Sri Lanka: Caught in an Indo-China ‘Great Game’?

A blueprint for Sri Lanka’s foreign policy.

Competition is a natural byproduct of major powers navigating an anarchic world. Small states operating in such a milieu, however, face a policy dilemma when strategizing their foreign policy. Sri Lanka, sitting in the epicenter of the arc connecting the Persian Gulf to the Strait of Malacca, has captured international attention as a key battleground between Beijing and New Delhi in their tussle for influence in South Asia. While some scholars argue that the island is a personification of China’s “debt trap diplomacy,” others contend that it should not be a poster child of falling into a Chinese “debt trap,” as debt to China is less than 15 percent of Sri Lanka’s total external debt.

Concerns over Sri Lanka’s sovereignty have been rife following the $1.12 billion debt-to-equity swap that saw Hambantota port handed over to China and the proposed lease of the Mattala International Airport to India. Sri Lanka is in no position to break off economic ties with either power. According to Chinese Ambassador to Sri Lanka Cheng Xueyuan, by the end of 2017 Chinese companies had completed infrastructure projects in Sri Lanka worth $15 billion. Meanwhile, April 2017 saw India agree to refurbish and use 99 oil tanks in the Trincomalee harbor in Sri Lanka as a joint venture between the Lanka Indian Oil Corporation and the Ceylon Petroleum Corporation. A $2.6 billion pledge for development projects in Sri Lanka in 2016 as well as bilateral naval exercises with New Delhi evince the close relationship between the two countries. Consequently, maintaining close diplomatic and economic ties with both Asian powerhouses is imperative for Sri Lanka.

Be that as it may, a geopolitical rivalry between the two may have lasting ramifications on the island if Sri Lanka makes a false step. How can small states such as Sri Lanka, caught in the currents of a major power competition, safeguard their security and autonomy while reaping economic benefits? This article suggests seven steps that Sri Lanka — and other small states — can take in order to carefully navigate a major power rivalry in the maritime domain.

First, it is in Sri Lanka’s best interests to devise a bipartisan foreign policy white paper. What are the expected dividends from a foreign policy white paper? Analysts maintain that the National Unity Government of Sri Lanka has been ad hoc in its decision-making, which has led to the execution of suboptimal policy choices. It is imperative that before foreign projects are implemented, unbiased and comprehensive investigations are carried out to assess how they could impact Sri Lanka in the security, economic, and ecological domains. In tandem, diplomatic support for a rules-based maritime order and a foreign policy white paper (which is in essence a fundamental expression of national policy), could establish consistency and continuity in Sri Lanka’s foreign policy regardless of the regime that comes to power. Not only would it boost investor confidence, guide the island toward utilitarian preferences, and establish stable relations with major powers but it would also significantly ease the workload of the island’s diplomatic staff when engaging with major powers.

Second, a foreign policy white paper needs to be coupled with a defense white paper. As major power interest has shifted to Sri Lanka, it is imperative that local policymakers adequately calculate the risks and benefits involved in economic, military, and diplomatic relations with major powers operating in the Indian Ocean. A defense white paper would outline the broad strategic policy framework for defense planning and sketch the key defense priorities for Sri Lanka. It can also be viewed as a confidence – and security – building measure, which increases transparency not only in the domestic context, but also internationally. This would ensure that Sri Lanka’s foreign policy intentions and actions are not misinterpreted by major powers operating in South Asia. It would also permit the institutionalization of a balanced and utilitarian foreign policy without arousing the apprehension and mistrust of major powers or forgoing core national interests of the island.

Next, a five to ten year medium-term plan on infrastructure priorities and bipartisan consensus on how to expand exports is vital for Sri Lanka. As indicated by a former deputy governor of the Central Bank of Sri Lanka, the island must “beat the middle income trap through a viable export development policy.” For this purpose, pursuing free trade agreements with China and India is an advantageous and viable strategy of export led growth, which has unfortunately stalled owing to public protests.

