In South Asia, Sri Lanka — with its geographically unique position in the Indian Ocean, and with a strong BRI partnership established during the presidency of Mahinda Rajapaksa — has once again become a key player.
By Asanga Abeyagoonasekera
The term Indopazifischer Raum (Indo-Pacific Space) coined by German geopolitical thinker Karl Haushofer in 1920, is perhaps the first academic statement on the Indo-Pacific. Haushofer observed the marine space interlinking the two-great civilisations in Asia, India and China, although separated by land by the geography of Tibet. Japan in the Indo-Pacific was identified by Haushofer, who contrived the German-Japan axis during World War II, with their similar interest to defeat Britain and the US from the Pacific theatre. The contemporary revival of the term has gained prevalence in geopolitical discourse after Japanese Prime Minister Shinzo Abe employed the terminology in his speech to the Indian Parliament in August 2007.
Germany in the Indo-Pacific and Quad
German Foreign Minister Heiko Maas explains: “It is already foreseeable today that, more than anywhere else, the shape of tomorrow’s international order will be decided in the Indo-Pacific. Germany should not be an observer and thus play an active role, a rules-based order should be the ethos of the German foreign policy on Indo-Pacific.” For the first time, the German government has released a 70-page strategic policy guideline for the Indo-Pacific. While Germany is not an Indo-Pacific nation, many European states are joining the Indo-Pacific axis for enormous trade potential in Asia, a departure from the Atlantic axis. Thus, the EU perceive China as a systemic rival promoting alternative models of governance.
Today, the Quad (India, Japan, US, and Australia) is being institutionalised and possibly broad-based to include more partners with a special focus on upholding the rules-based orderfor a free and open Indo-Pacific. As stated by US Secretary of State Mike Pompeo at the recent Quad meeting in Japan: “The ministers who gathered in Tokyo all came to understand shared threat and the opportunity for us to work together not just diplomatically, but on the economic front to partner to fight back against Beijing.” It is a fact that China’s investments and presence in the Indian Ocean have increased, and there is no economic and financial match for Beijing in the present day. China’s involvement in island states has grown considerably, and Sri Lanka is a clear example in this regard having received a large number of loans from China. Secretary Pompeo will visit Sri Lanka towards the end of the month and is certain to align Sri Lanka with the rules-based order of the Indo-Pacific along with India, directly targeting Chinese predatory infrastructure projects.
Opaque loans in weak economies
Henry Kissinger warns that if the present US-China tension continues, “we will slide into a situation similar to World War I.” The US administration has accused China of spreading Covid-19, economic espionage from Huawei to TikTok, China’s assertiveness in the South China Sea and its opaque loans to many nations. Sri Lanka has been cited multiple times with regard to Chinese opaque loans lacking transparency. US Ambassador in Sri Lanka, Alaina B. Teplitz, rebuked that “Sri Lanka should engage with China. It should do so in ways that protect its sovereignty and generate real prosperity for everyone, not just elites. It’s not about choosing between countries, it’s about transparency and charting a path that truly benefits all Sri Lankans.” The Ambassador’s warning is pretty straightforward. Sri Lanka counting on China has fewer fallback options. There is too much of a China-centric dependency which limits the Sri Lankan government to look at alternatives. While successive governments have proceeded to borrow and lease national assets, sovereignty will inevitably be threatened. The Chinese embassy in Colombo reacted in its ‘Wolf Warrior’ style to the Ambassador’s comments. “The US has no power or obligation to lecture on China-Sri Lanka relations. Such naked hegemony, supremacy and power politics will neither be tolerated by the Chinese nor be accepted by the Sri Lankans.” Sovereignty spectrum will be threatened in weak nations or failed states. The US with its liberal hegemonicmission, legitimising intervention or China’s debt-trap diplomacy is directed more towards weak nations. A few weeks earlier, Moody’s Investors Service had downgraded the sovereign rating of Sri Lanka to Caa1, or ‘very high credit risk,’ equal to the rating of Iraq, Mali, Angola, and Congo, from the earlier B2 rating. There is a brewing economic crisis amidst the Covid-19 induced global economic meltdown with Sri Lanka expected to face a heavy debt repayment schedule in the coming years.
