– By Anushka Sharma
In line with the ‘Neighborhood First’ policy of India, the significance of the Indian Ocean and the countries encompassing it is far-reaching, not only because of the geographical proximity with the neighbouring nations but the deep-seated cultural and historical ties with them via the maritime routes. The Indian Ocean Region and neighboring nations, therefore, hold strategic geopolitical importance for the Indian subcontinent. One such nation, with which India shares a unique relationship is Sri Lanka. Over the past few decades, India has massively invested in and assisted Sri Lanka, both in terms of fiscal and infrastructural capacity building. India has also delivered visible support for it in the UNHRC by abstaining from voting for the resolution raised against it pertaining to sanctions against human rights violations in Sri Lanka. Therefore, the Indian position, in general, has mostly remained in favor of the island nation besides other things bilaterally.
The Overarching presence of China in the South Asian Nation
The arduous task has been met by India when it comes to countering the robustly increasing presence of China in the island nation, which has cost India dearly in terms of a fair share of financial resources, without considerably tangible returns. India has been involved in undertaking capital investments in Sri Lanka (like the recent Trincomalee Tank Farm), but lately, as a result of an imminent Chinese influence over the Sri Lankan leadership, India has been facing a lot of strains both diplomatically and fiscally.
It is rather apparent that since the arrival of the Chinese in the South Asian region it is almost impossible to remove its presence. It is because of the hefty grip that China is able to maintain by the way of its aggressive diplomacy, its financial prowess and the luring but vicious cycle of debt it offers that ends up nearly seizing their national assets (like in Laos, Djibouti, Zambia) under the veil of capacity building. The repetitive examples of Sri Lanka’s indebtedness to China, the Hambantota Port, Colombo City Port, construction of roads, thermal power projects and others are evidence of the same. As of today, China is the fourth biggest lender to Sri Lanka (after IMF, ADB and Japan). Over the past decade, China has lent Sri Lanka over $5bn (£3.7bn) for projects including roads, an airport and ports.
India, for many years now, has been prey to this strategy since it is evident that India cannot compete with the economic capacity to invest in such magnitudes as China given its Belt and Road Initiative. Furthermore, the pattern has it that the Indian response has been a follower of China’s predetermined actions when it comes to maintaining a grip over Sri Lanka. This can be seen as a kind of lag from the Indian side, for not remaining as a proactive player when it comes to maintaining our position in the south Asian countries, to the extent with which China has been aggressively making its presence felt.
On the other hand, it is also the position of Sri Lanka that consistently gives mixed signals to India by downplaying many of India’s engagements in Sri Lanka. Herein the issue pertaining to the Tamil identity is also unavoidable as it since remains inadequately and half-heartedly addressed by the Sri Lankan state. The Civil War between LTTE and the State in Lanka left tens of thousands of Tamilians dead and displaced, who till date are deprived of their basic rights like those of access to health, education and employment and so on. Simultaneously, in recent months, several Indian fishermen have been arrested and detained by Sri Lanka’s forces on account of illegal fishing and similar allegations. This has served as much of a concern especially for the southern Indian states and citizens.
Recognizing the fault lines
Sri Lanka must take cognisance of the fact that it is due to its litany of poor policy decisions of the political regime, that Sri Lanka today finds itself in the midst of an economic emergency. As of January 18, 2022, Sri Lanka had to repay about $4.5bn in debt starting with a $500m international sovereign bond. And many of these decisions have been partly, if not entirely, the result of the Chinese influence, which later have proven counter destructive for Sri Lanka, be it imposing bans on Sri Lanka’s limited exports, temporarily blacklisting the People’s Bank of Sri Lanka, constantly ignoring Sri Lanka’s requests for restructuring its debts and simultaneously creating a narrative of blaming Sri Lanka for its policy failures.
It is because of the successive engagements between China and Sri Lanka, and the tendency of the latter’s leadership to give in to China’s pressure, that India has not gained any significant leverage over China in the region. At the same time, it must also be recognised that the island nation has transiently been benefiting from the India-China tussle in the country, which has cost the Indian side a lot of resources.
With FM Basil Rajpaksha’s visit in March 2022, India agreed to extend an emergency line of credit worth $1 billion to Sri Lanka, following the earlier $912 and $500 million dollars that India extended to Sri Lanka in the month of January 2022. The purpose being that the latter can direct the funds at certain essential and rapidly running out items like fuel and foreign reserves, and indirectly meet the debt repayment requirements to China for its economic bail-out. It is reflective of India’s benevolence, but the actual question worth asking is whether such massive amounts garner India’s leverage in the eyes of the Sri Lankan leaders and people.