Importantly, misinformation needs to be more firmly tackled. An effective government communication strategy and greater transparency are essential to ensure the local population understands the benefits expected and accrued from international engagements with major powers. Moreover, in the words of one analyst: “the next leader needs to invest in institutionalizing the foreign policy of Sri Lanka rather than persisting with the overly personalized foreign policy which exists today and has [been] followed by many others in the past.”

Sri Lanka stands to benefit from China’s Belt and Road Initiative (BRI). However, when approving or implementing BRI projects, policymakers must verify whether Sri Lanka’s interests are met and ensure that the island’s security, economy, society, or ecology are not adversely impacted. A multi-actor approach of pooling together resources from universities, nongovernmental agencies, and civil society groups could be recommended as a way in which haphazard and extemporaneous decisions could be avoided. Utilizing a multi-actor approach, foreign policy decision-makers would be better able to determine the parameters or boundaries of what is, or is not, a part of the security and economic dynamic at a particular time. This process would also enable decision-makers to utilize multidimensional perspectives in academic and institutional networks so that the positive and negative externalities of pursuing a particular course of action are better understood. Such foresight in tandem with project feasibility studies would allow for a better-judged decision, which in turn will have greater chances to benefit the country in the short and long term.

While prioritizing economic diplomacy, Sri Lanka must also take steps to make clear that investments and projects on the island’s territory do not function as the exclusive “preserve of one country.”

Lastly, leaders must keep in mind that policy uncertainty could ward off potential future investments and exacerbate geopolitical anxieties. Critical and objective reflection as well as informed decision making is of utmost importance for Sri Lanka. These features were clearly absent in the National Unity Government’s policy making process (the National Unity Government since 2015 encompassed two major political opponents – the United National Party and the Sri Lanka Freedom Party). Instead, policy making tended to be unwieldy, dysfunctional and at times, seemingly erratic. Therefore, policy alignment, bipartisan consensus, and clearly divided remits are essential if politicians wish to enter into Grand Coalitions. Whenever differing positions are adopted by the prime minister and president, corrective action needs to be taken in order to bring these alternative views to a common and authoritative statement of policy.

[Mr. Shakthi De Silva serves as a Visiting Lecturer in the Bandaranaike Diplomatic Training Institute. He has published widely including in South Asian Survey, the Global–E journal of the University of California, and the London School of Economics South Asia Blog]

Sri Lanka’s foreign policy - Security Architecture

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Sri Lanka’s foreign policy has often been termed as being fundamentally nonaligned. But what does ‘nonaligned’ really mean in the post-cold war era? Since the end of the cold war, academic and scholarly publications have oft criticized the ambiguity surrounding both the term and the membership of the nonaligned movement. In this brief speech I don't intend to discuss or decipher what form of nonalignment Sri Lanka followed in the past. I'm sure the diplomats present here today have a better understanding than I do of the varied nuances of previous administrations foreign policy. Instead I intend to re-define the meaning of nonalignment as I perceive in the present administration’s foreign policy. 

The present administration of Sri Lanka is focused on building amicable relations with all countries. This has been repeatedly iterated by the president, prime minster and the foreign minister on numerous occasions. I believe that the present administration has redefined the import of the term nonaligned. This new form of ‘nonalignment’ is not centered on a cold war mentality but instead, is more focused on developing friendly ties with great and small powers to an equal degree. As a small developing state, Sri Lanka’s friendly foreign relations have supported the country's image as a peace-loving country which wishes to engage with all states. 

The crux behind this foreign policy can be illustrated as one which encompasses; a unified and interconnected security architecture.  Establishing relations with great and small powers - to a more or less equal degree - has enabled Sri Lanka to obtain significant economic and financial support as well as other forms of assistance. This new security architecture enables the island to have amicable relations with all the major and small powers without being seen as being aligned to any. Not only does this enable Sri Lanka to escape from creating a security dilemma among the great powers but it also circumvents any external pressures from neighboring and distant great powers.

I also intend to briefly skim through some of the highpoints I have discerned over the recent weeks with regard to Sri Lanka’s relations with the following great powers: U.S.A, China, Russia and India.

