China’s Influence On Lanka

Source: The Hitavada      Date: 01 Sep 2017 12:03:44

By ARUN SRIVASTAVA

After Mithripala Sirisena came to power in January 2015 promising to loosen ties with China after a decade of hefty funding by Beijing under his predecessor, Modi visited the island and promised to “script a golden chapter in the history of India-Sri Lanka relations”. But surprisingly, Beijing’s influence continues to be on the rise again as Colombo struggles to find alternative sources of foreign capital.

SRI Lankan President Maithripala Sirisena last week sacked the outspoken Justice Minister Wijeyadasa Rajapakshe for publicly criticising the Government’s $1.1 billion deal with China to develop the strategic Hambantota port. His sacking was recommended by Prime Minister Ranil Wickremesinghe, who was angry with Rajapakshe for questioning the government’s July 29 decision to sell a 70-per cent stake in the port to a Chinese firm, a move that could raise security concerns in India.


The Sri Lankan Government has been conscious of the fact that the Chinese firms have merely been concerned with their own interest. But they were unable to effectively counter the Chinese moves. The fact of the matter is that China’s investments in the Sri Lankan ports of Colombo and Hambantota have not only plunged Sri Lanka into debt, but raised questions about the security and defence consequences of Beijing’s use of economic statecraft, including in renewal of Sino-Indian rivalry.


Some Sri Lankan bureaucrats and ministers are quite sceptical of the Chinese moves. The Sino-Sri Lankan relationship was fundamentally transformed by the 2005 election of President Mahinda Rajapaksa. Within weeks of taking office, he approached Delhi for military aid to crush the LTTE struggle. However, with India refusing to fulfil his demands, Rajapaksa turned to the US, which also refused to comply with his request since Sri Lanka was blatantly violating human rights in the LTTE conflict. Washington, in fact, had “drastically reduced its foreign assistance package for Sri Lanka.”


This situation provided the right opportunity for China to fill the void in the defence realm. In 2007, Rajapaksa secured a $37 million deal for Chinese ammunition and ordnance. Rajapaksa had upgraded Sri Lankan ties to a “strategic cooperative partnership” and opened Colombo’s doors to massive Chinese entry. The real prize for China, however, were the ports connecting China to its energy suppliers in the Middle East and Africa. Rajapaksa used all mechanisms to keep India away.

Besides signing the first arms agreement with China in 2007, Rajapaksa inked a separate deal to lease land to a Chinese consortium at Hambantota. The importance of Hambantota project for China could be understood from the simple fact that in 2010, Beijing lent Sri Lanka an additional $200 million to build a second international airport near Hambantota, and in 2012 offered $810 million for the second phase of the port project. In November 2013, Chinese firms were contracted to build a $272 million railway in Sri Lanka, “the first new railway construction in Sri Lanka within a century.”

Incidentally a large section of the people including the political leadership was feeling anguished at India being kept away from the construction projects. Some in Sri Lanka and across the Palk Strait even began voicing concerns about Colombo’s embrace of China and its growing indebtedness to Beijing. Since 2005, China had funded and constructed 70 per cent of new infrastructure projects, overtaking Japan as Sri Lanka’s largest donor. Chinese non-military aid soared from a few million dollars in 2005 to $1 billion in 2008. An additional $5 billion in aid and loans was distributed between 2009 and 2015.


When Chinese President Xi Jinping visited Colombo in September 2014, the Chinese-funded Hambantota Port was haemorrhaging money. Colombo was paying $30 million per year in interest payments alone. China made its intentions clear when Chinese submarines appeared on its geopolitical doorstep. Later that month, Indian Prime Minister Narendra Modi had personally reminded Rajapaksa that Sri Lanka “was obliged to inform its neighbours about such port calls under a maritime pact.”

Yet the same submarine resurfaced in Colombo in November, again without prior notice to Delhi. After Mithripala Sirisena came to power in January 2015 promising to loosen ties with China after a decade of hefty funding by Beijing under his predecessor, Modi visited the island and promised to “script a golden chapter in the history of India-Sri Lanka relations”. But surprisingly, Beijing’s influence continues to be on the rise again as Colombo struggles to find alternative sources of foreign capital. Some sections of the Sri Lankan policy makers and politicians feel that India clearly wants to keep Sri Lanka within its sphere of influence but is not quite responsive to the financial needs of the island.

China is pushing its way into Sri Lanka, spending US$ 8 billion to build infrastructure to support its ambitious global One Belt One Road (OBOR) project. Interestingly, facing a serious challenge from China in the South China Sea, Japan has been making determined moves to see that the Indian Ocean island does not become a Chinese client state.


China has supplanted it as Sri Lanka’s single largest donor. During the 30-year war, China sold military hardware to the Sri Lankan armed forces, filling the gap created by the Western powers, which had refused to sell military equipment to Sri Lanka citing human rights concerns.


Violent protests broke out in January after the Government announced a deal with China to develop the port and build a massive industrial zone. 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 to India. 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 coastal states of the Indian Ocean.


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. 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.

Interestingly, Sri Lanka’s national debt stands at around $64 billion, or 76 pc of gross domestic product, one of the highest among emerging economies. It owes China over $8 billion. For now, Hambantota remains a sleepy outpost. Four years after the port and airport were completed, there is one flight a day and barely five to six ships docking each week. The highway leading to the town is largely deserted, a new conference hall is unused and even a large cricket stadium built by the Chinese is used mainly for wedding receptions.