How Does Sri Lanka Fit into this Triangle?-by Shivanthi Ranasinghe
The news that the US Ambassador to Sri Lanka Julie Chung visited her Chinese counterpart Qi Zhenhong at the Chinese embassy on June 13, 2022 is enough for one to choke over coffee. While it is not unusual for foreign envoys to meet in this fashion, a meeting of such between the US and China in Sri Lanka is not an ordinary event.
It was just in October 2020 the two embassies had a very public spat. It began with Trump regime’s State Secretary Mike Pompeo visit to the island nation as part of his Asian tour to consolidate the US influence over the region. With the US Presidential Elections round the corner the timing was off, especially as the Trump’s regime was not expected to win a second term. It did not.
Pompeo’s visit had Sri Lanka sweating at the brow. The highly controversial US economic development agreement, The Millennium Challenge Corporation Compact (MCCC), was still on the table. The Status of Forces Agreement (SOFA) was also on the table whilst Acquisition and Cross-Servicing Agreement (ACSA) had already been signed by the Yahapalana Government.
The manner the ACSA was signed, allegedly with bulk of its contents hidden from then President Maithripala Sirisena’s attention, did not win the nation’s confidence on the agreement. Together, these three agreements were the equivalent of signing our sovereignty over to the US without the superpower even having to show the muzzle of a gun.
Though His Eminence Cardinal Ranjith believes that the incumbent government came to power on the bodies of Easter Sunday victims, President Gotabaya Rajapaksa’s overwhelming victory hinged on the MCCC. Sri Lankan expatriate community made a special trip to vote out the Yahapalana Government that was hell-bent on signing the MCCC. In an unprecedented move even Buddhist monks in forest retreats entered the polling booth to vote for GR.
Despite the overwhelming opposition against the MCCC Mangala Samaraweera was attempting to push it through in the most undemocratic manner. Samaraweera held a number of important positions in the previous government and behaved with the impunity of a de facto leader.
This prompted Venerable Ududumbara Kashyapa Thera to launch a fast unto death hunger strike against the MCCC. The fast was ended only after Presidential hopeful Gotabaya assured in writing that he will revoke any agreement already signed by the government with foreign countries if found to be contrary to national interests.
If nationalists expected the newly elected President to dramatically tear up the agreement, it did not happen. Former US Ambassador Alaina Teplitz made a number of trips to the Presidential Secretariat but the Compact just remained on the table, unsigned. Time was ticking before it would automatically lapse.
Pompeo’s visit coincided this tense background. As if to add a crackle to the tension, a senior State Department official in the Bureau of South and Central Asian Affairs in a provoking statement declared that Sri Lanka must make “difficult but necessary choices to secure its economic independence over the longer term.”
This was a clear jab at China.
China – A Strategically Important Partner
President Xi Jinping’s Belt and Road Initiative (BRI), which was seen as circling India and right into the heartland of Western hegemony, alarmed both India and the US. This initiative invested billions of USD in infrastructural development projects that connected the strategic points along the way promised economic growth of these countries. This would further loosen the hold India and the West have had over these countries for so long.
It is therefore of little surprise that the anti-BRI narrative focused excessively on the Chinese loans whilst studiously ignoring the rapid GDP growth of these countries. The projects too came under heavy criticism and despite the obvious economic potential were derided as “white elephants”.
In reality this is a very clever and far reaching project for both China and the world. This would bring China, the emerging superpower, out of its isolation and earn strategic partners across the world. Along the process, countries that are still struggling to decolonize its economy will get the much needed helping hand to rise. Even countries with solid economies as Germany stand to gain as this offers new links to the old world.
Of course, this would also mean a resetting of the existing world order and not just vis-a-vis China. The Chinese presence in the region will offer countries like Sri Lanka a security it currently lacks. This is a historic fact – every time the Chinese-Sri Lankan relationship was at its strongest, South India behaved.
