The policy of the present government of Sri Lanka has been guided by the principle of non-alignment which requires Sri Lanka to maintain equally close relations with the two big regional powers, India and China. Sri Lanka seeks to obtain their support for the promotion of trade and investments aimed at accelerating economic growth rate while providing employment to the unemployed youth and eradication of poverty. Sri Lanka is, in a way, very fortunate that both India and China have shown a very keen interest in integrating Sri Lanka’s economic development to their respective economic development plans for the region.
The Sri Lankan government’s foreign policy perspective appears to be exploring the possibility of obtaining the support of other economic powers outside the region such as the European Economic Union, Japan and Australia also for her development projects. The Sri Lankan government has been able to sign a large number of agreements with these economic powers recently for promoting trade with these states and inducing investors of these countries to invest in Sri Lanka.
In this article, I am attempting to draw the attention of the reader to a serious problem that Sri Lanka is confronted with in maintaining an equally close relationship with the two regional powers, India and China, because these regional powers have conflicting regional and global interests.
Foreign policy of the previous regime
It can be said that the foreign policy adopted by the Rajapaksa regime during the last stage of administration was irrational. The government adopted a confrontationist attitude when the members of the international community brought before the UNO some issues of human rights violations during the last stage of the war.
This attitude of the Sri Lankan government resulted in many powerful states including India showing reluctance to contribute in a substantial way for implementing the development projects designed for rapid economic growth. Only China, the fastest growing economy, at the time, was willing to assist Sri Lanka by undertaking to grant financial assistance for the massive development projects such as the Hambantota port, Mattala airport and the Port City in Colombo.
The Chinese government agreed to provide finance for the implementation of these projects. However, it is after the completion of the construction work of the Hambanthota port and the Mattala airport that the Sri Lankan government realised that these projects were economically not viable and the burden of paying foreign debts became a very serious economic problem for the government.
After the change of government in 2015, the new government had suspended the construction work in the Port City, stating as a reason, the need for making a proper study of the agreement with the Chinese construction company and if necessary to make amendments to the agreement. Consequently, after several months, the Sri Lankan government permitted the Chinese construction company to go ahead with the construction of the Port City after making some amendments to the agreement. However, after taking into consideration the loss and damage caused to the Chinese company during the time that the construction work had been suspended, the Sri Lankan government undertook to pay compensation to the construction company in some form.
The new government had no alternative but to seek the cooperation of China for making the running of the Hambanthota port an economically viable enterprise by signing necessary agreements for sharing the management of the port with the Chinese Company, China Merchant Port Holdings Company Ltd. Although a Concession Agreement and a Framework Agreement have been drafted, the Sri Lankan government seeks to amend some provisions to make the terms more favourable to Sri Lanka.
Opposition to China’s involvement in development projects
Even before the change of government, there was opposition to the involvement of China in the strategically important development projects such as sea ports and airports and granting management and control over such projects after the completion of the construction work. The critics of the China’s involvement in such projects pointed out that when China acquires an ability to have control over such assets in Sri Lanka for long periods, it results in the erosion of Sri Lanka’s sovereignty. Moreover, China is viewed as a rival state by India and India entertained the fear that in the event of a dispute between these two states escalating to the state of a military confrontation, there is a possibility of the assets such as sea ports under its control and management being used by China for military purposes.
It cannot be said that the Sri Lankan government was not aware of the fact that China had designed a plan for constructing sea ports in strategically important locations in the littoral states of the Indian Ocean and several sea ports such as the port at Gwadar on the southern coast of Pakistan and Sittwe in Myanmar had already been constructed. It was viewed that these sea ports constructed by China were aimed at containing India which was considered as a rival state due to several inter-state issues between these two rising powers in Asia. India too had engaged in constructing new sea ports in the eastern coast of India with a view to expanding its maritime interests and preserving its dominance in the Indian Ocean.
China’s One Belt One Road global project
China, being a rising power with the vision of reaching the super power status has already assumed a world power status posing a challenge to the USA and also India. For reaching the super power status, China has to use its diplomacy for expanding its spheres of influence for finding markets, resources and assets for investments in other countries, not only in the region but also in other parts of the world.
The concept of ancient Silk Road has been redefined as the One Belt One Road Initiative (OBOR). It is a massive infrastructure project financed by China to link the country with Africa, Asia and Europe through a network of ports, railways and industrial parks. However, this connectivity and development projects of China are viewed by other economic powers with suspicion. It is viewed as an attempt to attract economically weak countries seeking foreign aid for development, to China’s sphere of influence undermining the status enjoyed by other economic powers in Asia and in regions outside Asia.
