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Sri Lanka should sign the Instrument of Accession

Akshay Narang by Akshay Narang
30 March 2022
in Geopolitics
Sri Lanka debt
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Even as Sri Lanka fights a huge debt crisis to somehow save its economy, four things are becoming clear-

  • Sri Lanka needs help.
  • Sri Lanka wants India to help it.
  • India wants to help Sri Lanka, so that it doesn’t end up taking China’s help.
  • Sri Lanka doesn’t want China’s help.

So, we have a simple suggestion- Sri Lanka should simply tell us how much money it needs before it will kick out China.

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Aid diplomacy

India started engaging and aiding Sri Lanka, as soon as it became clear that things were slipping out of Colombo’s hands. On March 17, India and Sri Lanka signed a Line of Credit worth $1 billion. This would enable Colombo in procuring food, medicines and other essential items to overcome its economic troubles.

It became clear that Sri Lanka would be receiving Indian aid to tide over its ongoing crisis.

Sri Lanka plays the China card

But you have to understand what may be going on in Sri Lankan President Gotabaya Rajapaksa’s mind. He knows that his entire political reputation is at stake. And he must save his country at any cost. Therefore, he perhaps wanted to assure that Indian aid keeps coming.

This is why Sri Lanka played the China card. So, days after Colombo received a billion-dollar line of credit from New Delhi, it requested a new loan and buyer’s credit from China for $2.5 billion.

Read more: How Sri Lanka’s Hambantota became a Colony of China

If India could give a soft loan of $1 billion to Colombo, it wasn’t really much of a task for New Delhi to lend a few more billions on easy terms to the island nation. So, Sri Lanka didn’t really need China’s help. Its request to Beijing was therefore more of a disclaimer- if New Delhi doesn’t continue extending monetary aid, Sri Lanka could go and sit on Beijing’s lap.

Gotabaya Rajapaksa knows that Prime Minister Narendra Modi wants China kicked out of Sri Lanka. Therefore, playing the China card is a natural temptation for Colombo.

Another round of aid negotiations with India

As expected, Sri Lanka is again in negotiation for another aid package with India.On Monday, Sri Lanka’s central bank Governor disclosed that the island nation had sought another credit line of $1.5 billion from India. The new credit line is in addition to the one billion dollar worth of assistance that New Delhi has already arranged for Colombo.

Ajith Nivard Cabraal, the Governor of the Central Bank of Sri Lanka said, “There is a very close discussion continuing for an additional support of $1.5 billion (with India) by way of oil support as well as other essential goods support of credit terms.”

India is now likely to accept Sri Lanka’s request. Given the historical and cultural linkages with its southern neighbor, India has committed itself to helping the people of Sri Lanka find a way out of their severe economic crisis.

Read more: Sri Lanka becoming Chinese colony is lesson for others; stay with India, or watch yourself crumble

What Sri Lankan leaders need to understand is that they can be forthcoming with New Delhi. Instead of seeking aid in tranches and playing the China card, they can simply kick China out of their country and tell India exactly about the kind and quantum of aid that they need.

The aid diplomacy should therefore be replaced by reasonable coordination.

Tags: BJPChinaChina-Sri LankaIndiaIndia-Sri LankaNarendra ModiXi Jinping
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