Impact of America’s Indo-Pacific strategy on Sri Lanka
Posted on March 3rd, 2022

by Neville Ladduwahetty Courtesy The Island

A document on the United States Indo-Pacific Strategy issued by the White House, in February 2022 states: The United States will pursue five objectives in the Indo-Pacific – each in concert with our allies and partners, as well as with regional institutions”. We will:

* ADVANCE A FREE AND OPEN INDO-PACIFIC

* BUILD CONNECTIONS WITHIN AND BEYOND THE REGION.

* DRIVE REGIONAL PROSPERITY.

* BOLSTER INDO-PACIFIC SECURITY

* BUILD REGIONAL RESILIENCE TO TRANSNATIONAL THREATS”.

Continuing, the document states Our collective efforts over the next decade will determine whether the PRC (Peoples Republic of China) succeeds in transforming the rules and norms that have benefitted the Indo-Pacific and the world. For our part, the United States is investing in the foundations of our strengths at home, aligning our approach with those of our allies and partners abroad, and competing with the PRC (Peoples Republic of China) to defend the interests and vision for the future that we share with others … Our objective is not to change the PRC but to shape the strategic environment in which it operates, building a balance of influence in the world that is maximally favourable to the United States our allies and partners, and the interests and values we share”.

As far as the Pacific is concerned, with the conclusion of World War II the US has been developing, what the document describes as ironclad treaty alliances with Australia, Japan, the Republic of Korea, the Philippines and Thailand”. Treaty arrangements of a similar order do not exist with countries in and around the Indian Ocean. Consequently, it is in the interest of the US to support a strong India as a partner” to Bolster Indo-Pacific stability”. In such a context the US strategy is to strengthen the Quad as a premier regional grouping and ensure it delivers on issues that matter to the Indo-Pacific”. With the US, India, Japan and Australia making up the Quad and Japan and Australia being in the Pacific, it remains for India to be the premier” member of the Quad to deliver on matters of interest to the Quad in and around the Indian Ocean.

IMPLICATIONS of ‘A STRONG

INDIA’ on SRI LANKA

Since the stated strategy of the US is to build influences that would be ‘maximally favourable to the US, and if India is to be the ‘premier’ partner in the equation there is no doubt that Sri Lanka would not be able to escape unscathed. It is in such a background that the report in The Island titled India, SL close to sealing three defence-related pacts to boost maritime security” (February 25, 2022), should be treated with extreme caution. Continuing the HT report cited in The Island states: While a USD 1 billion line of credit to be provided by India to Sri Lanka to purchase food, medicine and essential items will be the focus of Minister Rajapaksa’s visit, the two sides are close to finalising three defence-related agreements and arrangements that will bolster the capabilities the capabilities of Sri Lanka’s armed forces and boost corporation for maritime security”.

In addition to arrangements for the purchase of two Dornier aircraft and the acquisition of a 4,000 tonne naval floating dock by Sri Lanka, Colombo has agreed to post a naval liaison officer at the Indian Navy’s Information Fusion Centre-Indian Ocean Region (IFC-IOR) in Gurugram … The centre tracks merchant shipping and monitors threats such as maritime terrorism and piracy in regional waters. The Sri Lankan liaison officer will join counterparts from 10 of India’s partner nations, including Australia, France, Japan the Maldives, Singapore, the UK and the US. The naval floating dock is a facility equipped with automated systems for the quality and swift repairs of warships. Such docks have the capability to lift large ships such as frigates and destroyers, and are designed to be berthed alongside a jetty or moored in calm waters to carryout planned or emergency repairs of ships”.

Another potential area for defence corporation is the expansion of training for Sri Lankan military personnel in Indian facilities and institutions. Along with the erstwhile Afghan national security forces, Sri Lanka has been one of the biggest beneficiaries of military training programmes offered by India”.

Over the past few months, India has extended financial assistance to Sri Lanka as part of a four pillar package decided during Minister Rajapaksa’s las visit to New Delhi in December. The Indian side has provided a USD 500 million line of credit for purchasing fuel and a currency swap of USD 400 million under Saarc facility. It has also deferred the payment of USD 515 million due to the Asian Clearing Union”.

The finalization of the long-gestating project to refurbish and develop the British era Trincomalee oil farm, and 850-acre storage facility with a capacity of almost one million tonnes, has also given a boost to bilateral corporation”.

MEASURES ADOPTED TO MAKE A STRONG INDIA”

The Trinco Oil Tank Farm deal that was signed on 06 January 2022 is claimed as a major achievement by Energy Minister Minister Gammanpila. Such a claim could be justified considering that all 99 tanks had been leased for 99 years according to the agreement signed in 2017 by the former government, and the current agreement reclaims 24 tanks to be developed and operated exclusively be Sri Lanka, and the remaining 61 tanks are to be developed and operated jointly by India and Sri Lanka.

However, it cannot be overlooked that the timing for the deal is such that it favours India’s strategic interests as the premier’ member of the Quad in and around the Indian Ocean, more than Sri Lanka’s economic interests. Since the scope of the three defence-related agreements are not in the public domain, it is not possible to ascertain the extent to which these defence-related agreements would favour India’s strategic interests and whether they are at the expense of Sri Lanka’s interests or not.

A clear example of this is in the HT report cited above that refers to agreements for the purchase of two Donier aircraft and the acquisition of a 4,000 tonne naval floating dock by Sri Lanka”. The question is, whose interests would be served by these assets? Since Sri Lanka already handles all repairs to naval vessels in existing dry dock facilities at the Colombo Port, why should Sri Lanka acquire a floating dock?

