Sri Lanka’s Foreign Policy amid Geopolitical Transformations: 1990-2024 – Part III

Global Strategic Transformations

Since the 16th century, global power has largely been concentrated in the West, driven by European colonial expansion, industrialisation, and later, US dominance. However, in the 21st century, this balance is gradually, yet profoundly, shifting. This global power shift is evident in four key trends that have shaped the post-Cold War era: the relative decline of the United States, a renewed Cold War-style rivalry between China and the US, Asia’s resurgence, and the US policy shift—its pivot to Asia and the Indo-Pacific. Sri Lanka’s foreign policy must navigate these structural shifts, which carry significant implications for economic partnerships, security alliances, and geopolitical positioning.

Relative Decline of the United States

The relative economic and political decline of the United States, in the new millennium, marked a pivotal turning point in global power dynamics. The US leadership interpreted the end of the Cold War as an ideological victory for liberal democracy. The Cold War did not end through a violent military confrontation, but rather as a result of the voluntary dissolution of the Soviet Union. In the immediate aftermath, the United States emerged as the world’s sole superpower, the undisputed leader of the global order. However, over time, the US began to face mounting challenges from both internal and external factors. The 2008 financial crisis, the rise of Islamic fundamentalism, the protracted wars in Iraq and Afghanistan, and increasing domestic political polarization all contributed to a decline in US global influence.

The decline of US power, as a global leader, is not sudden. As early as 1973, President Richard Nixon acknowledged that the post-war era in international relations had ended. He observed that the United States had shifted from a nuclear monopoly in the mid-1940s to nuclear superiority in the 1950s and, by the 1960s, to rough strategic parity with the Soviet Union. The Nixon-Kissinger leadership predicted that more complex multi-polar power relations were emerging, replacing the simple bi-polar alignments that characterised the post-World War II era. He also noted that the changing mood of the American people signalled the end of the postwar international order. At the beginning of the Cold War, the US public strongly supported a global leadership role. However, Nixon observed that “after almost three decades, our enthusiasm was waning and the results of our generosity were being questioned. Our policies need change, not only to match new realities in the world but also to meet a new mood in America” (Nixon, Shaping a Durable Peace, 1973: 3). Nixon’s observations on the shifting US global role became particularly relevant in the post-Cold War era, three decades later. The rise of nationalist and inward-looking policies, epitomised by President Donald Trump’s ‘Make America Great Again’ démarche, reflected a renewed skepticism toward US global commitments. His policies, along with his return to the political stage, underscored the tensions between America’s global leadership roles and growing concerns about its relative US economic and political decline.

The transformation of US policy in the Indian Ocean reflects the relative decline of American hegemony in the region. While the US initially relied on military dominance—anchored by Diego Garcia as a critical logistics hub—shifts in global power dynamics have forced a strategic recalibration. The growing influence of China, the rise of regional naval powers, like India, and increasing challenges to unilateral US military presence, have made it difficult to sustain the same level of dominance. As a result, US policy has evolved from a posture of overwhelming military superiority to a more nuanced, cooperative, and regionally integrated approach, signalling a shift in its ability to unilaterally dictate security dynamics in the Indian Ocean. The Operation Desert Shield and Operation Desert Storm (1991) successfully expelled Iraqi forces from Kuwait but entangled the US in prolonged Middle Eastern conflicts. Similarly, Operation Enduring Freedom (2001) swiftly removed the Taliban from power in Kabul, yet the economic and human costs of maintaining a long-term presence in Afghanistan underscored the limitations of US military interventions in the post-Cold War historical context.

China’s Rise and Evolving

‘New Cold War’

China has taken on an increasingly proactive role in global diplomacy and economics, solidifying its position as a 21st-century superpower. This growing leadership is evident in major initiatives, like the Belt and Road Initiative (BRI) and the establishment of the Asian Infrastructure Investment Bank (AIIB), both of which expand China’s influence on the world stage. The Economist noted that “China’s decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform” (The Economist, 11 November 2014). Thus far, China’s ascent to global superpower status has been largely peaceful.

China’s influence is evident in its extensive investments in port infrastructure, maritime trade routes, and strategic partnerships under the Belt and Road Initiative (BRI). The United States sees this growing presence as a direct challenge to its global dominance, particularly as China deepens its economic entrenchment and modernises its military. US officials worry that dual-use facilities, an expanding naval footprint, and greater regional influence could undermine power projection, disrupt open sea lanes, and weaken allied security. In response, the US has intensified alliances, expanded security cooperation, and bolstered its military presence to counteract what it perceives as an erosion of its global primacy. As a result, the intensifying rivalry between China and the United States appears to be shaping the global strategic landscape in the 21st century.

The current Sino-US rivalry differs from the US-Soviet Cold War in several key aspects. Unlike the Soviet Union, which primarily contested US dominance in military and strategic spheres, China’s challenge to US hegemony is largely economic. This competition intensified during the Trump administration, particularly through the US-China trade war. Given the deep interdependence of global economic activities, US tariffs on Chinese goods have had repercussions for both countries, affecting Americans as much as Chinese producers and consumers.

Indian Ocean small states, such as Sri Lanka, do not necessarily perceive Chinese economic initiatives through a power-political lens. Instead, they assess these initiatives based on their own economic interests and the benefits they offer. Consequently, the US strategy used to counter the Soviet threat during the Cold War is unlikely to be effective in addressing the current challenge posed by China.

