By Asanga Abeyagoonasekera, Executive Director SAFN

‘China wishes to push forward BRI in Sri Lanka fully’

‘Agreement on Chinese Marine Scientific Research Despite the Moratorium’ 

‘Chinese Debt restructuring promises and expansion of Chinese investment portfolio in Sri Lanka’

‘Attempt to implicate India in the Easter Sunday Terror attack and Sri Lanka becoming an Indian sub-colony’

Six months before the presidential elections, Sri Lankan Prime Minister Dinesh Gunawardena visited China to meet Chinese Premier Li Qiang. During the meeting, Li Qiang said, “China and Sri Lanka are strategic cooperative partners featuring sincere mutual assistance and ever-lasting friendship.” These strategic relations were cemented in 2014 by Mahinda Rajapaksa during President Xi’s visit to the island, which opened up access to many strategic areas, including the ports, energy, telecommunication, roads, security, and trade. Unfortunately, the Chinese projects under BRI were not a straightforward success story, which is discussed in my book ‘Teardrop Diplomacy .’The BRI projects in Sri Lanka developed by burdening the economy with high debt and high-interest borrowing rates, with no expected returns, such as the empty airport without flights in Mattala and a Special Economic Zone at the Port City in Colombo still waiting for Chinese or foreign investment to flow in after years of development. 

BRI projects in Sri Lanka and Cambodia

BRI has traversed in its geostrategic path, especially targeting the Global South; I recently visited Cambodia, another BRI nation, where the Scholars and officials at the Royal Cambodian Academy of Foreign Affairs (RAIC) said, “We have a better model than Sri Lanka,” referring to the 99-year lease agreement of Sri Lanka’s southern port Hambantota. I visited Siem Reap-Angkor International Airport, which has a similar Chinese architectural character, reminding me of Mattala Airport in Sri Lanka. The Cambodia airport was leased out for 55 years as a build-to-operate (BOT) model to China, a better model than the Sri Lankan Mattala Airport, which is not functioning, and the government is searching for investors to operate. Another infrastructure is the highway network connecting the Airport in Siem Reap. Most of the Siem Reap local population I interacted with saw no prospects from the Chinese projects to their livelihood; the taxi driver asked me with a smile, “You call this a highway?” Due to the narrow width limited to two-ways only, the surrounding infrastructure along the highways was not developed, and there was no job opportunity nor industries created for locals from the Chinese infrastructure. Unlike Cambodia’s Special Economic Zone, Sihanoukville, Sri Lanka is far behind in its Port City. Sri Lankan Prime Minister Dinesh Gunawardena is well aware of the Chinese mess-ups on the island since he was the same person who questioned when he was Foreign Minister, saying, “We need to revisit the Hambantota port agreement since the previous government had agreed to a 99-year lease with the option of another 99 years” blaming the Ranil Wickremasinghe regime in the past who signed the agreement. Strangely, he is now serving as the Prime Minister, serving Wickremasinghe as the President. 

In the official statement from China on the Sri Lankan Prime Minister’s visit, there was a reference to ‘fully push forward the implementation of important projects under the framework of Belt and Road cooperation.’ Hopefully, this push forward will involve revisiting the projects and adopting a better process than in the past. Chinese projects directly impacted the country’s economy, which suffered immensely, paving the way for its bankruptcy. India was the first nation to rescue the Sri Lankan economy with nearly USD 4 billion and provide the essentials to keep the economy moving. These were the prudent measures taken by Foreign Minister Jaishankar and India’s leadership at the top. Today, unfortunately, India is targeted by several ultranationalists in the domestic political arena, accusing Indian projects of being invasive and continuously propagating a false narrative of “Sri Lanka becoming India’s sub-colony .”Another recent development was the false propagation projected by former President Sirisena, implicating India in the Easter Sunday Terror attack, according to the Sunday Times. These are baseless claims propagated to mislead the Sri Lankan polity towards the Ultra-nationalist narrow corridor where India will be targeted under the National Security pretext—a popular narrative used against India throughout Sri Lankan political history. China will welcome this political pitch and harp its famous line, ‘China will not intervene in domestic politics of Sri Lanka.’ China is a proven case in Sri Lanka for political funding during elections, especially the Rajapaksa’s in the past. And they were supporting some of the ultra-nationalists who propagated such attacks against India.

