China’s Transcontinental Pathways … and Indian Ocean Issues for Lanka

Philips and Kurukulasuriya … and other items

I > Rajan Philips: “One Belt-One Road from China, but no Bridge to India: Lanka’s Development Dilemmas,” Island, 20 May 2017

Even as he bade farewell to Indian Prime Minister Narendra Modi at the end of his Vesak visit, Prime Minister Wickremesinghe was all but ready to take flight to China to attend the economic summit of the 21st Century. This was Beijing’s big splash on the world economic map, and one that India chose not to officially attend. Japan was another boycotter. A number of Indian business and think-tank figures went to Beijing as ‘unofficial delegates’, and they were critical of their government’s decision not to send at least an official delegation. 130 countries marked their presence at the two-day (May 14-15) event in Beijing, including 29 state and government leaders. Even the Trump Administration, despite its spiralling turmoil in Washington, was represented in Beijing.

There was no question of Sri Lanka not attending. Sri Lanka is already both a beneficiary of China’s global infrastructure thrust, as well as a victim of its “debt-trap diplomacy” and debt-equity swap agreements. In world development circles Sri Lanka is known for two leading examples of easy infrastructure money and heavy debt burden: the Mattala Rajapaksa International Airport (sometimes dubbed as the “world’s emptiest airport”) and the Magampura Mahinda Rajapaksa (sea) Port. Sri Lanka’s small experience is now writ large in a powerful critique of China’s ambitious intentions by Pakistani journalist and scholar, Khurram Husain.
But many are willing to take the risk, including the government of Pakistan and its Prime Minister Nawaz Sharif, seeing potentially more opportunities than problems in China’s One Belt-One Road (OBOR) initiative. It seems almost a global hope that the massive Chinese munificence can be collectively managed to produce more benefits and fewer harms. However, small countries will have a hard time extracting benefits while avoiding the debt trap from the OBOR initiative.

Sri Lanka’s dilemmas

Sri Lanka’s dilemmas are compounded by the government’s dilemmas. The present government has managed to annoy everyone and satisfy no one in its handling of the debt-laden Chinese projects that it inherited from the Rajapaksa (mal)-administration. The government’s flip-flop on the Colombo Port City and its secretive handling of the new Hambantota Port agreement has generated greater protests than the Rajapaksas ever faced. That there is freedom to protest now unlike earlier is not a wholly satisfactory explanation. The bigger reason is that the government has no coherent development plan based on country resources and requirements that are hardly uniform despite the small geography and top-heavy administration. In fact, there is little difference between what the Rajapaksa government did by way of development and what the present government is trying to do. Except, the debt chickens hatched by the Rajapaksas are coming home now. And, a restive population that sat on its hands under the Rajapaksas is now up in arms in protest on every street in Colombo.

The other, and more complicating, difference is dealing with India. And the government has done nothing to mitigate that challenge internally, but everything to aggravate it. Externally, on the other hand, the government appears to be balancing well between Delhi and Beijing, which is a prudent approach than the native-cunning approach of the Rajapaksas to play one against the other. The Chinese media favourably reported the meeting between Prime Minister Wickremesinghe and his Chinese counterpart, Premier Li Keqiang.

Equally, the Indian press had positive things to say about Sri Lanka’s understanding of India’s absence in Beijing, based on Minister Sarath Amanugama’s observation that India could not simply accept China identifying a potential China-Pakistan Economic Corridor (CPEC), one of the six overland corridors envisaged by the OBOR initiative, cutting through Kashmir without consulting India. The Sri Lankan government must ask Delhi to similarly understand concerns in Sri Lanka about the unilateral declarations by Indian Ministers about building a new (Pampan) bridge connecting Sri Lanka and South India.

Silk Road and Spice Route

The economic justification of infrastructure development is, in theory, based on demand and timing (not too soon and not too late). But neither criterion is usually satisfied for political reasons and the availability of resources. A new and important consideration is the impact on the environment, natural as well as social. The bridge connection between India and Sri Lanka is hardly an economic need now to justify the environmental impacts it will create. And from an opportunity cost standpoint, Sri Lanka has other more pressing needs to address than to build a new bridge that no one is missing. The same argument applies to the spate of highway building started by the Rajapaksas and pressed on by the present government while neglecting the upgrading of the already existing network of roads and rails which are in a parlous state of disrepair.

While Sri Lanka cannot afford to miss any positive opportunity arising from the growing economies of China and India, it must have its own plan to assess which opportunity is appropriate and where it will fit in the country’s broadly national and specifically local need gaps. China’s OBOR initiative is totally unique and no other country has circumstances that come anywhere close. On the other hand, Modi’s “Make in India” manufacturing thrust is closer to what Sri Lanka may aspire to but on vastly different scales.