With Asia once again re-emerging as the global economic epicentre the strategic location Sri Lanka holds, especially in terms of Naval routes, is pronounced more than ever before. In the words of Principal Deputy Assistant Secretary of State for South and Central Asian Affairs Alice Wells in January 2020 Sri Lanka occupies some very important real estate in the Asia-Pacific region.
However, Sri Lanka is not mere real estate but a sovereign nation. This is a fact made difficult to ignore with China’s partnership offering security on both fronts – economic and territorial. Hence the US’s efforts to ride on Sri Lanka’s fears of been colonized and characterize Chinese funded projects as debt traps.
Immediately after the remark from Washington implying that Sri Lanka must distance herself from China, the Chinese embassy in Sri Lanka chided the US for its attempt to bully Sri Lanka and interfere in the Sri Lanka-Chinese bilateral relations. Undeterred, Pompeo during a press conference with the Sri Lankan media called China a predator and characterized the US “as a friend and a partner.”
The Chinese embassy immediately responded by tweeting a promotional image for the “Aliens vs Predator” video game and message,
“Sorry Mr. Secretary Pompeo, we’re busy promoting China-Sri Lanka friendship and cooperation, not interested in your Alien v Predator game invitation.”
Interestingly, Pompeo did not attach much importance to the MCCC. At the media discussion he relegated it the mundane status of an ordinary agreement. Pompeo noted that it is “the relationships, the strengths, the depths, and complexity of our relationship far exceed any one transaction and one opportunity. There will be plenty. We will work closely on them alongside the Sri Lankan Government,” he said during a media discussion and noted that Sri Lanka is free to reject it, if it does not make sense for the country.
Over the past two years however there is a discernible cooling off in the relationship between China and Sri Lanka. Closely following the controversy over the organic fertilizer issue, Sri Lanka has sought to cancel a number of projects already awarded to China. Apparently it is over “concerns” from a “third party” that had compelled Sri Lanka to change her mind.
China is yet to react and has continued to foster relationships – if not with the government, then with other factions. Last December Ambassador Qi met with the Opposition Leader Sajith Premadasa and donated eight kidney dialysis machines worth an estimated Rs. 20 million to hospitals across the North-East Provinces. This was in support of Premadasa’s social service project to uplift the healthcare sector in Sri Lanka.
Accepting the Chinese donation, Opposition Leader stated, that “This is special, as it is the first time that a foreign mission has donated funds to an Opposition party. This means that we have managed to win China’s confidence.”
Until now China had always consciously kept out of Sri Lanka’s internal affairs. This act was seen thus as unprecedented and a snub of sorts to the government.
The Chinese embassy however did react in surprise when President Gotabaya suddenly announced in mid March 2022 that he is seeking a bailout package from the IMF and would be abandoning efforts for a home-grown solution to the country’s growing economic crisis. More surprises were in store with India rushing to Sri Lanka’s aid.
Indian Finance Minister Sitharaman herself along with a top level Indian economic delegation was in Washington to meet the newly appointed Sri Lankan Finance Minister Aly Sabry, PC and his delegation at the IMF Headquarters, Washington DC in April 18. She assured Minister Sabry of India’s fullest support to Sri Lanka in its deliberations with the IMF including on expediting an Extended Fund Facility (EFF).
Since then India has opened a number of Credit Lines that enabled Sri Lanka to procure from India essentials as fuel and medicines. Using Credit Lines worth USD 500 million and USD 200 million respectively Sri Lanka was able to procure fuel since April 2022. However, the last fuel shipment under the Indian Credit Line arrived last week. The Sri Lankan Government had to pay USD 25 million to release the shipment as the remaining balance from the USD 500 million Credit Line was insufficient.
China, an all weather friend of the island nation usually ever ready to dig into its deep pockets, has been unusually silent. The Sri Lankan Government too has not been seen approaching China for any assistance.
This is all very strange as China openly welcomed the Gotabaya Administration as it ushered into power. During the pandemic, people from both nations were very concerned of each other. All the Buddhist temples across the island chanted pirith to evoke blessings to all those affected by the virus. First Lady of China Peng Liyuan personally wrote a letter of appreciation to the students of Devi Balika Vidyalaya for their art work project in support China’s fight against COVID-19.