Nine Pacts Signed in China and Chinese Marine Scientific Research

Nine MOU pacts were signed between Sri Lanka and China, and multiple bilateral cooperation agreements were reached. Out of the key cooperation areas were strategic infrastructure such as the energy sector, telecommunication, agriculture, trade, and Marine Scientific Research. Marine Scientific Research was an area that was of significant concern for India’s national security. The Sri Lankan government declared a moratorium on foreign research vessels at the beginning of the year. Restricting foreign ships from entering Sri Lankan waters for scientific research purposes, on the one hand, while agreeing with the Chinese to an official understanding of the development of marine scientific research, is a serious concern. Sri Lanka’s prime minister breached the Moratorium declared by its government to an extent by agreeing with the Chinese to cooperate on Marine Scientific Research during his visit, which is an indirect invitation to China to conduct research in its waters. The ambiguity created by the Sri Lankan regime has allowed the Chinese to articulate their position in whatever they prefer. A Chinese diplomat clearly stated to this author during his visit in February that “it was the Sri Lankan government who invited us,” claiming China had no interest in maritime research. This is a false narrative from China, which has a clear ambition to use nations such as Sri Lanka for their strategic advancement. Sri Lanka has often been the victim of this ‘strategic play.’ There is a clear danger in this strategic play by the Sri Lankan government, which will threaten India’s national security. 

China on debt restructuring

After years of silence, China did mention several times its support for Sri Lanka’s debt restructuring. During the Sri Lankan Prime Minister’s visit, Beijing also articulated another positive comment about the willingness to ‘play a positive role‘ in the debt restructuring ‘to assist Sri Lanka in financial relief.’ This Chinese position is still limited to rhetoric, and China has not spelled out the clear restructuring conditions it is willing to accept. China was reluctant to take a haircut on its loans, extend the tenure, or adjust interest rates, which Beijing spelled out. This position of China impacted and delayed the debt restructuring process in Sri Lanka for nearly two years. State Minister of Foreign Affairs Tharaka Balasooriya, speaking to this author in an interview in Colombo on Chinese loans, stated, “Chinese did not force us with the loans, we wanted the loans, the issue was we did not have proper long-term business models, it’s unfair to accuse China and say there is a debt trap.” The minister’s position on not having long-term business models is a factor proven and understood by most Sri Lankans since the public has not directly benefited from these large-scale projects. The government will defend China since they must work towards restructuring the loans. However, the concern of many Sri Lankans is the high-interest rates and conditions of these borrowings and high level corruption, which dragged the country into debt and bankruptcy. The corruption dynamics with the large-scale infrastructure projects were never investigated. Sri Lanka tends to choose a path, leaving aside its past dealings with Chinese projects without any diagnosis of these projects, such as a project corruption revealed by a former president during the inauguration of Lotus Tower, the tallest tower in South Asia. Leaving aside the past, the Sri Lankan government prefers to sign more projects with China, a considerable policy blunder from the government, which has not learnt a lesson from its past. China will use the ‘debt restructuring’ promises to expand its investment portfolio in Sri Lanka. Prime Minister’s visit, seen as a success by many in the country, requires a clear strategic rethinking, where there is a clear danger of paving the way for more Chinese expansion in Sri Lanka. Apart from China, domestic ultranationalism should also not be underestimated, as it has already targeted India with multiple security theories and a definite election strategy that will be used in the upcoming presidential elections.

Initially published by GSV in Washington, DC