Sri Lanka is on its knees. The country has defaulted on its foreign loan repayments, and almost run out of every essential commodity — food, medicines, and fuel. Its children intermittently attend school while their families struggle to survive the day. Even the country’s agriculture is impaired by an ill-thought move to ban the use of chemical fertilisers in 2021.

In scenes reminiscent of the People’s Revolution of 1986 in the Philippines and the 2011 Egyptian Revolution, mass protests by Sri Lankans have forced their Prime Minister, Mahinda Rajapaksa, to resign from office; his brother, President Gotabaya Rajapaksa has promised to do so later this month. Both have disappeared from view. Even the whereabouts of the country’s present Prime Minister, Ranil Wickremesinghe, are a closely guarded secret.

The Rajapaksas are rightly blamed for their astonishing display of nepotism. Their corrupt ways and extravagant borrowings for vanity projects, especially from China, include a massive airport, a huge cricket stadium and a deep-water port in Hambantota. The last is now leased to a Chinese company, angering the Sri Lankans no end while raising security concerns in India.

Bad luck

Some of Sri Lanka’s difficulties can be attributed to plain bad luck. Its thriving tourism industry, which generates one-tenth of the country’s economic output and provides a major source of foreign currency, tanked due to Covid. Workers’ remittances, a major source of foreign exchange for Sri Lanka, dropped to a 10-year low of less than $6 billion in 2021. While a full analysis of the economic disaster that has overtaken Sri Lanka can wait, the suffering of the people needs to be quickly brought to an end. In this regard India has so far moved with uncharacteristic speed by providing immediate succour to Sri Lankans.

It has given over $3 billion in aid — more than any other country. Even Tamil Nadu, which has an emotional connect with Sri Lanka, is reported to have gifted food and medicines worth over $5 million. The Chinese, who were close to the Rajapaksas, by contrast have done little. As Maria Siow, writing in the Hong Kong-based South China Morning Post of June 24, observed, “China’s response to Sri Lanka’s economic meltdown has been low-key, to say the least.”

Meanwhile, Sri Lanka’s central bank alluded to a requirement of $500 million in foreign exchange every month to cover its basic imports.

Unprecedented opportunity

The crisis in Sri Lanka presents India with an unprecedented opportunity to put behind a long record of not treating its smaller neighbours fairly. It has interfered in Nepal’s internal affairs in the past and reneged on a promise to share the waters of the Teesta river with Bangladesh in 2011 since Mamata Banerjee, then and present Chief Minister of West Bengal, was against doing so.

Both the Tamil and Sinhala communities in Sri Lanka have bad memories of India’s military intervention in Sri Lanka through the deployment of the Indian Peace Keeping Force between 1987 and 1990.

Other smaller countries in South Asia would, therefore, be watching the manner in which India helps Sri Lanka stabilise, just as they must have taken note of China’s fair-weather friendship now on display in Sri Lanka.

For all the difficulties Sri Lanka is in now, it must be remembered that it has got a lot of developmental issues right in the past.. The country has the best social indicators in South Asia. Its HDI (75th in global rankings) is higher than that of any other in the region including India. Its population is fully literate and hard-working.

Like India, but unlike any other country in South Asia, Sri Lanka has a long multi-ethnic and multi-linguistic democratic tradition that’s stood the test of a long and brutal civil war. Despite the mess it finds itself in, Sri Lanka is no Venezuela and still less an Egypt.

Its tourism industry now in deep dive can quickly recover, for such are the attractions of Sri Lanka, a country rich in places to savour and with the infrastructure to do so. With timely and sensible support Sri Lanka can be on its feet much quicker than many expect it to.

By the time that Greece, with less than half of Sri Lanka’s population, emerged from an economic mess largely of its own creation. It was, according to an August 8, 2018 BBC report, “the recipient of the biggest bailout in global financial history, totalling some €289 billion.” Sri Lanka will need much less than that and far less time to come out of its present crisis.

Regional effort

While India is no EU, it still is the largest economy by far in South Asia, possessing the means to help and should remain the biggest though not the sole contributor investing in Sri Lanka’s recovery.

Rather, it should bring together other countries in the region as partners in the effort. However modest their contributions, such an approach will make India’s initiatives to help Sri Lanka much more of a regional effort, which Sri Lanka will find more acceptable.

It can be a model of its kind. It will also save India from being perceived as a bully in its backyard as is the case with other large countries like the US, Russia or China.

It can potentially lay the foundation for an economically integrated and prospering South Asia, making far better use of its demographic dividend, the largest in the world today, while it still lasts.

India should view helping Sri Lanka recover as an economic and strategic investment rather than a cost and should go about the task with sensitivity and grace. It should not succumb to the temptation of being more transactional than generous.

The writer teaches public policy and contemporary history at IISc Bengaluru. The views are personal