Since the regime change of 2015, relations with America have noticeably improved. This is undoubtedly reflected in the government’s action of co-sponsoring two resolutions on Human rights, accountability and reconciliation with the U.S.A. Present cooperation on one of the most contentious issues between the former Sri Lankan government and U.S.A; are a testament to this enhancement of ties. The first-ever Pacific Partnership goodwill mission to Sri Lanka by America as well as the inaugural US – Sri Lanka Partnership Dialogue reflects the American administration’s desire to reset its relations with the island. 

Relations with Russia have also been amicable. Naturally the Sri Lanka Freedom Party to which the present president belongs to, have had considerably good ties with Russia since the cold war. The recent visit of the Sri Lankan president to Moscow to meet President Putin and the latter’s gifting of a royal sword; is symbolic of the enduring relationship between the two countries. I perceive the timing of the visit as especially emblematic of the present presidents desire to appear nonaligned; not only to the international community but also to the domestic public.

2017 marks 60 years since the establishment of diplomatic relations between China and Sri Lanka as well as 65 years since the signing of the rubber-rice pact between the two countries. This clearly emphasizes the historic connection between the two countries. Although the present administration has recalibrated its ties with China in contrast to the previous regime, ties are still strong and will continue to remain so. General Chang Wanquan’s (Minister of Defense and State Councilor of the People’s Republic of China) official visit to Sri Lanka last week is a clear signal of this unchanging rapport.

Ties with India and Sri Lanka have historically had its ups and downs. However a noticeable feature of late is the strong personal ties that exist between the Indian Prime Minister Modi and the Sri Lankan president. Although the Economic and Technical Cooperation Agreement (ETCA) with India has had a recent spurge of public protests I do not believe that the relationship between the two governments and especially between the two presidents will undergo any impairment in the foreseeable future. India’s decision to sign the Logistics Exchange Memorandum of Agreement (LEMOA) with United States in 2016 (which gives the militaries of both countries access to each other’s facilities for supplies and repairs) as well as India's desire to enhance its maritime defense strategy gives added reason why Sri Lanka should adopt a balanced foreign policy of maintaining friendly ties with all countries; both near and far. 

Among the most important components of Sri Lanka’s foreign policy considerations must be its closer great powers; China and India. While China’s economic assistance is extremely important for the development of the country, India’s security concerns must also be factored in such considerations. Conducting joint military exercises with both countries - especially joint naval exercises - would be a step that Sri Lanka could take to balance its ties with both countries.

To sum up; the present regime has fashioned an altered formulation of nonalignment which is aptly suited to the 21^st century’s geopolitical challenges.  This security architecture which is focused on building amicable ties with great and small powers to an equal degree is indubitably one of the best foreign policies that a small state such as Sri Lanka could apply at present. 

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This note is an adapted version of the views expressed by Shakthi De Silva at the invitation of the Deputy Chief of Mission of the Embassy of the United States of America to the diplomatic staff and officials of the Ministry of Foreign Affairs officials on 03-04-2017.  

Shakthi De Silva was the recipient of the Sirimavo Bandaranaike Memorial award for excellent performance at the XIII Diploma in Diplomacy & World Affairs Course of the BIDTI in 2016.

 

       

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Panda Diplomacy

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China has used its pandas to help foster relationships with other countries for more than half a century. This unique way of diplomacy has been practiced by Chinese rulers since the Tang dynasty. The Chinese view the Pandas as a national treasure.Chinese policy makers employed a soft power strategy to improve its relations with countries all over the world by gifting Pandas. These Pandas were gifted to countries like the United States, United Kingdom and the Soviet Union to ease tensions and to build new diplomatic relationships. Yet this all changed when the Panda’s became an endangered species. Nowpandas are only loaned to friendly, geopolitically and economically important partner countries of China. From the late 50’s to the early 80’s, China has gifted 28 pandas to nine countries.