India cooperating with Japan for a counter-project
Newspapers reported recently that India has sought the support of Japan for acting jointly for developing an Asia-Africa Growth Corridor (AAGC) as a counter to China’s ambitious One Belt One Road also known as the New Silk Road project. The Prime Minister of India, Narendra Modi, made reference to this while addressing the 52nd Annual General Meeting of the African Development Bank (ADB) at Gandhinagar, Gujarat’s capital, on May 23.
The proposed project is largely meant to propel growth and investment in Africa by curtailing the ever increasing presence of the Chinese on the continent. The AAGC is an attempt to create a “Free and Open Indo - Pacific Region” by rediscovering ancient sea-routes and creating new sea corridors that will link the African continent with India and South East Asia. The idea is to enable economies in Asia and Africa to further integrate and collectively emerge as a globally competitive economic block.
We are aware that India has assumed a role as the leader of the South Asian region considering that the geopolitical factor of neighborhood requires the small states in South Asia such as Sri Lanka, Nepal, Maldive Islands and Bhutan to orient their relations with other states in such a manner that their policies should remain consistent with the foreign policy of India at any particular point in time.
India considers that there is an obligation on the part of neighbouring states to consult India not only in the matter of taking foreign policy decisions but also regarding internal matters if they constitute a source of a threat to India’s security. For example, a civil war or political instability in a neighbouring state can be regarded as a potential threat to India’s security.
India also considers that if a neighbouring state adopts an independent foreign policy disregarding India’s concerns or the government of a neighbouring state ignores India’s advice as to how an internal problem such as a civil war should be managed, there is an obligation on the part of India as the ‘Big Brother’ to intervene. Sri Lanka has already learnt lessons regarding the consequences of disregarding India’s concerns or fears in taking not only foreign policy decisions but also ignoring India’s advice regarding some internal problems.
When we take into consideration some recently announced foreign policy decisions by two regional leaders, India and China, it appears that both these rising powers are engaged in a competition for expanding their spheres of influence both in their neighbourhood and also outside their immediate neighbourhood.
It appears that India perceives China’s increasing involvement in the massive infrastructure development projects in neighbouring states as a threat not only to its security but also its economic interests. Indian leaders’ attitude is that Sri Lanka should remain exclusively within the sphere of influence of India.
According to them, for foreign aid or assistance for economic development, there is no option for Sri Lanka other than relying upon India. In explaining why Sri Lanka should remain exclusively within the sphere of influence of India, the Prime Minister of India, in addressing the audience at the 14th UN International Vesak Celebrations, stressed the cultural bond and affinity between the peoples of India and Sri Lanka which make the peoples in these two countries inseparable. He said that therefore there is a moral obligation on the part of India to support Sri Lanka’s economic development efforts.
The Prime Minister states that “India is committed to the economic prosperity of Sri Lanka’s citizens because whether it is on land or in the waters of the Indian Ocean, the security of our societies is indivisible”.
What he means by stating that the security of our societies is indivisible is that India opposes Sri Lanka permitting China or any other outside power to involve in economic development activities, if such outside power’s involvement in strategically significant development projects poses a threat to India’s security, and as such, when Sri Lankan leaders seek the involvement of any outside power in Sri Lanka’s development activities, they should have India’s security concerns uppermost in their minds.
Sri Lanka seeking India’s assistance for new projects
When Prime Minister Ranil Wickremesinghe met Prime Minister Modi in April, a Memorandum of Understanding on cooperation in economic development projects was signed.
According to this Memorandum of Understanding, Sri Lanka seeks the cooperation of India for the construction of a regasified liquefied natural gas (LNG) fired power plant, an LNG terminal and floating storage regasification unit in Colombo, and a solar power plant in Sampur. Several mega-development projects such as the creation of industrial zones or special economic zones in identified locations in Sri Lanka, a project for road connectivity and railway track upgrading and also a container terminal in Colombo, have been included in the MoU.
However, the agreement between India and Sri Lanka for the development of the Oil Tank Farm, the proposed petroleum refinery and industrial zones in Trincomalee has become a controversial issue for the reason that there is a prejudice in the minds of some sections of the people in this country that India might use such facilities and assets in Sri Lanka for dominating Sri Lanka economically and also politically.
Sri Lanka’s policy has been not to have an exclusive reliance on India or China for her economic development projects but to have the cooperation of both countries maintaining an equally cordial relationship. But, the geopolitical factor of Sri Lanka’s location in the Indian Ocean close to India and India’s security concerns is a very salient factor that foreign policy decision makers in Sri Lanka should take into consideration.
Therefore, when Sri Lanka enters into agreements with other states seeking their involvement in strategically significant development projects, there should be very clear provisions in such agreements prohibiting such states from using Sri Lankan Soil, or in other words, any facilities or assets in Sri Lanka, for military purposes.
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