Col R Hariharan
Here is my response to two questions from Sri Lanka media on the strategic developments in the wake of Sri Lanka economic crisis:
Q: There is a sudden positive climate for India in Sri Lanka. In the economy hit Sri Lanka, the US and Japan seem to have come to regain their lost "glory." Japan was seriously upset with the earlier government for revoking their projects. After the appointment of Julie Chung as US ambassador, the US has turned to be very active in promoting the IMF, etc. to gain its pace. India has strengthened its ties. How do you see these developments?
A: For geostrategic reasons, I attach greater importance to India strengthening its ties with Sri Lanka, because it will also influence India's strategic allies.
On the regional plane, India regaining its position as a favoured partner of Sri Lanka did not happen overnight. PM Modi has been trying to live up to his maxim of "Neighbourhood First" in paying special attention to improve India's relations not only with Sri Lanka, but also with Maldives, Mauritius, Seychelles and Bangladesh, which are part of Indian Ocean strategic sphere dominated by India. Regardless of the change in Sri Lanka government leadership, PM Modi has kept alive his contacts with the leaders of not only the ruling parties but also the others (remember his meeting with Mahinda after he lost the presidential election?). Unlike earlier Indian PMs, he attaches importance to his visibility in Sri Lanka - like his visits to Jaffna and Colombo after the Easter Sunday attack. He has tried to deliver upon India's promises to contribute towards development projects despite pinpricks of Sri Lanka local politics. PM Modi has also worked to revive the Buddhist connect of Sri Lanka with India. At the same time, he has not discarded India's demand for implementation of 13th amendment; I feel if Tamil polity can work out a viable solution to the national question, India would support it.
Probably, President Gotabaya also understands that India's strategic concerns under PM Modi cannot be ignored. Even when he was the defence secretary, he had to reassure India, when it objected to the entry of a Chinese submarine in Colombo port. So first thing Gotabaya did on taking over as President was to reassure India that Sri Lanka would never allow any activity that threatens India's strategic security. This helped growth of positive vibes in the relations. The global Covid pandemic and its terrible impact on Sri Lankan peoples health and economy created a positive climate for India-Sri Lanka relationship to grow. And when the Ukraine War added to Sri Lanka's agony. Indian leadership and diplomats seem to have finetuned their real time response to Sri Lanka's urgent needs unlike the stodgy Chinese. This has worked in favour of India emerge as a true friend of Sri Lanka. Tamil Nadu's large-hearted help to Sri Lankans in their time of distress is indicative of the positive change in the relationship.
On the international plane, Indo-Pacific had emerged as the focus of strategic concern for India, the US and its allies over China's increasingly belligerent conduct. It resulted in the Quadrilateral framework of four nations - Australia, India, Japan and the US - for cooperation and coordination of their response to the challenges posed by China. Though it is not a military pact like NATO, functionally the member countries have improved their military interoperability and coordination of their response systems. Sri Lanka is at the heart of Indian Ocean region because it dominates the sea lanes of the Indo-Pacific.
So there is a strategic logic in India, US, Japan and Australia cooperating and coordinating their plans for salvaging Sri Lankan economy. Moreover, Sri Lanka President and PM seem to have understood the viability of QUAD members using their influence over international bodies like IMF and World Bank to help Sri Lanka. This understanding can also help Sri Lanka in UN bodies like UNHRC. So it is inevitable that India, the US and Japan turning out to be the immediate saviours of Sri Lanka.
Q: What do you think China will do next in response to this? Sri Lanka has been asked to restructure the loan it owes China. But seemingly it is not happening because we are going to the IMF. Do you agree with this? Your comments please.
As far as India-Sri Lanka bilateral relations are concerned, I see China's conduct as acknowledgement of India's geostrategic and socio-cultural advantages in Sri Lanka. After the Galwan military confrontation with India, China has been careful not to needle India. It probably feels the incident had pushed India to ramp up its border security framework, improve its alliances with Western powers and the US. So it probably does not want to tread on India’s shoes in Sri Lanka, unless it is inevitable.
On the economic front, China's Belt and Road Initiative (and its 21t Century Maritime Road) projects have run into difficulties. According to December 2021 official data, China has invested $139.8 billion by 2020 in BRI projects. It includes $22.5 billion invested in the China-Pakistan Economic Corridor (CPEC) project, which has not progressed as planned. The BRI stories in Nepal and Sri Lanka are no better. After the crackdown on monopoly private holdings and the rise of Covid pandemic in China, the economy had not lived up to the forecasts. So, I believe China has become cautious in stretching itself in South Asia and the Indian Ocean region.
China is a stickler for agreements as far as investments are concerned. And Sri Lanka's bankruptcy does not make it attractive for China to defer loan repayment or write them off. So, it probably wants Sri Lanka to use its yuan loans that would directly benefit China.
I do not agree with the view that Sri Lanka approaching the IMF influences China's attitude to Sri Lanka now. After all, the IMF will help Sri Lanka rationalise its payment of loans and interests; in the long run China stands to benefit from such rationalisation. But the IMF financial oversight can become a big nuisance to China in pushing through some of the opaque financial deals with Sri Lanka as in the past.
So, we can
expect China to watch carefully the results of international financial
agencies help in Sri Lanka in the coming months, before taking a major move on
the economic front.
[Col R Hariharan, a retired MI specialist on South
Asia and terrorism, served as the head of intelligence of the Indian Peace
Keeping Force in Sri Lanka 1987-90. He is associated with the Chennai Centre
for China Studies. Email: haridirect@gmail.com Website: https://col.hariharan.info]
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