The foreign policy challenge 

According to an old African proverb, it is the grass that suffers when elephants decide to fight. 

The grass on this side of the Indian Ocean region has remained relatively undisturbed for the better part of the past few decades and as a result, the region as a whole has enjoyed a degree of economic prosperity, second only to the Far East in recent times. This unfortunately has aroused the interest of at least three ravenous elephants that have been happily grazing in other corners of the planet, to look this way with new found interest. As a result, we now have a problem of elephantine proportions, with the three biggies realising that the time has come for a gambit to mark territory in sunny Sri Lanka. 

Last week’s political developments in this part of the world have caused strong geopolitical undercurrents, not only in the entire region with potentially far-reaching ramifications for all actors involved, but also locally, with the party in power scrambling to control what is becoming a combustive local political environment stemming from its handling of the big three. 

Unfortunately for Sri Lanka, it has found itself intrinsically entangled in the geopolitical power play for influence in the Indian Ocean region, previously between China and India and now with the newest entrant to the arena, the US, owing to foreign policy compulsions dictated by economic necessity. While the three have their own agendas for the power play in the region, Sri Lanka has become an unwilling fourth actor due to its close ties to all three. Historically, Sri Lanka has never had serious issues with any of these three players, save briefly when India first nurtured the separatist movement here in the early ‘80s. Those wounds have since healed. 

China has maintained cordial relations with the country since the ‘60s when the world’s first woman Prime Minister Sirimavo Bandaranaike entered into a rice-rubber pact with the then sleeping dragon. Now the dragon is wide awake and counting on its friends to further its economic and defence agendas. The Americans too have maintained a consistently positive relationship with Colombo, the fruits of which have been a multitude of development grants over the years and preferential market access for our export goods. The US is now Sri Lanka’s single biggest export market accounting for something like 30% of all exports. 

India and the US have also been instrumental in providing defence and military training for our armed service personnel spanning many decades. They have also provided much-needed defence equipment more often than not on gratis basis. China too became a military supplier towards the latter stages of the war, but its supplies always came with a price tag. 

Now, all too soon, it is crunch time for Colombo with each one demanding their pound of flesh, but China suddenly seems more equal than the others considering its financial clout and mega investments already done and dusted on the ground. To add to the pressure, the country has a slew of new projects in the pipeline spanning highways, high-speed railroads, ports, etc., all with Chinese funding. It’s an unenviable position for the Government, as it has found itself caught between a rock and a hard place. 

In recent times, India Prime Minister Narendra Modi’s administration has warmed up to the Americans in an unprecedented manner; so much so that it is now considered a firm ally of the West. This naturally has ruffled feathers in Beijing which sees the blossoming ties as a potential spanner in the works of its ambitious Belt and Road Initiative linking the East with the West through land and sea routes. Although Beijing insists the programme is strictly of an economic nature, the West sees it differently as a not-so-subtle cover for an expansionist defence agenda. The fact that many countries on this particular sea route have defaulted on the repayment of loans, especially in port construction, has led those countries including Sri Lanka, to hand over control of those assets to China in return for equity. 

The familiar pattern in which these transfers of assets have been taking place across multiple locations on the Belt and Road is what has raised eyebrows in the West and probably what prompted the visiting US Secretary of State Mike Pompeo to describe China as a “predator” in Colombo last week. This sent Beijing ballistic and the subsequent battle of wits no doubt left Foreign Minister Dinesh Gunawardena sweating on how to extricate himself from the erupting volcano. 

The bottom line is that Sri Lanka cannot afford to fall out with either side, not now and not in the foreseeable future. The consequences will be economically disastrous and have the potential to bring the country’s already tottering economy crashing down. The Americans now, on the eve of a historic presidential election, seem to have lost patience with China’s monetary diplomacy and reminded Colombo that it will have to make some hard choices, specifically with regard to China, if the status quo was to remain. 

Such a blatant affront to a country’s sovereignty would be unprecedented under normal circumstances and all the more disconcerting in the current context where Covid-19 has put the country and its economy down in the doldrums. They say beggars can’t be choosers and it is probably this philosophy that is driving Washington’s new push in the region, knowing well the clout it wields to cripple the economy. 

The irony of it is that the visiting Secretary made it a point to state that the US is committed to Sri Lanka’s sovereignty and security and that its vision is very different to that of “predator” China. At least on the face of it, not much seems to be different in the ultimate goals of the two power players, other than the methods by which they hope to attain those goals of capitulation and subservience in return for economic oxygen. 

On the flip side, Sri Lanka will also have a tough engagement at the next session of the United Nations Human Rights Council (UNHRC) in Geneva scheduled for March 2021 where the country’s human rights record will be up for review. Although Sri Lanka can count on Chinese support to thwart any potential new resolution, the West acting in concert on Washington’s insistence can be a formidable challenge that needs to be weighed carefully. 

It has been an open secret that Washington has been seething at China’s growing influence in Sri Lanka and last week’s aggression emanating from no less a person than the US Secretary of State while on Sri Lankan soil, is the eruption of years of pent-up frustration, and Sri Lanka will need all the diplomatic acumen at its disposal to maintain its decades-old policy of non-alignment while also keeping neighbour India, which has more or less the same concerns as its new found ally from across the world, happy and contented. After all, India too is well placed to dictate terms given the financial clout it wields over Sri Lanka’s debt payment obligations. The last time a payment fell due, the Reserve Bank of India stepped in and extended a currency swap facility to the tune of $ 400 million, an amount similar to that offered by the US under the controversial Millennium Challenge Corporation (MCC) grant. The Government in general and Minister Gunawardena in particular, have their work cut out.