India’s support can steer Lanka towards recovery

SRI Lanka’s rulers have historically relied on India for security and on China for economic assistance. Last year, the reverse happened, with China staying aloof during Sri Lanka’s economic crisis.

Last week, Sri Lankan President Ranil Wickremesinghe was on his first visit to New Delhi since assuming office last July after the then President Gotabaya Rajapaksa was ousted by a people’s uprising amidst an economic collapse that saw India emerging as the saviour. Wickremesinghe was here to thank India, his country’s too-close-for-comfort big neighbour. India came up with timely monetary assistance of $4 billion. When Colombo had sought military aid with its back to the wall in Jaffna in 2000 while battling the LTTE, India had provided it $500 million.

While a $3-billion International Monetary Fund (IMF) bailout will help Sri Lanka tide over its economic woes, it’s the political situation that has not really changed. Although the Rajapaksas — the victors in the war — have been hounded out, their party, the Sri Lanka Podujana Peramuna (SLPP), still calls the shots. Six-time Prime Minister Wickremesinghe, the lone nominated MP of the United National Party, was elected by the parliament as President with the support of SLPP MPs. There is a perception that the President and the government lack political legitimacy as geoeconomics has trumped geopolitics.

The provincial council and local government elections have not been held for more than four years as the government fears an electoral rout. While the President’s term ends in November 2024, the parliament’s tenure will expire in 2025. Though Article 21A has restored constitutional councils, the powers of the President (restored by Gotabaya) have not been curbed as promised. At the Human Rights Council’s March session in Geneva, Sri Lanka made renewed promises on addressing war crimes and human rights violations as a part of national reconciliation. Wickremesinghe had promised to resolve the Tamil National Question, first by February 4, 2023, and then by the year-end. His latest offer of implementing 13A (13th Amendment to the constitution) sans police powers was rejected by the Tamils.

Before the Wickremesinghe visit, Sri Lanka’s Ambassador in New Delhi Milinda Moragoda had admitted that its debt trap was of its own making and that India had helped in getting the IMF loan. On July 8, House Speaker Mahinda Yapa Abeywardena thanked India for saving Sri Lanka and preventing a bloodbath during its unprecedented economic crisis last year. In 2022, India extended a multi-pronged assistance of $4 billion to Sri Lanka through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy. Sri Lanka’s payback has been stingy, especially after its standoffish behaviour in cancelling the India-Sri Lanka-Japan joint venture in the East Container Terminal (ECT) at the Colombo Port, delaying the Trincomalee oil tank farm deal and the Sampur renewable energy project. It crossed a red line in awarding a contract to a Chinese firm to construct a hybrid solar and wind project off the coast of Jaffna; it later rescinded the decision and gave the project to India.

The West Container Terminal at the Colombo Port was later given to the Adani Group, which also won the controversial wind farm contract in Mannar that rocked the parliaments of both countries. Another ticklish issue was Wickremesinghe initially refusing but later permitting a Chinese surveillance ship, Yuan Wang 5, to dock in the veritably China-owned Hambantota Port. In 2013, a Chinese nuclear submarine (Colombo insists that it was a conventional submarine) berthing in he Colombo Port had caused a ruckus.

Sri Lanka’s economy has shrunk by 7 per cent and will contract by another 3 per cent this year. The IMF-imposed unpopular measures, such as cutting subsidies, increasing taxes and privatising state enterprises, have flattened the economy. Integrating the Sri Lankan economy with that of India can steer Colombo towards recovery.

At his briefing to the media on the outcome of President Wickremesinghe’s visit, Foreign Secretary Vinay Mohan Kwatra said the vision document for economic partnership highlighted multi-connectivity — land, air, maritime, energy, power, trade and financial transactions. Kwatra added that negotiations on the Economic and Technology Cooperation Agreement would resume so as to replace the existing trade deal. He refused to comment on the West Container Terminal given in lieu of the cancelled ECT, referring to the involvement of private players.

The new framework agreement on Trincomalee is based on the previous agreement of January 2022 for making it the regional energy hub. The joint development of 61 of the 99 oil tank farms by the Lanka Indian Oil Corporation and the Ceylon Petroleum Corporation is included in a 50-year development plan. Wickremesinghe has appointed former CDS Admiral Ravi Wijegunaratne as Managing Director, Ceylon Petroleum Corporation, and Chairman, Trincomalee Petroleum Terminal. The strategic Trincomalee harbour is highly valued by India and a long-term presence is vital to keep China at bay. Beijing’s interests in the region extend to the Indian Ocean and, hence, it has invested in projects in the Colombo Port and Colombo Port City and has a 99-year lease on the Hambantota Port.

At this month’s India CEO Forum, Wickremesinghe spoke about fostering long-term relations between the two countries and aligning Sri Lanka’s path with India as it had undergone an economic transformation and it was now ‘India time in the Indian Ocean Region’. Speaking to France24 this month, he said: “Lanka is neutral; there is no military agreement with China and we will not allow the use of our soil for any threat against India.” The Indian Ocean may not be ‘India’s Ocean’, but geography enables both India and Sri Lanka to play a vital role in its peace and stability.

Prime Minister Narendra Modi encapsulated the bilateral relations: “We believe the security interests and development of India and Sri Lanka are intertwined. And, therefore, it is essential that we work together keeping in mind each other’s safety and sensitivities.” He also emphasised on what has become standard practice during India-Sri Lanka talks — the Tamil aspirations, meaningful devolution of power and full implementation of 13A. This has become India’s bottom line.