Yet, it became clear that there was a growing strain in the relations between Government to Government. It is not only China but our other time tested friends as Pakistan too seems pushed into the sidelines by Sri Lanka.
At a recent interview with Bloomberg earlier this month President Gotabaya noted that China appears to be shifting its strategic focus toward Southeast Asia and Africa. South Asian countries in financial trouble, President observed, are no longer getting the same attention from Beijing as before.
At the interview, President explained that Sri Lanka could not tap either the USD 1.5 billion Credit Line from Beijing or the USD 1 billion loan he personally requested from President Xi Jinping to buy essential goods. Though China had indicated it would help Sri Lanka, said President, they have added that “usually they don’t like” lending out more money to cover earlier debt payments.
There is a thought that to break the Western hegemony China should not be in competition with India or Russia, especially in terms of territory. After all, the worth of bilateral relations between India and China is over USD 100 billion. Therefore, China will focus on the Far East while leaving South Asia to India.
There might be some rational in this explanation. After all, Sri Lanka is not alone in her troubles. Neighbours as Pakistan and Nepal too are in the same situation. Nepal’s economic crisis and Pakistan’s political crisis not only took place almost simultaneously with Sri Lanka’s own economic and political crisis but similar in character as well.
Following President Gotabaya’s interview, the Chinese Foreign Ministry denied the speculation that China has abandoned Sri Lanka to her fate. The statement noted that “shortly after the Sri Lankan Government announced to suspend international debt payments, Chinese financial institutions reached out to the Sri Lankan side and expressed their readiness to find a proper way to handle the matured debts related to China and help Sri Lanka to overcome the current difficulties.”
Ambassador Qi, who met with PM Ranil Wickremesinghe last week too reiterated that the Chinese banks were ready to negotiate with Sri Lanka to handle matured debts.
US-Chinese Envoys’ tête-à-tête
It is in this backdrop where China and Sri Lanka, for reasons not yet apparent, is not seeing eye-to-eye on matters that US Ambassador meets Ambassador Qi. The press release that followed stated that the two counterparts had a “friendly discussion on broad topics of mutual interest” and that “China and the US could work together to help Sri Lanka overcome its current difficulties”.
In many ways this is cryptic. The two giants execute very different ideologies when helping other nations. Therefore, it is difficult to fathom at what points they agreed to help Sri Lanka or the reasons for it.
Immediately after this meeting the US International Development Finance Corporation approved USD 120 million in new loans to support Sri Lanka’s small and medium enterprises in the private sector. Whether this was a result of the meeting with the Chinese embassy or not is difficult to say.
Either way, Sri Lankan officials need to take this meeting seriously. Given the difficult relations we had with the US since the eradication of terrorism, when US normally says “Help Sri Lanka” it usually spells trouble for us. Now these two phrases in conjunction “help Sri Lanka” and “mutual interest” is very worrisome indeed.
History is not very comforting either at this junction. India’s official (not the real) excuse for falling out with Sri Lanka was Sri Lanka’s closeness to the US. Sri Lanka’s experience thereafter was terrible. Yet today, India and the US are partners and some of India’s actions can be even construed as being a front for US’s agenda. US hounding Sri Lanka at the UNHRC and India pressurising Sri Lanka to implement the 13A in full are the two faces of the same coin.
US’s actual reason for getting upset with Sri Lanka was Sri Lanka’s close ties with China and nothing to do with the alleged war crimes, which the West privately acknowledges amongst themselves never took place. Sri Lanka has had so many misadventures because of this falling out.
Suddenly China and the US are finding common ground apparently vis-a-vis Sri Lanka. Is this yet another dangerous turn for Sri Lanka is a serious question before us. Either way, it behaves on the Sri Lankan Government to reset the cordial relations we have had with China for thousands of years and not let bitter feelings over the delay of one Credit Line get in the way.
Fuel queues have led to hoarding and other corrupt activities.