For Sri Lanka, India has emerged as a knight in shining armour. Sri Lanka is going through its worst economic crisis, with power cuts becoming the order of the day and the country reeling under an intense shortage of essential supplies, including fuel, food and medicines. India’s Finance Minister, Nirmala Sitharaman recently assured Sri Lanka of all possible help from New Delhi. This came even after India has already extended financial assistance worth more than $1.5 billion, including two lines of credit for purchasing fuel, food and medicines, to help the neighbouring nation tackle its towering challenges.
The International Monetary Fund has now come out and begun showering praises on India for its benevolence and spirit of kind-heartedness. Kristalina Georgieva, International Monetary Fund (IMF) Managing Director, on Monday, appreciated India’s help to Sri Lanka in tackling its economic crisis. In the backdrop of India extending tremendous help to Sri Lanka, the IMF chief assured Colombo of all possible help from its side as well.
Georgieva also congratulated India on its successful vaccination programme to control the spread of COVID-19. She also appreciated India for extending COVID-19 relief support to other vulnerable countries.
Thanks, but No Thanks
I’d like to take this opportunity to wholeheartedly thank the IMF for appreciating India’s sustained efforts at trying to alleviate the China-sponsored crisis that Sri Lanka is currently gripped with. It never hurts to accept the appreciation of an international institution of the IMF’s stature.
The IMF has been quite vocal in supporting India in the recent past. First, it declared India to have been successful in eliminating extreme poverty despite the battering that the global economy received from persistent Covid-19 waves over the past two years. The IMF also appreciated India’s marathon campaign of reforming its economy at a structural basis. The cherry topping is the fact that the IMF has projected India to emerge as the fastest growing economy in 2022, with the country expected to log an 8.2% growth rate.
India is fast emerging as an economic powerhouse that the world looks up to. In fact, the IMF can offer India’s experiences as a case study to other developing nations around the world. However, one piercing issue remains, and must be addressed on an immediate basis.
What’s with the Silence when it comes to China?
Sri Lanka finds itself in the mess it is in today due to China and its exploitative neo-colonial ambitions in the Indian Ocean. China debt-trapped Sri Lanka, seized its strategic assets and then abandoned the oceanic country.
Sri Lanka is burdened by an embarrassing debt which it is unable to pay to China. Sri Lanka has run up an external debt of more than $45 billion, about 60% per cent of its nominal GDP (2020). In the last decade, China has lent Sri Lanka over $5bn (£3.7bn) for projects including roads, an airport, and ports. In 2022 alone, Sri Lanka is required to pay about $4.5bn in debt.
Of course, the Covid-19 pandemic only exacerbated and preponed the inevitable for Sri Lanka. However, no international institution is willing to address the elephant in the room. The IMF in particular has not condemned China for playing an instrumental role in destroying Sri Lanka.
The IMF should have been pounding China for how it has ruined Sri Lanka. Instead, the institution is maintaining stoic silence on the issue, thus motivating China to pursue its debt-trap policies across the world, particularly in the Indo Pacific with enhanced vigour. This was an opportunity for the IMF to set a precedent. That the body is showering praises on India does not steal away from the fact that it is refusing to speak against China’s exploitative economic policies.
The IMF must take a stand if it wants to retain its legitimacy. It cannot become a lapdog of China like the World Health Organisation. The United States has considerable influence over the IMF, and Washington must ensure that the body takes China by the horns. India, which has also emerged as a major global influencer, must begin lobbying against China’s neo colonial ambitions and their consequences for countries around the world.