Sri Lanka’s “Balancing” Foreign Policy

As China’s power in the Indian Ocean Region grows in preponderance, Indian anxieties have concomitantly intensified. Faced with finite choices as an island in the Indian Ocean, it is intrinsically in Sri Lanka’s interest to balance both powers.

Historically speaking, Beijing and New Delhi each had its own geographic orientation: the former toward East Asia and the latter toward South Asia. This has led to the belief that China concedes South Asia and the Indian Ocean Region as India’s sphere of influence. But is this the case today? In his opening remarks in the 2017 Bandaranaike Center for International Studies Seminar on Contemporary China Dr. Su Ge, the President of the China Institute of International Studies termed Sri Lanka and China as being “neighbors”. Indeed, Sri Lanka was said to occupy an important position in China’s “neighborhood diplomacy” although the island is located some 3,900 km away from mainland China.

The former presidential term of Rajapakse serves as a clear specimen of a Pro-Chinese foreign policy. President Xi visited the island during his tenure and Chinese investment dotted the island’s coastline. Kahandawaarachchi notes that from 2005 to 2014 China spent US$870.4 billion in worldwide investments and contracts, out of which US$8.9 billion was invested in Sri Lanka. The Norochcholai Coal Power Plant, Mattala International Airport, Katunayake Airport Expressway, Moragahakanda Irrigation Development Project, the Southern Expressway, Hambantota Port, the Lotus Pond (Nelum Pokuna) Performing Arts Theatre and the expansion of the Colombo Port are some such projects funded through Chinese loans and assistance.

While this bewildering array of projects demonstrates a growing amity between China and Sri Lanka, the islands debt ratio did not paint a rosy picture. By the end of Rajapakse’s tenure, 90.6% of the Government total revenue was spent for debt servicing. The World Bank assessed Non-concessional and commercial components of the governments’ foreign debt to have risen from 1% in 2000 to 53% in 2016.  The Vision 2025 blueprint published by the Prime Minister’s office indicated Sri Lanka’s present public debt as reaching 79.3% of GDP. The islands “total outstanding external debt was $25.61 billion in April 2017….Chinese loans accounted for over $8 billion of this amount…” argued Mitra. Turning away from China is therefore no longer an option even if the political echelons desire it. Consequently, Sri Lanka has to maintain amicable ties to China. While the gradation does not have to resemble the Rajapakse era; Sri Lanka will continue to expand ties with Beijing.

Indo-Sri Lanka ties were on a firm footing from President Sirisena’s inception. Historically ties between the SLFP and India have always been strong. This relationship began under S.W.R.D Bandaranaike and Nehru and blossomed under Sirimavo Bandaranaike and Indira Gandhi. A continuation of this was patent during the 2015-2017 period. For example, from 2008 to 2017 the number of warships to the port of Colombo was 361. While 26 were from China, India docked close to three times that figure.

Addressing a distinguished gathering at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies on November 20^th, 2017, the former Finance and Economics Minister of India, Dr. Narayan acknowledged the 4.7 billion $ bilateral trade balance between the two countries as emblematic of a close economic relationship. Whilst he agreed that China outclasses India in commercial investments, he declared that soft assistance from India (aid and grants) to Sri Lanka excels that of China by a great margin. Prime Minster Wikremasinghe’s desire to conclude the ETCA with India and link India to the Trincomalee harbor and the Hambantota Airport is also reflective of Sri Lanka’s posture of expanding ties with South Asia’s big brother.  Moreover, the personal rapport between Modi and Sirisena has continued to reach new heights in the past years following numerous bilateral summit meetings between the two.

India continues to hold onto South Asia as it’s ‘backyard’ and the increasing Chinese influence in the region is viewed with apprehension and acrimonious distaste. India policy circles believe that if Beijing was to follow a hexiao, gongda policy in South Asia – uniting with the small (Pakistan, Bangladesh, Burma, Nepal, and Sri Lanka) to counter the big (India) – India must coalesce its neighbors into a tighter union with itself. This strategic friendship could be underlined by political, economic and social linkages. In praxis, this is evident in the case of Sri Lanka. As a result, charting a foreign policy with these competing postures of India and China becomes complex and challenging. Balancing the security and economic interests of Sri Lanka’s closer geographical neighbor and the worlds rising revisionist civilizational state is by no means an easy task. How has Sirisena managed in the two years he has been in power?

Balancing China and India: A brief retrospective of the Rajapakse and Sirisena presidential terms

As discussed below, leaning to one side over the other is no longer a viable option for Sri Lanka.  For years the island went through an ethnic conflict involving separatist terrorist militants against the Sri Lankan government. Once the war was over in 2009, President Rajapakse outlined his blueprints for economic growth. However, investments from western capitals were not forthcoming in the expected volume. Growing corruption and wasteful expenditure in conjunction with the clarion call from the west for reconciliation and truth-seeking pushed him towards China. Added to this was the lack of a long-term strategy under the Rajapakse administration.

