Dollar banknotesUnlike China, US Won’t Support Massive Infrastructure Investments in South Asia, Analyst Says
Posted on October 28th, 2020


In the run-up to Mike Pompeo’s Sri Lankan visit, the US Principal Deputy Assistant Secretary Dean Thompson asked Colombo to make difficult but necessary decisions,” referring to cutting reliance on Chinese investment. However, America’s hopes were dashed on Wednesday as Sri Lankan foreign minister told Pompeo that Colombo will stay “neutral”.

The US lacks the political will to invest in big-ticket infrastructure projects in the South Asian region to compete with China, Professor Sumit Ganguly, a South Asian expert and the Rabindranath Tagore Professor at US’ Indiana University, tells Sputnik.

“The US certainly has the resources. However, I do not yet see the configuration of political forces to support a massive set of infrastructural investments in the region,” reckons Ganguly, also a member of New York-based think tank Council on Foreign Relations (CFR).

The heyday of such US programmes ended with the Cold War,” he adds.

The remarks come amid a renewed push by the US seeking a greater involvement of smaller South Asian countries, particularly Sri Lanka and the Maldives, in the Washington DC-backed ‘Indo-Pacific Strategy’. US Secretary of State Mike Pompeo arrived in Colombo on Tuesday evening for a two-day trip, which will be followed by a stopover in the Maldives, before he heads off for Indonesia in his four-nation tour that kicked off in India on 26 October.

During his joint press briefing with Pompeo on Wednesday, Sri Lanka’s foreign minister Dinesh Gunawardena emphasised that Asia’s oldest democracy would remain “neutral” and “non-aligned”.

Foreign investments in the post-COVID economies of smaller South Asian nations are being viewed as major means of economic support. Reports in Sri Lankan media ahead of Pompeo’s trip claim that Colombo was more concerned about foreign inflows than getting involved in the US-China geopolitical rivalry.

The US has always had a certain level of interest in India’s South Asian neighbors. However, with the Chinese Belt and Road Initiative (BRI), it has taken a greater interest in them. This was virtually inevitable given that the influence of Beijing in these states has grown significantly within the past decade,” highlights Ganguly.

China is the biggest foreign investor in Sri Lanka, dwarfing foreign inflows from other countries by a significant margin. Although the US is Sri Lanka’s biggest export market and a major development partner, it has been unable to match the Chinese economic might in the region.

Among the big-ticket projects, China Harbour Engineering Company (CHEC), a subsidiary of state-owned China Communications Construction Company Limited, is currently developing the $1.4 billion Colombo Port City Project.

According to a March 2020 study by the London-based Chatham House think tank, Chinese infrastructure investment in Sri Lanka amounted to $12.1 billion between 2006 and July 2019.

Similarly in the Maldives, where Pompeo will be the first US Secretary of State to visit in 16 years, China has also emerged as the biggest investor in recent years.

In fact, Beijing is the largest foreign source of investment in Pakistan, Myanmar, Sri Lanka and Maldives, according to a 2018 study by Mumbai-based Gateway House think tank.

Commenting on US’ policy towards South Asia, Ganguly recalls that it was only during the second term of former President Barack Obama that the US started to take note of increasing Chinese influence in the region.

Quite frankly, the Obama administration should have taken cognisance of the steady Chinese penetration of the region but it did not as it was preoccupied with other matters,” he says.

Now Pompeo, quite belatedly, is trying to play catch up as the first (and perhaps only) Trump administration is coming to a close,” adds the American expert.

Ganguly dismisses speculation that a potential Joe Biden presidency would significantly change America’s policy towards South Asia, though he does concede that the tone” of US foreign policy could well be different.

Though the tone will change under a Biden presidency I do not think that China policy will undergo a drastic transformation. There is a rough and ready consensus in the United States on China policy,” he explains.

Ganguly also underlines that the US’ designation of India as a major defence partner” and Pivot to Asia” were significant developments for the overall South Asian region, which India has traditionally viewed as its own backyard.

One Response to “Dollar banknotesUnlike China, US Won’t Support Massive Infrastructure Investments in South Asia, Analyst Says”

  1. Nimal Says:

    For good or bad Joe Biden will be the same old wine in a new bottle.
    US must fund our private companies to expand and lending their expertize in technology thus providing local jobs.US and other progressive developed countries must ease visa restrictions for Srilankans to travel abroad.
    No Sri Lankan government ever confront this unfair restriction on her citizens and I would make it reciprocal. I think it is a violation of human rights of the citizens of the island. Respective balu regimes of the past never stood for her people who are prisoners in their country.I feel really guilty that my foreign passport allows me easy access to many countries but my folks left behind aren’t that privileged.

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