It has been over 100 days since protests began in Sri Lanka. No significant solutions or answers are in sight. Gotabaya Rajapaksa initially fled to Maldives and then moved to Singapore. His next destination is unknown and uncertain. All said and done, Sri Lanka is a complicated minefield with no easy answers. Its strategic location in the IOR brings geopolitical issues to the table. The outcomes in the Island nation are important not only for Sri Lanka but also for China and India. If Hambantota is the oft quoted model of debt trap diplomacy, where and how Sri Lanka goes from here will be a ‘model’ in containing Chinese influence. It will be consequential from many points of view.
Sri Lanka is under emergency. Its politics are boiling and its economy is frozen. People are out on the streets with no effective government in place. The country is likely to face a humanitarian crisis with severe shortages of food, medicine and fuel. For an economic thaw , the political potboiler must cool down. A functional and acceptable government must infuse confidence in people to get off the streets and return home. A political process to this end has apparently commenced. The military is supporting the political process without interference. To think that normalcy will eventually return since the Rajapaksas’ have been virtually de-throned is too simplistic. The road ahead is complicated, long and rocky. Let us examine each bend in this rocky road.
Mr Ranil Wickremesinghe is the acting President. Soon a President is expected to be elected democratically. The Sri Lanka Podujana Perumana (SLPP), dominated by the Rajapaksa Clan still has a 2/3rd majority in the parliament. If Mr Ranil Wickremesinghe is elected there will be a problem. He is seen to be close to the Rajapaksas’. He is not acceptable to the people. That is why they torched his house. There are ongoing demonstrations against him. Anyone else elected as President will be under the SLPP pressure. After all it has 2/3rdmajority in the Parliament and is essentially the party of the Rajapaksa Clan. Resultantly, any other President even with an ‘All Party Unity’ stamp might not have political elbow space. Political stability could still be evasive. Counting the Rajapaksa influence out might be premature. The legitimacy of the Parliament itself is under question. Can a Parliament with a deposed leader’s political Party (SLPP) in majority, be representative of the will of the people in the current conditions? If not, fresh elections are on the cards. In that case political chaos is likely to prolong . There are no easy fixes.
The political choices made by Sri Lanka might cater for the immediate crisis situation. However the success of that choice will depend to a large extent upon Sri Lanka’s underlying political landscape. The current protests are effective and, seem to be well controlled and organised. Such organisation cannot be spontaneous. Varied interests seem to at play. These can derail the political process anytime. Next, Sri Lanka is a society dominated by a Sinhala majority which has become increasingly ideological and militant in outlook. Sinhalese majoritarianism underpinned by the strongman approach and Buddhist monks, have contributed immensely to this political chaos. Can the new dispensation overcome this factor? The aspirations of the Tamils and other minorities remain contentious political issues. This includes the long delayed devolution of powers to Tamils. The majority Sinhala community and the minority Tamil and other ethnic groups remain suspicious of each other. The approach of the new leader should facilitate bridging political divides but also runs the danger of widening cracks.
Additionally, rumblings have commenced to bring the Rajapaksa clan to face justice. If that is done, the old wounds of ethnic conflict – civilians deaths, abducting journalists, summary executions, rape, blocking food and medicine from reaching affected communities, human rights violations and investigation into alleged war crimes will surface. There will be pressures and consequences if this line is pursued. The newly elected leader needs to have the commitment and integrity to rebuild public trust across all communities and people and take everyone along. Unless this is done, chaos and economic instability will prevail. There is also the issue of the excessive power wielded by an ‘Executive Presidency’. Currently, the public view is to amend the constitution to tone down his authority. Sri Lanka does not want the repeat of the Rajapaksa experience. That is a long process with its twists and turns. However the new incumbent might not like to give up the powers vested in him/her by the constitution.
The prolonged financial crisis has led to hyperinflation, extended power cuts, non-availability of essentials like gas and fuel as also severe shortages of basics like food and medicines. Negotiations with IMF for a bailout will take time. In the meanwhile, Sri Lanka is on the verge of a humanitarian crisis. That needs to be attended to immediately through International and other aid agencies. The next step which faces the new dispensation is that is the revival of the broken-down mainstays of Sri Lankan economy – agriculture and tourism. While tourism is over the horizon at present, revival of agriculture is a prime task to reduce the nation’s food security risks. Also, Sri Lanka might have to tap the goodwill of its overseas population for inward remittances. After all the Sri Lankan Tamils had the potential to sustain LTTE at one point of time. If the political process is pragmatic and wise, this option might work.
Sri Lanka’s economic downfall is largely attributable to huge tax cuts to the wealthy elite as well as corporations for political gain. Further, Sri Lanka has a military expenditure which is out of proportion with its genuine security requirements. Reversing these trendlines will boost chances of recovery. However reversal entails political risks since these entities also represent the elite power structure, without whose backing, any new dispensation might not survive. A fine balance has to be maintained while curtailing the entitlements of this privileged class.