No more loans and contradictory policies
Absence and disengagement of the US from the regional security architecture will not only embolden a new form of security threat, it could enable a departure from a rules-based order in the international system, threatening the very basis of international affairs. How does Sri Lanka, sandwiched by the Indo-Pacific strategy and China’s BRI, carve out a balanced foreign policy? In a recent interview, the newly appointed Foreign Secretary of Sri Lanka, Jayanth Colombage, stated: “President has said no more loans our external debt to GDP is as high as 86% ,if we earn $100 we have to pay $86.” Further explaining, “we will not allow others to play football in our field, at least we should become a member of the team.” Considering recent developments, it seems that Sri Lanka has joined the Chinese team due to the large volume of financial assistance and dependence, borrowing a further US$500 million on a 10-year concessionary loan. Another multi-million-dollar grant was made after the recent high-powered Chinese delegation’s visit. Whilst accepting Chinese grants, the US MCC grant was heavily politicized and frozen. This position will make Sri Lanka’s usual foreign policy hedging or external balancing which is to carry out the mix of a contradictory policy of closeness with China and the US at the same time fragile.
Chinese diplomacy of BRI
Two high-powered Chinese delegations headed by Yang Jiechi and Wang Yi travelled in two directions this month. The visits include South Asia, Middle East, North Africa, the Balkans and four East Asian countries. Senior diplomat Yang’s delegation were to visit three maritime nations — Sri Lanka, UAE, Algeria and one landlocked nation, Serbia. These nations play a substantial role in China’s BRI. With the largest share of 56 percent of Chinese investments in the region directed to Serbia, it sits at the crossroads of central and south eastern Europe. Algeria has become China’s fifth-largest trade partner in Africa with close to USD $10 billion. UAE is a key strategic partner in the BRI linking China with Asian and European markets with a bilateral trade (non‑oil) of US$ 50 billion. In South Asia, Sri Lanka with its geographically unique position in the Indian Ocean and with a strong BRI partnership established during the presidency of Mahinda Rajapaksa has once again become a key player. Yang Jiechi’s visit was the first high powered Chinese visit to South Asia after the pandemic and Sri Lanka was the first destination. The Rajapaksa sibling regime has ensured Beijing of continuity of its support towards BRI and has further invited Chinese investment and funding to upstart its ailing economy.
With Gotabaya Rajapaksa’s victory followed by his brother Mahinda Rajapaksa’s parliamentary victory, China has swiftly revived its past Rajapaksa 1.0 (2005-2015) diplomatic relationship. This was visible with the large amount of financial assistance provided and reassurance to support Chinese infrastructure projects during the Rajapaksa 2.0 regime. Yang Jiechi’s visit will further bolster the Sino-Lanka relationship as the Chinese diplomat assured Beijing’s continuous support from funding to supporting at international forums including UNHRC. President Gotabaya’s development policy framework, ‘Vistas of Prosperity and Splendour,’ was thus appreciated. “We will support not from words but by action,” said Jiechi. President Gotabaya has further welcomed Chinese assistance to develop Sri Lankan villages just like China has brought prosperity to many economically deprived Chinese villages. The successful Chinese visit amplifies Rajapaksa’s foreign policy direction tilting towards China amidst his pledge to carve an equidistant foreign policy. While equidistant is merely rhetoric to an ailing economy, external geopolitics continue to threaten the region as Indian scholar Srikanth Kondapalli correctly assess by highlighting that ‘a large-scale encirclement design by Beijing, which is actively roping in Nepal and Sri Lanka, besides provoking Pakistan to open a second front against India.’ Unfortunately, the Sri Lankan foreign policy apparatus has not assessed this external factor and the new phenomenon of China in South Asia. This is accurately noted by Ambassador Shivshankar Menon, the Chinese willingness to be involved directly or indirectly in internal politics of South Asian countries, referring to the clear expression of preference of one candidate in Sri Lankan elections.
For a regional security architecture to function there should be a cooperative security concept to anchor. What you see are exclusive alliances built to counter Beijing’s assertiveness. India, Sri Lanka’s neighbour and a main Quad partner with multiple defence cooperation agreements with the US, extending further towards Basic Exchange and Cooperation Agreement (BECA) to share geospatial defence intelligence, will see the emerging patterns in Sri Lanka with China unfavourable. Missing the bigger picture, an increasingly expired scholarly tradition of non-alignedor neutral foreign policy takes comfort and simplifies the rhetoric, ignoring the actual geopolitical vectors dragging it towards instability. The heavily indebted Sri Lanka is at aconundrum, unwittingly falling into the trap and stands miss many opportunities if left out of the rules-based order.
The views expressed above belong to the author(s).