China’s progress in the Fourth Industrial Revolution (4IR) adds another dimension to US-China rivalry in trade and technology, digital geopolitics. In 2015, China initiated its ‘Made in China 2025’ plan, aimed at advancing high-tech manufacturing capabilities.The worldwide challenge of the dominance of US IT giants, including Google, Facebook, Amazon, and Microsoft by Chinese IT giants, such as Alibaba, Baidu, and Tencent of came forefront in digital geopolitics. The competition to develop 5G infrastructures, viewed by both powers as pivotal for enabling the next generation of digital application, has added a new dimension to their rivalry.

Artificial Intelligence (AI) is another critical frontier in UU-China competition. In March 2016, Google advanced machine-learning technology by integrating algorithms and reinforcement learning to process big data and enhance predictive capabilities. A year later, in July 2017, President Xi Jinping unveiled China’s ‘New Generation AI Development Plan,’ aiming to position China as the global leader in AI by 2030. The plan underscores the strategic advantage of exclusive technological control, allowing a nation to establish dominance before rivals can catch up (Pecotic, 2019). As Sri Lanka embarks on acquiring Digital Public Infrastructure (DPI), it must navigate the intensifying digital geopolitical rivalry among global tech giants. Countries like Sri Lanka, which have only recently begun acquiring Digital Public Infrastructure (DPI), must navigate carefully in the face of digital geopolitical rivalry among global powers such as China, India, and the United States.

Resurgence of Asia and the Asian Century

Another crucial development that signifies the global shift of power is the resurgence of Asia, driven by the strategic rise of China and India, along with the sustained economic growth of other key Asian economies, often referred to as the ‘Asian Tigers.’ This transformation has led to the widespread characterisation of the 21st century as the ‘Asian Century.’ The region’s rapid economic expansion, technological advancements, and growing geopolitical influence have reshaped global power dynamics, positioning Asia at the heart of international affairs. In 2019, the World Economic Forum declared, “We’ve entered the Asian Century, and there is no turning back” (World Economic Forum, 2019). This assertion reflects Asia’s role as the primary driver of global economic growth, trade, and innovation. With China and India leading the way, alongside the economic resilience of nations like Japan, South Korea, and the ASEAN bloc, Asia is not merely rising—it is redefining the global order.

In the Asian Century, the Indian Ocean has emerged as a pivotal geopolitical arena where the global balance of power is increasingly contested and reshaped. As major economic and military powers vie for influence in this strategically vital region, Sri Lanka’s geostrategic significance has grown exponentially. Positioned at the crossroads of key maritime trade routes connecting East and West, Sri Lanka occupies a central role in global politics, attracting the attention of global and regional powers alike.

Sri Lanka’s enhanced strategic relevance presents both opportunities and challenges. On the one hand, it allows the country to leverage its geographic advantage for economic development, foreign investment, and diplomatic engagement. On the other hand, it requires careful navigation of complex geopolitical dynamics to maintain strategic autonomy while balancing the competing interests of global powers. In this evolving landscape, Sri Lanka’s foreign policy choices will be instrumental in shaping not only its national trajectory but also broader regional stability in the Indian Ocean.

Pivot to Asia and Indo-Pacific Concept

The emergence of the Indo-Pacific strategic concept reflects the shifting global balance of power towards the Indian Ocean. In response to Asia’s rise, the US recalibrated its approach through the ‘Pivot to Asia’ and ‘Strategic Rebalancing’ under the Obama Administration. While Obama championed the Trans-Pacific Partnership (TPP) as a signature initiative, the Trump administration abandoned it in favour of the ‘Free and Open Indo-Pacific’ (FOIP) strategy. The Indo-Pacific Strategy Report of the US Department of Defence (2019) asserts: “The United States is a Pacific nation. Our ties to the Indo-Pacific are forged by history, and our future is inextricably linked… The past, present, and future of the United States are interwoven with the Indo-Pacific.” To align with this policy slant, the US Pacific Command (PACOM) renamed itself as the US Indo-Pacific Command (INDOPACOM) in May 2018.

In addition to the United States, India, Australia, and Japan are in the forefront in promoting the concept of Indo-Pacific. Since 2010, Indian political leaders and the strategic community have actively promoted the Indo-Pacific framework. It reinforces the strategic rationale behind India’s Look East, Act East policy and expands its maneuverability beyond the Indian Ocean, aligning with its aspirations as an emerging global power. Under the Indo-Pacific strategic framework, US-India defence relations have reached a new stage, with the INDUS-X, launched on June 20, 2023, to bring together US and Indian stakeholders, including research and academic institutions, industry leaders, startups, and investors, to accelerate and scale up commercial technologies with military applications.

Southeast Asia emerges as the centre of the strategic theatre in the Indo-Pacific strategic construct, while South Asia appears to be positioned further west. At first glance, this shift may suggest a reduced strategic focus on other small states in South Asia like Sri Lanka. In fact, the connectivity of the Pacific and Indian Oceans reinforces the strategic importance of the Indian Ocean, too. Rather than being sidelined, small South Asian states are positioned to benefit from the economic dynamism of Southeast and East Asia through the Indo-Pacific framework.

Sri Lanka remains strategically relevant despite a growing regional focus on Southeast Asia. Its central location ensures continued engagement from major regional and global powers. Sri Lanka’s engagement in Indo-Pacific security discourse, economic frameworks, and infrastructure initiatives will shape its ability to benefit from regional growth while balancing competing strategic interests. Strengthening regional connectivity, trade partnerships, and infrastructure development could unlock new economic opportunities. However, success will depend on Sri Lanka’s ability to navigate regional power dynamics while maintaining strategic autonomy. This highlights the critical role of foreign policy in securing the country’s interests. (To be continued)

by Gamini Keerawella