How China's absence in Sri Lanka's economic meltdown creates strategic opening for India

China, not quite an iron brother of Sri Lanka’s like Pakistan, surprisingly stayed in the wings during Colombo’s economic meltdown last year, creating strategic space for New Delhi. Beijing and Colombo have for long had deep political and economic ties which have progressively built up with China’s stunning rise. Like in the rest of south Asia, China despite its distance from the Indian subcontinent, has been contesting India’s primacy in the region principally by the use of its deep pockets. It was therefore, puzzling that it left the field open for New Delhi when Colombo faced its first sovereign default in April 2022. It also shied away from its debt treatment plan. Sri Lanka was once touted to become the Singapore of the East, given its strategic geography and command over sea lanes of communication to what president Hu Jintao in 2009 called China’s Malacca dilemma. In order to skirt this challenge, it launched two overland corridors, one through Pakistan (CPEC) and the other via Myanmar (CMEC). It uses the Sunda Straits in the south of Malacca for its supertankers. China’s ties with Sri Lanka are longstanding and together with iron brother Pakistan, the two have tried to balance India. Anti-India sentiment in Sri Lanka is historical, given the centuries old threat from Chola kings in Tamil Nadu. The external threat is magnified by Sri Lankan Tamils residing in north and east along with 70 million Tamils across the 20-kilometre Palk Straits. This makes majority Sinhalese feel and behave like the minority. During civil war with Tamil Tigers, China helped Sri Lanka feel secure by providing military hardware including aircraft, artillery and tanks. In the year 2000 when LTTE (Tamil Tigers) overwhelmed Sri Lankan Army (SLA) at Elephant Pass and were advancing to Jaffna, India received an SOS for military assistance. New Delhi refused to oblige given that IPKF had been literally evicted from Sri Lanka by President Premadasa earlier. Instead India gave Sri Lanka, $500 million to buy military equipment. Luckily for SLA, LTTE hesitated to press the offensive and China and Pakistan came in with emergency supply of Multi Barrel Rocket Launchers to deter the Tamil Tigers. After this near military disaster, as the former GoC of IPKF south, I was sent to Colombo to make an on-spot assessment of SLA capability and potential to resist, deter and defeat LTTE. My investigations revealed that SLA with largely ceremonial roots, lacked offensive spirit and was heavily politicised at senior ranks. India’s reluctance to provide lethal weapons was because of the Tamil Nadu factor – Tamil Nadu politicians objected to military assistance to the Sinhalese military – thus creating strategic space for China and Pakistan to step in. Thirty-nine Tamil MPs exercised significant political clout in New Delhi’s Parliament, especially in the coalition government at that time. During SLA’s decisive offensive against Tamil Tigers from 2007 to 2009, New Delhi kept hedging Colombo’s request for supplying much-needed arms. Yet, National Security Advisor MK Narayanan publicly admonished Colombo for seeking military supplies from China. Although India played a significant passive role this time by not intervening to rescue the LTTE from defeat, China stole a march over it as India was seen the trainer and abettor of LTTE. Beijing managed to carve a special place among the Sinhalese and the ruling Rajapaksa family. After their great victory, Colombo’s payback was in awarding numerous development projects to China in the South. Then president Mahinda Rajapaksa began spending beyond the country’s means, such was the euphoria following the military triumph. Sri Lanka’s indebtedness to China was largely of its own making as Chinese companies constructed white elephant projects with aid from Chinese banks at much higher interest rates than was available elsewhere. The Hambantota Port and Special Economic Zone project, costing $3 billion was first offered to India in 2007 but was finally made by China. Unable to pay back the loan, Sri Lanka was forced to give it on lease for 99 years to the Chinese Harbour Company in 2016 when Ranil Wickremesinghe, currently president was prime minister. The Rajapaksa Mattala International Airport, Rajapaksa Stadium, Colombo Port City and National Expressways all constructed by China opened the debt trap. During Gotabhaya Rajapaksa’s disastrous term as president, Chinese were favoured with contracts such as a solar power plant in India’s backyard off Jaffna, and another cancelling an India-Japan joint venture at Eastern Container Terminal in Colombo Port. The project off Jaffna was later cancelled and awarded to India. Chinese largesse included a special birthday gift in 2018 of $500 million for projects in president Maithripala Sirisena’s constituency. Politically, Chinese became a formidable entity that was able to dissuade Sri Lanka from accepting $500 million MCC grant from US to counter BRI. The bitter feud between ambassadors of US and China in Colombo at the time is unforgettable. The Galle Face Green horizon now has Chinese built hotels and residencies. SLA’s new army headquarters is Chinese-built and funded. Sri Lanka’s total debt in $83 billion, 128 per cent of GDP. External debt is $41.5 billion of which $7 billion is owed to China. During Sri Lanka’s first sovereign default in April 2022, approaching IMF for bailout of $3 billion and the rescue efforts including debt treatment China preferred to stay out allowing India to take the lead. Foreign Minister Ali Sabry said China will not join the Debt Treatment Plan but support bilaterally. It attended the 17 creditors’ Committee, co-chaired by Japan, India and France as observer. India used its G20 Presidency, QUAD partners and Paris Club (though it is not its member) to lobby for IMF package. Its own USD4 bn assistance package on reasonable payback terms has been appreciated. Although Wickremesinghe was unable to prevent Chinese spy-ship Wuan Yang 5 from berthing in Hambantota, he has managed to restore held up projects awarded to India. Ironically, Sri Lanka’s economic meltdown provided India the opportunity to push back China and win back the trust of Sinhalese. It is a minor mystery why China let India take the lead in alleviating Sri Lanka’s economic distress and obtaining IMF package. While New Delhi may have failed the Tamils it has finally impressed the Sinhalese. Still in the ongoing Great Game, China may be down not out. The writer is a retired army veteran. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .