The people of Sri Lanka are now facing multiple challenges to their lives, welfare and well-being. Crowds of thousands, across the country, are participating in unprecedented demonstrations against the ruling Rajapaksa regime, which was re-elected to power in Sri Lanka’s last Parliamentary elections were held in August 5, 2020.
The incumbent People’s Freedom Alliance led by Mahinda Rajapaksa secured a decisive majority of 145 seats in these elections,, while the mainstream opposition won 54 seats and the Tamil National Alliance secured 16 seats. Unfortunately for Sri Lanka, the Covid-19 Pandemic caused havoc in the country, which depended heavily on earnings from tourism. What followed was a virtual halt to international tourism.
Agricultural production had also fallen in Sri Lanka, thanks to some some ill-advised agricultural policy decisions taken by the Rajapaksa government.
With agricultural production declining and tourism earnings virtually ending, Sri Lanka’s economy went into a virtual nose-dive. Moreover, with prices of essential commodities surging, public anger against the Rajapaksa government hit the roof.
Demonstrations across the country, and particularly at the Capital Colombo, became increasingly uncontrollable. Interestingly, China, which has for long been regarded as a “Good Samaritan” in Sri Lanka, offered precious little to help out.
It was External Affairs Minister S Jaishankar and Finance Minister Nirmala Sitharaman who stepped in to lend a helping hand. The Finance Minister strongly urged International Financial Institutions in Washington to act expeditiously in providing funds to Sri Lanka.
The opposition has, in the meanwhile, joined hands, with opposition parties, duly backed by Tamil Legislators, confront the government, with countrywide demonstrations. Divisions have since arisen in the ruling establishment, with increasing displeasure about the role of the Rajapaksa family in the country.
Astonishingly, nine members of the Rajapaksa family were appointed to occupy Ministerial berths, after the last elections. The family members administered an estimated 75 per cent of the national budget. Crowds of thousands, across the country are, however, now participating in unprecedented demonstrations against the ruling Rajapaksa government, which they re-elected to power recently.
The Sinhala opposition has, in the meantime joined hands with Tamil Legislators, to confront the government. Divisions have also arisen in the ruling establishment. More importantly, nine Members of the Rajapaksa family were appointed to hold Ministerial berths.
The family members administered an estimated 75 per cent of the national budget. To add fuel to the fire yet another Rajapaksa brother Gotabaya Rajapaksa became the President of Sri Lanka. Gotabaya was the country’s Defence Minister who supervised the military campaign to crush the LTTE in 2009.
India has skilfully moved together with Japan, to ensure that China does not have exclusive, or dominant control, of the Colombo Port, through which significant amounts of India‘s trade is moved.
In a 35-year agreement, signed recently, India’s Adani Group will have a 51 per cent stake in the expansion of the Colombo Port, together with the Sri Lanka Port Authority. The port project will be backed by Japanese funding. The project is located virtually next to the China-backed, Colombo International Container Terminal.
An estimated 75 per cent of the of the traffic in the Colombo Port is made up of goods to or from India. What is equally important, is that even as the Sri Lanka government was commencing negotiations with the IMF, for a long-term arrangement to meet its financial challenges, India urged the IMF to expedite action on assistance for Sri Lanka. Finance Minister Nirmala Sitharaman made an impassioned call in Washington DC, for expeditious provision of funds for Sri Lanka. The IMF has since announced that it has held “fruitful technical discussions” with Sri Lanka.
It is now acknowledged that these activities have been facilitated by the manner in which India has joined the Sri Lanka government, by participating in and financing, the herculean relief effort required in Sri Lanka.
The Export Import Bank of India and the Government of Sri Lanka signed a $500-million Line of Credit Agreement, for purchase of petroleum products on February 2, 2022. Under this agreement, 10 consignments of fuel totalling 4 lakh tonnes have been supplied so far.
In response to a separate and urgent request from the Sri Lankan government, extension of credit facilities for $1 billion, for supply of essential items including food and medicine, has been finalised. The first shipment of rice under this facility has reached Sri Lanka.
Moreover, earlier in January this year, India provided financial assistance to Sri Lanka, which included a currency swap of $400 million, deferment of Asian Clearing Union payments of $515 million, and again of $498.9 million. In cumulative terms, Indian support to the people of Sri Lanka in the first quarter of 2022, has been in the range of $3 billion. Sadly, however, the people of Sri Lanka are continuing to go through very difficult times.
India looks at Sri Lanka not merely as an immediate neighbour, but as partner for stability and cooperation across the Indian Ocean region. While Chinese efforts to be the sole partner of Sri Lanka in the Colombo Port have been balanced, the ownership of the Hambantota Port, which is also the constituency of the Rajapaksa family, remains a source of concern.
Unable to repay Chinese loans for the construction of the port, Sri Lanka has virtually handed it over to China. Colombo is, however, hopefully better aware now, of India’s concerns about the Chinese presence in Hambantota.
The writer is former Indian High Commissioner to Pakistan