Sri Lanka has declared bankruptcy. It has defaulted on servicing/repayment of all its loans and payment on redemption of its bonds. Sri Lanka’s sovereign debt is held by many countries. Notable amongst them are China, India and Japan. Overall the percentage of Chinese-held debt is the maximum. It is closer to 26%. This includes sovereign debt to China and commercial loans from Chinese banks, such as EXIM Bank of China and the China Development Bank. Hence the international angles and interests need understanding.
China has been Sri Lanka’s greatest benefactor in the recent decades. Chinese interests have been to extend its influence in the IOR, to build the ‘string of pearls’ around India and further its Belt and Road Initiative. China captured influence in Sri Lanka through the Rajapaksa Clan. Its debt trap diplomacy led to Sri Lanka having a port without shipping traffic, an international airport without flights and one of the tallest unoccupied buildings. These empty symbols are representative of China in Sri Lanka. In the current crisis, China has kept Sri Lanka at arm’s length and been largely uninvolved. It had promised aid but nothing has come forth. Sr Lankans have identified China with Rajapaksas’. People have seen them to be unhelpful. The public mood against China is palpable. However China cannot be counted out. It is biding for time. With the huge debt burden, no Sri Lankan government can alienate China. Also, China remains a major hedge against India. Chinese influence cannot be wished away but marginalised.
The international community is presently preoccupied with the Russia – Ukraine war and is not focussed on Sri Lanka. The IMF holds the key to financial stability but will not grant support without political stability. Further, IMF will insist on Sri Lanka to implement a debt restructuring plan. China has rejected any restructuring of debt. Hence there are complications. The UN will be important in case of any international humanitarian effort. However, presently it is not taking any significant step. It has only urged all stakeholders in Sri Lanka to ensure a peaceful transition of power within the Constitution, accompanied by broad and inclusive consultation within and outside Parliament. It also appears that the International community has left it for India to be its pointsman in Sri Lanka.
India’s twin interest in Sri Lanka is to ensure stability in its civilisational neighbour and to marginalise Chinese influence in the region. Despite the Rajapaksas’ close relations with China, it was ultimately India which has been most helpful in the crisis. India has sent over $3.8 billion to Sri Lanka, in the form of currency swaps, loans, food and fuel aid without demur. India has formulated a comprehensive plan to increase economic and infrastructure ties with Sri Lanka. India has stood alongside Sri Lanka to secure the IMF bailout package. India has been a ‘friend in need’ to the people of Sri Lanka so far. No other country has come forward for any kind of help. This is widely acknowledged.
However, India operates under the shadow of the events during the IPKF and LTTE period. India went in as a friend and exited as an outsider to both Tamils and Sinhalese. This led to its marginalisation. It also made space for China’s entry into the area. India has to be careful not to cross the line beyond which it will be seen as interfering directly in the internal affairs of Sri Lanka. India is conscious of this and has tempered its initiative so far.
India also has the opportunity of marginalising Chinese influence to manageable proportions if it plays its cards well. Additionally, Chinese preoccupation with Xi Jinping’s re-election, a slowing economy, tensions in the Pacific, lack of Sri Lankan peoples support and a general waning of Chinese international influence makes it risk averse to take any initiative in the current scenario. India should seize this geostrategic opening with both hands. Sri Lanka should be the first ‘Pearl’ to fall off the ‘String’. If that happens, there will be reverberations in the rest of Asia.
India’s friend in need’ to the people of Sri Lanka image needs constant reinforcement. It must allow the situation to evolve and assist Sri Lankans to their destiny through democratic means. So far that has been the case. India also needs to handle the Tamil issue with sensitivity since there is a domestic angle to it. Tamil Nādu must be on board with all Central initiatives. One cannot go back to the days when the state and centre were working at cross purposes with each other. India must not miss this opportunity to regain lost ground.
Sri Lanka is a critical component of the Indo Pacific construct. QUAD assumes greater relevance geo-strategically and geo-economically. It is also felt that as things evolve, Sri Lanka will be a watershed case in fending off the Chinese bid to enforce their view of the world order and their rules based system. The QUAD has an opportunity to restrict Chinese expansionism in the Indian Ocean and thereby contain it. It will also be a big ‘showcase’ blow to the BRI model. So far there is no visible effort of QUAD to respond to the situation. India must leverage the QUAD platform. USA, Japan and India in tandem can do much for Sri Lanka including handling issues with the IMF. India as the pointsman of an international approach will also be more acceptable to Sri Lankan people. The challenge is to squarely face the situation and deliver.
There is no doubt that the Sri Lanka is on a knife edge politically and economically. The road ahead is a minefield with no easy fixes. The global fallout of the Ukraine war will compound issues regarding energy and food security. It is going to be a time consuming process. However the silver lining is that the Sri Lankans have stuck to a democratic process. Violence has been minimal. They have borne hardship stoically. Across communities they seem to recognise that while they have been taken for a ride by the Rajpaksa strongmen, they need to move on, leave their differences behind and look up to a better tomorrow. We wish them all the best.
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