This was accentuated by Grace Asirwatham, the Sri Lankan State Secretary to the Ministry of Foreign Affairs at a guest lecture at the University of Colombo on 08^th November 2017. Juxtaposing the Sirisena regime to the Rajapakse regime she conceded that the latter administration had its ‘own way of doing foreign policy…Foreign policy was then conducted by a small circle of people’. Brewster argues that ‘Rajapaksa not only seemed to favour Chinese investments but he also began to flirt with a limited Chinese security presence on the island. New Chinese-built ports at Hambantota and Colombo became symbols of Beijing’s presence in the region, fuelling claims of a ‘String of Pearls’ across the Indian Ocean. China built a satellite station and there were rumors of a possible air force presence. The turning point came in September 2014 when a Chinese submarine and minder made an unexpected visit to Colombo only days before the visit of Chinese President Xi Jinping to New Delhi’.

Mr. Gotabhaya Rajapakse, the brother of the former president, Mahinda Rajapakse and Sri Lanka’s former Secretary to the Ministry of Defense arguably played the most pivotal role in Sri Lanka’s foreign policy formulation. His article in a journal of the U.S. Department of Defense in 2014 reads: ‘It is essential to continue to strengthen the existing cordial relationships with powerful nations such as China’.  This strengthening was visible from 2003 to 2016 as Chinese vessels and submarines boasted 9 overall port calls and 3 military exercises with Sri Lanka. Bilateral high-level meetings between Sri Lanka and China reached a high point of 27 from 2005-2015 under the Rajapakse administration. Thus, Rajapakse seemed to favor a distinctly Pro-China foreign policy for Sri Lanka at the expense of considering India’s security concerns.

Sri Lankan scholars and policymakers have favored a more balanced foreign policy for the island in the post-Rajapakse era. While China tops the FDI chart to Sri Lanka; in the case of tourist visits the tables are turned and India maintains a considerable margin over China. Antagonizing either of the two states is not an option. But has the island in reality balanced between and accommodated the two rising powers? Whilst the Sirisena administration has sought to forge ties with both states does it resemble a case of equidistant balancing? And what must President Sirisena do to continue this balance?

In late July this year, the Sirisena government agreed to give China control of the Hambantota port — a 70 percent equity stake over 99 years — in exchange for writing off $1.1 billion of the island’s debt. On May 16^th this year, Reuters noted that the “Sri Lankan Prime Minister Ranil Wickremesinghe told Chinese President Xi Jinping that he welcomed increased Chinese investment in Sri Lanka’s major infrastructure projects”. Sri Lankan leaders have been warmly welcomed in Beijing and ties between the two governments appear to be resilient. However, unlike Rajapakse, deference is also given to India’s security concerns. This was clearly exhibited when a Chinese submarine was refused to dock in the Colombo Port in 2017; in contrast to the 2014 decision of allowing a Chinese nuclear submarine to dock in the same port. As Goldstein discerned in her book Meeting China Halfway: How to Defuse the Emerging US-China Rivalry: “the docking of Chinese submarines in Sri Lanka during September and November 2014 (had) caused a stir in Indian national security circles” (p.306). This policy was expeditiously discontinued by the present regime.

India has been increasingly seen by the new government as a power Sri Lanka must engage with and accommodate. For example, Tilak Marapana who assumed duties as the Minister of Foreign Affairs on the 18^th of August met with the High Commissioner of India H.E. Taranjit Singh Sandhu just four days later. 18 days later he called on Prime Minister Narendra Modi in India. The Hatton Dickoya Base Hospital, which was built on a Rs. 1,200 million funds from the Indian government, was vested with the public by the Indian Prime Minister Narendra Modi who arrived on the invitation of President Sirisena for the Annual Vesak Celebrations. Indeed, the personal rapport between the two heads of state had been extremely strong and this relationship was further augmented after India expressed its desire to sign the Economic and Technology Cooperation Agreement (ETCA) as well as take over operations in the loss-making white elephant –Mattala International Airport.

An article posted in the governments Ministry of Defense website aptly sums up the reinvigorated ties between India and Sri Lanka. Describing a visit by the Indian foreign minister to Sri Lanka in 2016 the website quotes both the Sri Lankan President and Indian Foreign Minister Mrs. Sushma Swaraj in the following manner: “India has been a friend of Sri Lanka for a long time. That is why I selected India for the first state visit after my election as the President”, said President Sirisena. Responding to the President, the Indian Foreign Minister stated that India’s policy is to keep close friendships with the neighboring countries. “The Indian government gives priority for Sri Lanka in this regard”, she said”.

In essence, not only has Sri Lanka endeavored to forge stronger ties with both countries but a balance between India and China is also manifest. The value of this is especially pronounced given that the balance of power in Asia is shifting towards China. The longevity of the islands balancing foreign policy depends on Sri Lanka’s bilateral relations with  India and China, the bilateral ties between Xi and Modi as well as the Sri Lankan governments’ ability to take into account and accommodate the concerns and strategic interests of both China and India.

This article is an adapted version of a Research Paper presented to the ‘National Center for Advanced Social Sciences and Humanities Symposium 2017’ titled: Sri Lanka’s ties with India and China: appraising the need for a ‘balanced’ foreign policy.

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.