ECONOMY PLUNGES LANKA IN POLITICAL TRAP
Posted on March 31st, 2017

WINSTON DE VALLIERE Courtesy Ceylon Today

In quite a paradoxical change in policy that at first imbued confidence in India, the US and other countries concerned with what is broadly termed Chinese expansionism, has now done away with the sense of relief in the context of their perceived national security and other fears.

Former President Mahinda Rajapaksa’s dalliance with China and the visits by Chinese subs to Colombo triggered a whole swath of reactions from India, the US and UK while the EU as a whole, including its non-NATO European nations, saw the sudden Chinese foothold in Colombo, far from the Malacca Strait, as a huge quantum leap of the Chinese military presence nearer home. To Narendra Modi, that Rajapaksa Policy set off a chain of decisions in Delhi that ended with Rajapaksa’s ouster from power so quickly that we saw a stupefied former President drive away from Temple Trees and lose control of the Sri Lanka Freedom Party.

The new government quickly set about making a show of altering Rajapaksa’s policies, blew hot and cold on the Colombo Port City and then, after a series of environmental and other sorts of tests which took Delhi for a short ride, restored the Port City project to China with minimal changes to the original agreement. It then followed up, to Delhi’s anger and amazement, with a similar offer to the Chinese relating to the Hambantota Port. That Rajapaksa led his joint opposition to the streets to vociferously condemn the planned farming out of some 20,000 acres of land in his electorate to China had even the Chinese in stitches. It led to the Chinese envoy in Colombo having a chat with Rajapaksa and that protest fizzled out as quickly as it arose. Rajapaksa had just a few weeks before that returned from China with pledges from some quarters that we can only guess at, to back his ‘return-to-power’ campaign. The Chinese envoy also brought an abrupt end to Finance Minister Ravi Karunanayake’s ranting about Chinese interest rates…but not about the mountain of debt (estimated at over $8 billion or roughly Rs 1,500 billion), that China’s friendly assistance to Rajapaksa left the country saddled with. Instead of countering with that cogent argument, Karunanayake went into a shell, though the government made noises about the Chinese envoy speaking out of turn and not in the best traditions of diplomatic etiquette. It was following this that Beijing smoothed it over with an official statement. But it came short of censuring its envoy in Colombo. That string of events ended with Beijing subtly tightening the screws on Colombo just enough to force the government to fall into the trap of apparently only having to swap debt for equity.

In fact, as things have turned out and as other factors emerge, it would appear that the government had swapped not merely debt for equity, but has also swapped India’s and the US’s regional security along with that debt. Knowing full well that the Lankan Government had naively blundered beyond belief, instead of risking a confrontation with China, India kept her distance but the US moved quickly as this column pointed out earlier, and arranged for the Pacific Partnership Exercises to be held in Hambantota with perhaps a US presence in the near future in the south itself.

Trincomalee port to India

Minister for Regional Development, Field Marshal Sarath Fonseka, told journalists in New Delhi on 18 January that terms were discussed to give Sri Lanka’s Trincomalee Port to India. Prime Minister Wickremesinghe reportedly vouched for the veracity of that statement in Davos, Switzerland and India is now interested in a stake in the Port of Colombo.

But Hambantota has renewed strains in Indo-Lanka relations because Colombo seems to have naively lost sight of the fact that in India’s perceptions she sees China encroaching inexorably on all sides via so-called development projects in Bangladesh, Myanmar, the Maldives, and Pakistan, in addition to Colombo and Hambantota.

Trincomalee port, initially developed during WWII as a base by the British Royal Navy, has the deepest natural harbour in all of South Asia and holds ten times more water (read larger warships, submarines) but only serves as a minimal cargo port. The need to develop Trincomalee harbour into a major deep sea blue water port is beyond the Lankan government’s capacity and India will want to secure this at least for herself in a bid to counter the once again growing Chinese foothold in Sri Lanka.

President Sirisena and Premier Wickremesinghe have said that Colombo and Hambantota will not be allowed for any form of military use. But just in case, Delhi had several months before decided to increase its own presence in Lanka by pumping in US$ 2 billion into infrastructure projects especially in the North and North-central regions but has shown no real interest in pumping a single dollar into developing the Trincomalee Port.

What Sirisena would need to come to grips with is the fact that just as much as the South Bloc helped him come to power, so can Narendra Modi , who’s more deeply entrenched in power in India unlike Sirisena in Sri Lanka, set in motion new forces to unseat Sirisena and install Wickremesinghe in absolute power. This might see the divided SLFP factions closing ranks once again. But with even the President saying that he can do nothing about saving servicemen found guilty of the killings of journalists and sportsmen, so will Wickremesinghe ensure prosecution of those cases more speedily, not for the intention of merely punishing the servicemen found guilty of those killings, but because the investigations also more importantly point to involvement of persons close to the Rajapaksa regime who will also be allowed, as the President said on Tuesday, to face prosecution.

The question is this: Who are those top politicians who…in addition to those servicemen… who will also face prosecution and hence be sent into political obscurity, perhaps before the next general election? I said over a year ago that the government will hold back its bigger guns for use closer to election time when it can be fully exploited to turn votes against the Rajapaksas.

Suddenly, that seems to be happening now, with the President saying he will not allow soldiers to be prosecuted for war crimes. He has never said he will not permit anyone to be prosecuted for other crimes: soldiers and politicians! Killing two birds with one stone, having dropped another stone!

The plan seems to be to ensure the Rajapaksas never make a successful come-back bid. If that works, Ajit Doval can be content with the fact that China’s apparent victories in Hambantota and Colombo will be no more than pyrrhic.