China’s impetus is primarily driven by its infrastructure overcapacity and the need to find places to deploy its huge savings and construction resources. The fact that the OBOR initiative is mostly government driven but under market conditions is what creates legitimate fears of imbalances and unequal results. Sri Lanka has experienced this in a relatively small, but nationally significant ways. Khurram Husein’s critique, I referred to earlier, exposes with documented evidence similar prospects for Pakistan but on a much a larger scale. Small countries need smart governments to choose beneficial initiatives while avoiding harmful ones.

In the case of Sri Lanka, a sense of history is also helpful. The Chinese government and western commentators have been linking the new OBOR initiative to the ancient ‘Silk Road’ that was the trade route for silk and horses between China, the rest of Asia and Europe. Not much to the liking of the Chinese, commentators also recall the Chinese imperial tradition of collecting tributes from smaller powers. There is also a school of historians who view that the importance of the ancient Silk Road is being exaggerated, and that the old spice routes linking South Asia, especially the South India-Sri Lanka (SISL) region, and the Roman Empire was far more consequential for ancient trade. Ancient or modern, Sri Lanka and South India cannot sail out of their geographical proximity.

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II > Lasanda Kurukulasuriya: “Modi’s visit, China’s Silk Road Navigating cross currents,” Daily Mirror, 19 May 2017 http://www.dailymirror.lk/article/Modi-s-visit-China-s-Silk-Road-Navigating-cross-currents-129174.html

Prime Minister Ranil Wickremesinghe left Colombo to attend China’s One Belt One Road Forum in Beijing within hours of Indian Prime Minister Narendra Modi’s departure from Sri Lanka after his participation as chief guest in the International Vesak Day celebrations on 11th -12th May.
China’s OBOR project is seen as its most ambitious foreign policy initiative, linking Asia, Africa and Europe with massive infrastructure investments on the part of China. Sri Lanka was one of the earliest to pledge support for the OBOR also known as the Silk Road. Significantly India boycotted  the Beijing Forum because of what India’s Finance Minister Arun Jaitley referred to as ‘sovereignty issues.’ Indian disapproval relates to the fact that part of the project runs through territory in Pakistan-administered Kashmir, which New Delhi says is its own.   Prime Minister Wickremesinghe however has made positive remarks about the Beijing forum at its conclusion, describing it as ‘historical,’ because for the first time, he said, there has been a trade and cooperation plan for Eurasia.
A number of developments point to cross-currents that Sri Lanka will have to navigate in participating in the ambitious project, while maintaining a balanced foreign policy and good relations with the two Asian giants India and China. Special Projects Minister Sarath Amunugama has already sailed into uncharted waters with his remarks to PTI in Beijing. Eyebrows would surely have been raised in Pakistan, a friend of Sri Lanka, when he said that the issue over Kashmir “is going through the heart of Indian interests.” Amunugama confirmed reports that Sri Lanka turned down a recent Chinese request to dock a submarine adding that “Sri Lanka is taking assistance from the Indian Navy to maintain maritime security including tracking submarines.” In the same breath he asserted that “We are equidistant from everyone.”
A previous submarine docking in Colombo in 2014 so angered India that it is believed that India had a hand in the regime change of January 2015. China has consistently maintained that the submarine visits relate to anti-piracy operations in the Gulf of Aden.
Amunugama’s remarks come against a backdrop where the government is trying to iron out issues relating to Chinese investments. The Port City project, though it has now got the go-ahead, was earlier suspended by the Sirisena Wickremesinghe government owing to Indian pressure. The Hambantota Port and industrial zone are yet to be finalized amid local apprehensions.
Where the proposed Indian projects are concerned, fears were revived following a MoU signed during Wickremesinghe’s recent visit to New Delhi, that listed a plethora of envisaged projects with Indian collaboration that included the strategic Trincomalee port and environs. Owing to local concerns the Indian prime minister’s travel had to be preceded by categorical announcements on both sides that there would be ‘no signing of agreements.’ In Delhi, responding to a question on Trincomalee port ahead of the trip, an Indian official told reporters “it’s a little premature at this stage to be talking about it.”   The Indian media has no illusions as to the geopolitics underlying Modi’s visit. “Now it appears New Delhi has decided to use religion as the language, perhaps more saleable in Sri Lanka, through which India will pitch the security co-operation that it wants with its closest Indian Ocean neighbor” said a commentary in the Indian Express.