What India should necessarily expect from Sri Lanka is reciprocity, and perhaps in the form of cognisance of the failure of its policies, in particular its lingering engagements with China. Given that Sri Lanka currently finds itself in an extraordinary position with regards to its internal politics, domestic pressure and outstanding debt repayment, the Indian credit must come with an obligation for the former. So far Sri Lanka remained on the receiving end of fiscal gain arising from the tussle between India and China, but should that continue, India will not find itself in any better position (either in terms of countering the presence of China or sustaining the cultural ties with the Sri Lankan people, who are caught up within distressed economic costs of bad policy decisions.)
The onus should be put on the Sri Lankan government to display its ability to choose India over China, at least diplomatically. India should build such pressure on Sri Lanka to avoid the display of mixed responses in the course of its engagements and interactions with the Indian side. In the absence of any kind of consensus between India and Sri Lanka, the utility of lending to Sri Lanka such massive amounts will not gain India anything close to what China is extracting in the long run. For instance, the China Harbour Engineering Company recently invested $ 1.4 billion to reclaim 660 acres of land in exchange for a massive 43% claim in the Colombo Airport Project for 99 years in a lease. Basically, the Chinese firm will hold a little less than half of the stakes in the China-led airport project, for the coming 99 years.
What India should expect from the bilateral relations
Every nation has the right to seek the best of what is available for itself in its power from the rest of the world, but one must be cognizant that interests carry their own implications as well. In order to foster amicable relations with India, the Sri Lankan state should show the willingness and the capacity to address certain issues that are bothersome for both India and Sri Lanka. These may include, at the very least, the issues faced by the Tamils and the constitutional enforcement of their rights, and so on. As India has affirmed to be a ‘steadfast and reliable partner’ of Sri Lanka, it never shied away from helping the country in multiple instances in several ways, where both countries have centuries of close relations that continue in the present with similar proximity.
If India has to sustain and increase its influence in the IOR and beyond (the south-east and the Pacific regions), connectivity with the immediate neighbours (like Srilanka, Maldives) and tapping into the historical and cultural ties of such nations is vital. Not only must India push for the effective implementation of the 13th Amendment of Sri Lanka’s constitution for the benefit of Tamilians residing there, but simultaneously, India must also contribute to the infrastructural developments, building connectivity and trade routes, in tandem with their respective government, and securing them in the shape of investments in place of extending consecutive credits. Capital expenditure, in turn, shall foster more returns and increase employment and resource utilization in such nations.
Following the Sri Lankan Finance Minister Basil Rajapaksha visit to India, certain encouraging developments have taken place as a sign of bilateral cooperation between the two nations. The Trinco Oil Project, a joint venture between India and Sri Lanka on the eastern coast of Sri Lanka that was in limbo for 34 years, was recently approved by the Sri Lankan cabinet. On March 11, Indian companies concluded two other major project agreements: one, an agreement between National Thermal Power Corporation and Ceylon Electricity Board to set up a solar power plant at Sampur in Trincomalee and another deal by Adani Group to set up two renewable energy projects worth $ 500 million, likely at Mannar in the north-west. Such forthcoming developments on the bilateral front may be appropriate for sustainability, however, the context today has undeniably changed with China coming into the picture, and here Sri Lanka is very much responsible for the kind of decisions it takes, so long as it wants to revive its failing political economy and continue to have close, strategic relations with India.
References :
- https://www.orfonline.org/research/as-india-and-china-compete-smaller-states-are-cashing-in/
- https://www.orfonline.org/expert-speak/chinese-envoys-jaffna-visit/
- https://www.thehindu.com/business/Economy/india-extends-another-500-million-loc-to-sri-lanka-for-emergency-fuel-import/article38289095.ece
- https://www.orfonline.org/expert-speak/its-high-time-sri-lanka-walked-the-talk-on-ties-with-india/
- https://theprint.in/opinion/global-print/sri-lanka-in-debt-trap-indias-response-shows-pushback-against-china-has-begun/806121/
- https://indianexpress.com/article/india/sri-lankan-minister-in-delhi-india-eyes-jaffna-airport-harbour-projects-7823403/
- https://www.deccanherald.com/international/explained-what-is-the-un-resolution-on-sri-lanka-and-what-is-india-s-stand-967115.html
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