The First Panda Diplomats 

Ling-Ling and Hsing-Hsing were gifted to the United States in 1972.This was a generous gift of friendship offered to the United States by the Chinese government after the first historic state visit by an American president to People’s Republic of China. President Richard Nixon and his delegation re-opened the Sino-American partnership which thrives to this day after Chinese Prime Minister Zhou Enlai and top US diplomat Henry Kissinger laid the foundations during the height of the cold war.

Panda Loans 

The role of the Panda has changed since the early 80’s.These furry animals are no longer used purely as diplomats. China offered pandas to other countries only on loans.A 10 year loan terms includes a fee of $ 1 million per year and a requirement that cubs born during the loan period be the property of the People's Republic of China.A team from the Oxford University has found out that panda loans coincided with trade deals for valuable resources and technology. This new strategy is based on a Chinese term called "guanxi" loans which is used to describe personalised networks of influence, trust, reciprocity and loyalty.

In the present day the Chinese does not use Pandas purely as diplomatic tools to capture the attention of governments but to build a relationship with citizens of foreign countries while using the finances they earn through panda loans to preserve the endangered pandas. Panda still remains one of the most important Chinese symbols and an icon of Chinese soft power.

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G.M. Lahiru Chamara Doloswala

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The South China Sea

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Some say it is the most important area of ocean in the world, the South China Sea is rich in natural resources and 30% of the world’s shipping trade flows through this area. The rising super power, People’s Republic of Chinaclaim to South China Sea has been a highly debated issue in international affairs.

There are rich oil and gas resources in the South China Sea. It is also called “the second Persian Gulf” by experts. An astonishing amounts of oil reserves are buried in the South China Sea. It is estimated that around 7.7 billion barrels of crude oil and natural gas reserves of around 266 trillion cubic feet are up for grabs. A report by the U.S. Energy Information Administration in 2013 raised the total estimated oil reserves to 11 billion barrels.

Five countries lay claim to parts of South China Sea and most of these countries base their claims on the United Nations: Law of the Sea Art.57 Breadth of exclusive economic zone; “The exclusive economic zone shall not extend beyond 200 nautical miles from the baselines from which the breadth of territorial sea is measured”. Sovereign Countries have exclusive rights for all the trade and resources in the Exclusive Economic Zones (UN: Law of the Sea Art.56).

Looking through the filters of China, Chinese argue that they have a historical claim to the South China Sea and they have their own explanation for their claims to major parts of the South China Sea. The so called NineDash Line refers to the demarcation line used initially by the Government of the Republic of China and subsequently also by the Government of the People's Republic of China.

After the Japanese Empire was dismantled in the end of the Second World War, Japan lost all of the claims to the South China Sea and the Government of the Republic of China exploited the moment to expand their claims to the South China Sea. The Republic of China claimed Spratly Islands, Parcels Islands and Pratas Islands. In the San Francisco Conference on 1951, China asserted their rights to the islands, Vietnam and Philippines followed. Even after the UN established the 200 mile Exclusive Economic Zone in 1973, the People’s Republic of China stood their ground and held their claim to the South China Sea.

The Philippines in January 2013 initiated arbitration proceedings against China's territorial claim by saying it is unlawful under the United Nations Convention on the Law of the Sea. China refused to participate in the arbitration. The five arbitrators of the tribunal agreed unanimously with the Philippines on 12 July 2016.The arbitrary tribunal concluded that there was no evidence that China had historically exercised exclusive control over the waters or resources, hence there was "no legal basis for China to claim historic rights" over the Nine Dash Line. The tribunal also determined that China had violated the Philippines' sovereign rights and caused "severe harm to the coral reef environment”. The Chinese government rejected the ruling by the arbitrary tribunal. The Chinese are in a position that China's territorial sovereignty and marine rights in the South China Sea would not be affected by the Philippines South China Sea ruling while doing their utmost to resolve disputes with their neighbors. Even though it is said the South China Sea dispute is a melting pot or an international crisis, disputes still remain peaceful and are being negotiated legally and diplomatically to find a peaceful settlement to all parties involved.

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G.M. Lahiru Chamara Doloswala

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