Uttar Pradesh victory

Modi’s runaway victory in last week’s Bharatiya Janata Party’s stunning landslide rout of other parties in State polls in Uttar Pradesh, not surprisingly evoked great interest in Beijing and Washington, as an upbeat Modi could take a harder line with Colombo on the China issue.

The Uttar Pradesh victory is seen as a virtual 2019 Lok Sabha election victory for Modi, too. The implications of a doubly stronger Modi in Delhi will make him more attractive as an ally in the Indian Ocean region where the border issues with Pakistan ultimately led to SAARC – virtually to a country – sidelining Pakistan from the regional body.

Least of all will Modi’s advances be received in neighbouring Pakistan who was exploring the possibility of creating a greater South Asian Economic Alliance in a bid to break India’s influence in SAARC, in a wider extra-regional grouping including Pakistan’s friends China and Iran. Insiders say Sirisena and Wickremesinghe will have nothing to do with the Pakistani idea that has been floated. But with SAARC set to take a backseat against BRICS, that will see India under Modi assuming wider economic weight in the region via an organization sans Pakistan…and hence without the indirect Chinese influence that Pakistan has tried to bring in to negate India’s control in SAARC. With ETCA about to be entered into, Colombo will increasingly find herself dependent on a wider Indian than on a Chinese market for exports while trade with China will be more China-weighted.

As Modi tightens his grip on power, it is expected that he will not only get tougher with domestic policies but will be able to negotiate more India-centric foreign policy stances with any of the major countries which see India as an increasingly more promising economic and political partner. Modi will, with more power, be a man who can talk down from a position of strength, unlike, for example the Lankan leader who does not have that luxury to negotiate with. And should Sirisena walk too close with China he will be risking the ire of India as a whole and that could have devastating effects on whether he can be a success or a failure in northern politics.

Modi can change Sirisena’s vote base with one single policy shift, should Sirisena’s policies impose such decisions on the Indian Premier.

But, despite not having that facility, President Sirisena still seems to be eminently capable of – to date – ensuring his government is not unduly cowed by any big powers. This is amply underscored by his retaining the right to adopt clear stances on issues such as the major one now before the UNHRC. But again, unlike Modi, Sirisena cannot take the risk of offending any of the major players on the world scene, for the simple fact that his sustainability in power is as, if not more, dependent on those very powers as on domestic factors in Sri Lanka where an aggressive though impotent China-backed opposition is also very pro-Pakistan and anti-Modi cum US. It will hence prove beneficial to Sirisena to now hit while the iron is hot and enter into the long delayed ETCA with India where the export growth potential for Lankan exports far outstrips the advantages a comparatively much smaller market could ever offer Indian exporters. That agreement is one placing the accent on economic and technical cooperation and would suggest a greater inflow of investments technological transfer from India to Sri Lanka, two factors we need most right now even if it means having to permit a limited inflow of Indian expertise as an adjunct to this agreement. It can always be arranged on a mutually agreed phased out time frame to ensure that the agreement is mutually beneficial to both countries. A Modi Government going on all the way through to 2024 with assurances of stability in economic policy will work in Lanka’s favour.

Modi’s close rapport with both Sirisena and Premier Wickremesinghe are bonus factors which need further enhancement and will be much more preferable to have to deal with as a post-2019 administration in Delhi and other States, than with a new administration that might not be as disposed to the Lankan Government on issues before the UNHRC.

While Sirisena keeps his options open relating to foreign policy stances, it is clear that visits such as the one to Moscow are aimed at helping Premier Wickremesinghe to shore up Lanka’s export development process and not stick to a rigid policy stance that Putin could assume is one that runs counter to his own political ambitions.

In this, Modi differs from Sirisena and Wickremesinghe in that, while Modi can afford to some extent to inadvertently or deliberately offend others in his foreign policy stances, Sirisena cannot afford that luxury considering the enormous crises dumped in his lap by the former Rajapaksa administration.

For now, in the emerging Indian Ocean region US-centric maritime and air defence architecture, Sri Lanka and India would seem to be playing complementary roles, though essentially separate ones and this alone will necessitate a mutual Delhi-Colombo interdependence which is something Modi simply cannot depend on from a Rajapaksa-led government. So he can’t turn the screws too tight on Sirisena too. This factor will go a long way in the emerging military dynamics in the immediate Indian Ocean region towards imposing on Modi a need to be on best of terms with Sirisena and Wickremesinghe. The deal will hence be mutually beneficial, and perhaps more so in Sri Lanka’s favour, especially until the furore at the UNHRC blows away hopefully by 2019, about the time when Modi will be returned to power in India.

3 Responses to “ECONOMY PLUNGES LANKA IN POLITICAL TRAP”

  1. Christie Says:

    Mauritius is an Indian colony and ours is too.

    With these two at either end the Indian Empire can put a drag line across the Indian Ocean.

  2. Ananda-USA Says:

    It us not the ECONOMY that is PLUNGING Sri Lanka into a TRAP!

    It is the DESHADROHIYAS of an EVIL Yamapalanaya that is PLUNGING Sri Lanka into a TRAP!

    EVERYTHING that the Yamapalanaya is doing is DESIGNED to DESTROY our beautiful Motherland!

    There will be NO FORGIVENESS for this EVIL YAMA-Kalliya in the future!

  3. Ananda-USA Says:

    It is ENTIRELY WITHIN OUR POWER to OUST the Yamapalanaya and RESCUE our Motherland!

    It is our BOUNDEN DUTY to do so by RESTORING a DESHAPREMI government to our country as SOON as POSSIBLE!

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