While Prime Minister Modi in his keynote speech inaugurating a Buddhist conference in Colombo mainly dwelt on the two countries’ ‘shared Buddhist heritage,’ he also remarked that “… the economic and social well being of the people of Sri Lanka is linked with that of 1.25 billion Indians. Because, whether it is on land or in the waters of the Indian Ocean, the security of our societies is indivisible.” A projection of Indian soft power may be read into these words.
For Sri Lanka the question is, must these development partnerships with China and India necessarily be seen as prejudicial to each other, or can the island state find ways to benefit from the ‘multiple suitors’ it attracts on account of its strategic location, while protecting its own
national interest?
“As India’s neighbour and the country with which we have had the longest historical, religious and cultural links we need to be sensitive to India’s concerns, especially security concerns,” says Dr Palitha Kohona, former Secretary to the Ministry of External Affairs and Sri Lanka’s former ambassador to the UN in New York. But this does not mean we have to be obsequious, he says, nor does India expect us to.

“As an independent country we must chart our own destiny. No country, however well meaning will safeguard our future and that includes India”

“We maintained a proactive balance between India and China over the years. Sri Lanka benefitted immensely from this approach. Instead of sycophantishly being over loyal to India or anyone else, we can be ourselves while being sensitive to India’s security concerns” he told the Daily Mirror. “The secret is to keep India informed, be independent and not offend other friends gratuitously.”

 Asanga Abeyagoonasekera, Director General of the Institute of National Security Studies Sri Lanka (INSSSL) is of the view that Sri Lanka “does not need to reposition [itself] as a hub of the Indian Ocean, as it has already been that since ancient times.”     “The Indian Ocean does not belong to India and a Chinese submarine visiting Sri Lanka should be seen as a positive gesture by Indians, primarily because India has a close and deep relationship with Sri Lanka” he says. “Second, because the submarine, was not even nuclear powered was just making a port call. Third because India, being the island’s closest neighbour, is building a massive arsenal of 170 warships, five submarines and one nuclear submarine with Sri Lanka not having raised any question regarding this. Fourth, Sri Lanka always keeps India’s security concern in mind and Sri Lankan leaders do not make knee- jerk reactions because of the carefully calibrated policy by our leaders.”

He goes on to say “Sri Lanka should also build its capacity to counter any future destabilization activities by regional and extra regional powers which would affect the economic development of the nation. It is in Sri Lanka’s national interest to defend its territory and its surroundings. Therefore, if Sri Lanka wishes to build a submarine fleet in the future, for defensive purposes, this act should not be viewed as a threat by surrounding nations.”

Pointing out that China has helped Sri Lanka financially and to develop its infrastructure, Abeyagoonasekera says Sri Lanka should assist China fully with the OBOR project which “will benefit our people and our economy immensely.”    In this he concurs with Kohona who also drew attention to the “immense economic opportunities” the OBOR offers. “As an independent country we must chart our own destiny. No country, however well meaning will safeguard our future and that includes India” Kohona said. “We must not play our hand so as to miss out on this opportunity. We must decide what is in our best interest and hope that as a mature neighbour India will understand our needs. We can and must manage this relationship with our interests uppermost. After all Prime Minister Modi has repeatedly emphasised the commonalities between India and China and invited Chinese businesses to invest in India. China is India’s biggest trading partner.”

“A number of developments point to cross-currents that Sri Lanka will have to navigate in participating in the ambitious project, while maintaining a balanced foreign policy and good relations with the two Asian giants India and China”

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III> Shirajiv Sirimanne: “China’s One Belt initiative to increase tourist arrivals to the region,” Daily News, 23 May 2017,

Chinese arrivals will be Sri Lanka’s strongest inbound market over taking India in the future, said Chairman, Pacific Asia Travel Association (PATA) Andrew Jones. Speaking at the PATA conference, Jetwing Blue Hotel in Negombo, last week he said that overall Sri Lanka arrivals too would increase by 10.4 percent annually up to 2021. He said that one of the biggest problems facing the industry in the future would be to find young tourism professionals.

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“The Asia Pacific Region too would attract higher number of arrivals for the 2017-2021 periods and the region would pass the 3.7 million arrival mark by 2021,” said Secretary-General of the World Tourism Organization (UNWTO) Taleb Rifai. “We expect 5 billion people to travel out by 2030,” The Secretary-General envisaged.

He said that the proposed One Belt initiative mooted by China would also help to increased tourist arrivals in the region. Rifai said however that attracting 4.5 million tourist arrivals by 2020 by Sri Lanka Tourism may be a tall order.

The Secretary-General said that today’s world was changing to digital technology and destination marketing tools should be focused in that direction. “Today you don’t need huge budgets for marketing. What you need today is innovative marketing tools powered by technology,” he added.

Minister of Tourism and Christian Religious Affairs Minister John Amaratunga said that tourism was the quickest sector to recover after ending the war and today it’s the third highest foreign exchange earner of Sri Lanka.

 

 

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