The strangest aspect of this arrangement would be if Sri Lanka acquires these assets through the Lines of Credit generously offered by India. Under such circumstances, why should Sri Lanka be grateful because Sri Lanka would be acquiring assets beneficial to India’s interests with money that has to be paid back to India by Sri Lanka. On the other hand, are these Lines of Credit in exchange for the West Container Terminal, in which case should Sri Lanka be grateful because it is a case of pure balancing. Instead, if Sri Lanka acquires the aircraft and floating dock and grants the West Container Terminal to India as well, Sri Lanka would be a big-time loser and it will be a win-win for India.

As far as Lines of Credit (LoC) arrangements go, a reported experience with India was the delivery of items for the Sri Lanka Railway. According to media reports the carriages were not only made of inferior material but also that they cannot run on the existing tracks. This means Sri Lanka has decided to accept substandard goods from India without a murmur unlike its response to China for the delivery of sub-standard fertilizer.

LoCs are essentially arrangements where a loan is advanced to a country to facilitate the sale of goods of the lender that cannot face competition in the open market. In short, it is a loan given to advance the lender’s products and self-interest. In such a context, acquisition of a floating dock by Sri Lanka and mooring it the Trinco harbour to service the ships that serve the restored oil tank farm would serve the interests not only of India but also the wider interests of the Quad – all provided by the Credit Line offered to Sri Lanka by India.

Although the Oil Tanks at Trincomalee by themselves do not have a utilitarian value, they are transformed into a valuable asset when they are coupled with a functioning harbour. Since it is the harbour coupled with the tanks that make the Tanks a vital asset, assigning 49% shares to an Indian Oil Company is totally disproportionate. This makes the agreement of 06 January 2022 unacceptable and therefore grounds for rejection. The tanks should operate under the full control of Sri Lanka and servicing any naval vessels would then be a commercial undertaking without any strategic overtones.

If instead, the tanks and the harbour operate under the terms of the current agreement, where an Indian Company owns 49% of the shares, Sri Lanka would inadvertently be sucked into the vortex of India’s role as a premier” partner of the Quad. How such a perception would be viewed by China is an unknown. Whatever it may be, such a perception would compromise Sri Lanka’s stated position of neutrality, because the measures that must necessarily be adopted under these agreements and arrangements would be seen as leaning towards India and away from relationships that exist between China and Sri Lanka.

Notwithstanding the exuberance of Minister Gammanpila, if he understands that the utilitarian value of the Tanks depends on the services that the Trinco Harbour is able to offer, not only in terms of direct costs associated with them but also with the cost to relations with China, he as a nationalist, should explore a different track so that the tanks could be developed without having to balance the strategic interests of major powers. That track would be to cancel the agreement of 06 January 2022 and retake all 99 tanks and develop a few tanks at a time as a national venture in keeping with the pace of development to improve the service at the Trinco harbour.

CONCLUSION

The intent of the US, declared in a document issued by the White House dated February 2022 titled Indo-Pacific Strategy states: Our collective effort over the next decade … is not to change the PRC (People’s Republic of China) but to shape the strategic environment in which it operates, building a balance of influence in a world that is maximally favorable to the United States”. To achieve this objective, the US is prepared to support a strong India as a partner in this positive regional vision” as a premier partner of the Quad, the others being the US, Australian and Japan. The Maldives has already signed defence-related agreements with the US and India. According to a report in The Hindustan Times cited by The Island of February 25, 2022, India and Sri Lanka are close to finalizing three defence-related agreements and arrangements that are expected to boost corporation for maritime security”. The scope of these agreements is not known to the public. The public is also not aware whether there are similar defence-related agreements with the US and China. The concern of the public however is what kind of impact these and other agreements would have on Sri Lanka’s sovereignty and independence, and to what degree all of this would compromise its stated policy of neutrality.

If the purchase of aircraft and the acquisition of a 4000 tonne floating dock is to support a strong India and assigning the West Container Terminal also to India is an attempt at strategic balancing, China is likely to perceive such developments as leaning towards India and the Quad. Such perceptions would have serious consequences on China-Sri Lanka relations. Furthermore, while China’s relations with Sri Lanka are mainly driven by strategic issues relating to its Belt and Road Initiative, in the case of India, the relationship goes beyond strategic issues because it is compounded by Sri Lanka’s nagging national question that impacts on India’s internal stability. Therefore, there cannot be strategic balancing as far as Sri Lanka’s relations are concerned with India and China. Consequently, Sri Lanka has no alternative but to stay free of being dragged into the vortex of a strong India supported by the Quad. One clear signal of staying free is to disengage from the agreements signed on January 6, 2022, and restore a few of the tanks at a time as a national venture and rent them for the storage of petroleum products.

The understanding under the Indo-Sri Lanka Accord was that the tanks should be developed and operated jointly with India. However, with Quad supporting a strong India the strategic environment has changed substantially from what existed at the time of the Accord. Consequently, in today’s context agreements that favour India would be perceived as leaning towards India and the Quad. Such a perception is not in the interest of Sri Lanka because it contradicts its policy of Neutrality. Therefore, Sri Lanka should stay clear of defence-related agreements with any power block, as it did with the MCC, if Sri Lanka is to be independent and to stay true to its principles and protect the sovereign rights of its people.

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