concern over India’s “Sri Lanka
politics.” The CHOGM which should have been an inconsequential international
event turning into a political contest in India is a case in point.
So how should India respond
to Sri Lanka-China FTA? In fact, Tamil Nadu should be debating this issue
because the state had benefitted most from the FTA with Sri Lanka. But in the
polemics of partisan politics, the issue seems to have been wished away. The
anachronism is even the few Sri Lankan business and cultural establishments in
Chennai are under police protection lest pro-Eelam fringe elements attack them
just as they carried out petrol bombs attacks on two post offices in Chennai,
in protest against India’s participation in the CHOGM. The pity is it is
happening as indecisive national leadership looks on helplessly. At least it
seems so.
The author, a retired MI
officer, served as the head of intelligence of the Indian Peace Keeping Force
in Sri Lanka from 1987 to 90. He can be contacted at colhari@yahoo.com
Courtesy:
South Asia Analysis Group Paper No. 5595 dated 7 Nov 2013 URL: http://www.southasiaanalysis.org/node/1396
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