Monday, 2 October, 2023

Sri Lankan leader seeks to disarm India's China fears

Sri Lanka's president arrives in India on Thursday for his first visit to the regional powerhouse, with concerns mounting in New Delhi over China's increasing influence in the strategically placed but financially bankrupt island.

New Sri Lankan leaders usually travel to India within a few weeks of taking office, but Ranil Wickremesinghe's trip comes exactly a year after he became president following the toppling of his predecessor at the height of an unprecedented economic crisis.

As Sri Lanka drifted towards chaos with daily street protests over shortages of food, fuel and medicines, India poured nearly $4 billion in aid to restore supplies and stabilise the island.

The loans and credit lines were granted despite Sri Lanka defaulting on its $46 billion foreign debt and losing access to international financial markets.

"Without India's help Sri Lanka could have degenerated into anarchy," said political commentator Victor Ivan.

"The president will not only have to show gratitude, but reassure that we will not do anything to hurt them," he added.

"At the same time, Sri Lanka can't drop China because they are also a very important economic partner."

China is Sri Lanka's biggest bilateral creditor and a Chinese firm acquired a 99-year lease on the southern port of Hambantota after Colombo was unable to repay a huge loan from Beijing to build it.

A $1.4 billion land reclamation project next to Colombo port -- the biggest-ever foreign investment in Sri Lanka -- has raised Indian fears that Beijing could use it as a listening post. Initially some of it was to have been Chinese sovereign territory.

Sri Lanka lies halfway along the main international shipping route between Europe and East Asia, with Colombo and Hambantota the only deep sea ports between Dubai and Singapore.

New Delhi sees the region as its backyard, and officials have been alarmed by Beijing's activities.

As part of its Belt and Road Initiative, China has also struck other infrastructure deals with countries around the Indian Ocean, including the Maldives, Bangladesh and Djibouti, where it has a military base.

- Spy ship -

New Delhi raised concerns when a Chinese research vessel, Yuan Wang 5, sought permission to dock at Hambantota in August.

The port call by what India describes as a spy ship went ahead. Sri Lanka responded by asking China not to carry out any "scientific research" while in Sri Lankan waters.

In an apparent move to reassure New Delhi, Colombo announced Tuesday a new "standard operating procedure" for future port calls by foreign research vessels and military craft, without disclosing details.

Wickremesinghe sought to address India's fears about Beijing's intentions during a visit to France last month, dismissing speculation about Chinese military bases in Sri Lanka.

"No, we have no military agreements with China," he told the France24 TV network. "There won't be any military agreements. I don't think China enters into one.

"We are a neutral country, but we also emphasise on the fact that we cannot allow Sri Lanka to be used as a base for any threats against India," he added.

Colombo said Wickremesinghe will begin his two-day visit Thursday and hold talks with Prime Minister Narendra Modi -- the fourth Sri Lankan president to do so -- and Indian President Droupadi Murmu.

"Debt restructuring will be on the agenda along with connectivity," said a senior diplomatic source, adding New Delhi would be keen to speed up infrastructure projects hit by bureaucratic delays.

Wickremesinghe was elected by parliament to serve the remaining two-and-a-half years in the term of Gotabaya Rajapaksa, who stepped down following protests over mismanagement of the economy.

But the Indian establishment has often viewed the six-time prime minister's pro-Western United National Party with suspicion.

- Debt deals -

Sri Lanka requires agreement from all its creditors, including India and China, on debt restructuring to continue with the IMF programme spread over 48 months.

Colombo has proposed haircuts of up to 30 percent and a repayment freeze extending to nine years.

Wickremesinghe said last month that he was "very confident" China would be on board and Colombo would be able to unlock the remainder of the IMF bailout.

In October, he is due to travel to China for the first time as president.