Any port in a storm

Tuesday 13th October, 2020

The US and its allies are weeping buckets for Sri Lanka, which, they say, is losing its sovereignty owing to its heavy dependence on Chinese loans. They want Sri Lanka to break free from what they call the Chinese debt trap. They are proffering loads of advice, but will not loosen their purse strings to help ‘the victim’. What Sri Lanka needs most at this juncture is financial assistance, and certainly not advice. Will Washington grant Colombo a soft loan without asking for land, a port or permission for its troops to be stationed here in return? Or, will any of the US allies do so?

No other nation is responsible for Sri Lanka’s predicament. Its economy had been in bad shape even before being hit by COVID-19 owing to its mismanagement over the years. Now, the situation has taken a turn for the worse, due to the global health emergency. Left with a choice between China and the IMF to raise funds, Sri Lanka has turned to China, which sent a special delegation here, the other day, and pledged assistance.

It is being argued in some quarters that an IMF programme would have placed Sri Lanka on a debt-sustainable path, from which some credibility would have accrued by way of creditworthiness vis-à-vis the country’s downgraded ratings. Tenable as such assertions may sound, a deal of that nature could open the door to interference by the West and its Asian lackeys in the affairs of this country.

One may argue that Sri Lanka can opt for the Millennium Challenge Corporation (MCC) grant, but there is no such thing as a free lunch anent the US aid as well. On the other hand, the funds on offer are not sufficient, given Sri Lanka’s financial needs, and the MCC compact, too, will have a corrosive effect on the country’s sovereignty; instead of the Chinese, there will be Americans here in their numbers in the event of the compact being inked, as the opponents of the proposed controversial deal argue.

Do those who are urging Sri Lanka to avoid further ‘Chinese debt traps’ and safeguard its sovereignty really feel for it? One may recall that the US-led Co-Chairs of the Tokyo Conference on Reconstruction and Development of Sri Lanka, in the early noughties, lured this country into an aid trap of sorts, endangering its national security and territorial integrity; they had the then UNP-led government give in to the LTTE to the point of compromising the country’s national security and territorial integrity. They did so by tying an aid pledge (USD 4.5 billion) to progress to be made in talks between the government and the LTTE, which was abusing a fragile truce to prepare for the next phase of its war. The Sri Lankan government’s yen for dollars enabled the LTTE to make the most of the flawed ceasefire to take delivery of weapons, regroup, consolidate its power in the North and the East, infiltrate the other areas, and, most of all, move its heavy guns to places from where it could target the Trincomalee Harbour and the Palaly airstrip and cut off sea and air supplies to the troops based in the North. In fact, the LTTE carried out its plan, in 2006, when hostilities resumed, and succeeded in pounding both strategic locations, but luckily precautions had been taken by that time. But for the change of government, in 2004, and the defeat of UNP presidential candidate Ranil Wickremesinghe in 2005, perhaps, the LTTE would have achieved its goal, and the Trincomalee harbour would have been under it, thanks to those who say China has got Sri Lanka to cough up the Hambantota Port.

It has been a case of any port in a storm for Sri Lanka, which is desperate for funds to service its debt and keep its economy afloat. Unfortunately, the focus of the incumbent government is on the political front. It is apparently labouring under the delusion that securing the passage of 20th Amendment to the Constitution is half the battle in resolving the ever worsening economic crisis.