China and India wooing Sri Lanka

ByHoor Asrar Rauf

A national swimming champion and recently Graduated from UCF-USA in Hospitality and Event Management

Dated

August 2, 2022

Hoor Asrar describes an unsavoury race 

In Sri Lanka the country’s Prime Minister, Ranil Wickremesinghe, has been elected as president to replace the ousted Gotabaya Rajapaksa. This change is not likely to end the crisis as it is expected to provoke turmoil among protesters. Wickremesinghe, who has been prime minister six times won an overwhelming victory in parliament where MPs voted for the new president in an unprecedented secret ballot. Wickremesinghe, 73, had the backing of the ruling Sri Lanka Podujana Peramuna party (SLPP), which has the most seats in parliament and was seen as the candidate favoured by the Rajapaksa family, who despite no longer being in power have significant influence over the party they formed. Wickremesinghe beat competition from another SLPP MP, Dullas Alahapperuma, who was part of a breakaway group and who had the support of the major opposition parties. However, it appeared that in the vote most of the ruling party MPs had rallied behind Wickremesinghe and secured his victory with 134 votes out of 219, while Alahapperuma got just 82.

Present in the parliamentary chamber for the vote were three members of the Rajapaksa family who remain MPs, including Gotabaya’s older brother, the former president and prime minister Mahinda. Wickremesinghe has more than four decades of experience in politics and has pitched himself as an experienced and capable pair of hands to guide Sri Lanka through its worst political and economic crisis in its history, and in particular help the country negotiate a critical bailout from the International Monetary Fund. As the secret ballot took place a silent protest was held at the presidential secretariat in Colombo calling for Wickremesinghe to resign. Wickremesinghe will now serve for the rest of Gotabaya Rajapaksa’s term, until November 2024.

On the other hand, Sri Lanka, with its strategic location at the crossroads of busy shipping routes, has become an arena of geopolitical rivalry and maritime competition between India and China in recent years. Regional heavyweights India and China, both vying for influence in the island nation, have been quick to offer help. India has so far given about $1.5 billion to Colombo for funding imports of food, fuel, medicines and fertilizers. It has also provided another $3.8 billion in assistance in the form of currency swaps and credit lines. Beijing, for its part, is providing some 500 million yuan ($75 million) in humanitarian aid and has promised to play a positive role in Sri Lanka’s talks with the IMF.

Interestingly, India and Sri Lanka share not only close trade relations but also ethnic and religious ties but during the rule of Rajapaksa family, Beijing appeared to gain sway in Colombo at the expense of New Delhi. China emerged as Sri Lanka’s biggest trade partner and one of its largest creditors, accounting for about 10% of the country’s entire foreign debt of about $51 billion. After Colombo embarked on a massive infrastructure drive following the end of a decades-long civil war in 2009, China pumped money into the country, funding roads, ports and airports, among others making Sri Lanka to emerge as a vital node in the Maritime Silk Road under China’s Beijing and Road Initiative.

Quite obviously, China’s close ties with Sri Lanka have unsettled India, traditionally Colombo’s closest economic and political partner. However, not all the projects turned out financially viable, particularly the debt-financed mega ones like the Hambantota port and the Mattala Rajapaksa International Airport. In 2017, Colombo had to hand over the Hambantota port and thousands of acres of surrounding land to Beijing for 99 years, triggering accusations China engaged in a debt trap diplomacy to gain influence and control over key assets in the country. The result was that China gained a considerable footprint on the island’s foreign policy through infrastructure diplomacy. However, there are concerns regarding Chinese projects due to opaqueness, lack of transparency and high-interest rates for Chinese loans as the Chinese offered loans at considerably higher rates than other lenders such as at 6.4% from China while Japanese loans were less than 1% interest rate.

Now with the economic crisis on hand, the general perception of Beijing’s culpability, as well as China’s apparent reluctance to write off Sri Lanka’s debt India eyes a chance to regain lost ground and consolidate its position as Colombo’s primary partner. Over the past few months, India has managed to wrest control of some Chinese projects in Sri Lanka such as inking a deal to set up hybrid power projects on northern Sri Lankan islands, after China said in December that it was suspending its plans to build plants on three islands due to security issues. Colombo also scrapped an agreement with a Chinese firm to build a $12 million wind farm in the country and offered the project to an Indian rival. These decisions came after Sri Lankan authorities allowed India to proceed with a long-delayed project to jointly redevelop a strategic oil terminal along the island nation’s eastern coastline. Despite India appearing to regain lost ground, not all is well as anti-Indian sentiments still persist among sections of the Sri Lankan population, given suspicions and fears about Indian hegemony. TW

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