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China using Lanka’s indebtedness to show military muscle

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By Saibal Dasgupta

China has dispatched a military ship to Sri Lanka’s port city of Hambantota in the midst of the rapidly changing political situation in the island nation. The move has raised questions about whether China is trying to establish a strong military presence on Sri Lanka’s Indian Ocean coast.China’s People’s Liberation Army describes the vessel, Yuan Wang 5, as a survey ship, meant to conduct research in the Indian Ocean. But analysts are asking whether the ship, due to arrive in Hambantota on Aug. 11 and packed with sophisticated electronics for space and satellite tracking, is meant to serve a strategic purpose.

“China’s goal is to put the Hambantota port to dual use, commercial and military. It is trying to build the capability to move and maneuver ships at the port with a military purpose,” Dayan Jayatilleka, a former Sri Lankan diplomat, told VOA.

China has some say about using the port because the Sri Lankan government handed it over to Chinese companies on a 99-year lease in 2017. Colombo was forced to give up control of the port after it failed to repay Chinese loans used to build it.

Sri Lanka’s recently ousted president, Gotabaya Rajapaksa, is believed to have given his consent to berthing the vessel at the Sri Lankan port. The new government that replaced him after a massive protest movement is unlikely to revoke the decision and stop the vessel from using the port.

“Sri Lanka needs financial assistance, and it would not want to displease China by revoking the permission,” Jehan Perera, executive director of the National Peace Council of Sri Lanka, told VOA.

“China’s purpose is to make sure its military ships have easy access to the Sri Lankan port. As long as this goal is met, it has no need to actually build a military base,” said K.P. Fabian, a former deputy high commissioner of India to Sri Lanka.

Sri Lanka is seeking a bailout loan from the International Monetary Fund (IMF). IMF rules stipulate that a loan-seeking country should reschedule the payment timetable of past debt in order to qualify.

China has refused Sri Lanka’s request to reschedule project loans amounting to nearly $10 billion that have fallen due. Without China’s cooperation, Colombo would be unable to obtain IMF financing and sink deeper into a financial mire.

“[The] Sri Lankan government is hopeful Beijing will come around and accept the request. It also wants a currency swap arrangement to buy Chinese goods,” Perera said.

Sri Lanka is almost without foreign exchange reserves and facing higher world oil prices, which has resulted in a serious energy shortage. The country is also facing a food crisis with millions of people without jobs.

It is possible that China might try to use its influence as a lender to pressure Sri Lanka to allow the creation of Chinese military facilities, which could be used to target China’s rival, India.

“For India, it is a matter that is causing serious concern. China has been trying to create military challenges for India, and this is one such effort,” said Fabian.

A move to establish a Chinese military presence in Sri Lanka will cause concern not only in India but also in other parts of the world because Indian Ocean sea routes connect Asia and Europe.Sri Lanka’s economic crisis was caused by heavy foreign borrowing, which has left it with a huge burden of debt. Sri Lanka’s foreign debt as a percentage of its gross domestic product (GDP) jumped from 80% in 2015 to 101% in 2020, according to government estimates. The total foreign debt now stands at $51 billion.

China launched a series of infrastructure projects in Sri Lanka under its Belt and Road Initiative, including the port and an airport that were bankrolled by Chinese banks.The island nation soon found itself unable to service the Chinese debt. Beijing used the opportunity to force Sri Lanka in 2017 to give the Hambantota port on a lease of 99 years to Chinese companies that built and financed it.

“The U.S. government is correct when it says that Chinese projects and loans are very non-transparent and overpriced,” Perera said. “Chinese forays in Sri Lanka had a corrupting influence because they encouraged local politicians and officials to pilfer funds.”

Earlier, USAID Administrator Samantha Power said that China has financed infrastructure projects in Sri Lanka that often served little practical purpose.

“Indeed, over the past two decades, China became one of Sri Lanka’s biggest creditors, offering often opaque loan deals at higher interest rates than other lenders, and financing a raft of headline-grabbing infrastructure projects with often questionable practical use for Sri Lankans,” Power said. (VoA)



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Coal scandal: Govt. urged to release lab report

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Pubudu Jagoda

The government is under mounting pressure to release a foreign laboratory report on the controversial coal consignment imported for the Lakvijaya Power Plant, with the Frontline Socialist Party (FSP) accusing the authorities of political interference and tender manipulation.

Speaking to the media after a party meeting in Homagama yesterday, FSP Education Secretary Pubudu Jagoda demanded an immediate explanation for the delay in disclosing the report from a Dutch laboratory, Cotecna, which was commissioned to test samples of the coal stocks in question after doubts were raised about an earlier local laboratory assessment. Jagoda said Cabinet media spokesperson Dr. Nalinda Jayatissa had announced that the report would be submitted by 16 January, but it had yet to be made public.

“The Sri Lankan lab confirmed the coal was substandard and could damage both the environment and power plant machinery. The foreign lab has independently verified the same results, we are told. Yet, political pressure appears to be delaying the release of the report.” He warned that any attempt to issue a false report would eventually be exposed and urged the government and the laboratory to maintain transparency.

SLPP MP D.V. Chanaka told Parliament last week that while 107 metric tonnes of coal were normally required per hour to generate 300 megawatts, but as many as 120 tonnes of newly imported coal were needed to produce the same amount of power due to its lower calorific value. Tests showed the first two shipments had calorific values of 5,600–5,800 kcal/kg, below the required minimum of 5,900 kcal/kg, said.

Jagoda accused the government of tailoring procurement rules to benefit an Indian supplier, citing a drastic reduction in reserve requirements—from one million metric tonnes in 2021 to just 100,000 tonnes in 2025—and alleged previous irregularities by the company, including a 2016 Auditor General finding regarding a rice supply contract and the 2019 suspension of a key agent of the company by the International Cricket Council over match-fixing.

He further criticised systemic manipulation of the coal tender process, including delays in issuing the tender from the usual February-March window to July, and progressively shortening the submission period from six weeks to three, giving an advantage to suppliers with stock on hand.

The Ministry of Energy recently issued an amended tender for 4.5 million metric tonnes of coal for the 2025/26 and 2026/27 periods, following the cancellation of an earlier tender. Jagoda warned that procurement delays and irregularities could trigger coal shortages, higher spot-market purchases, increased electricity costs, and potential power cuts if hydropower falls short.

Jagoda called for urgent investigations into the procurement process, insisting that any mismanagement or corruption should not be passed on to the public.Denying any wrongdoing, the government has said it is waiting for the lab report.

by Saman Indrajith ✍️

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Greenland dispute has compelled Europe to acknowledge US terrorising world with tariffs – CPSL

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Dr Weerasinghe

The Communist Party of Sri Lanka yesterday (18) alleged that the US was terrorising countries with unfair tariffs to compel them to align with its bigot policies.

CPSL General Secretary Dr. G. Weerasinghe said so responding to The Island query regarding European countries being threatened with fresh tariffs over their opposition to proposed US take-over of autonomous Danish territory Greenland.

US President Donald Trump has declared a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland with effect from 1 February but could later rise to 25% – and would last until a deal was reached. Targeted countries have condemned the US move.

Dr. Weerasinghe pointed out that none of the above-mentioned countries found fault with the US imposing taxes on countries doing trade with Russia and Iran. Now that they, too, had been targeted with similar US tactics, the CP official said, underscoring the pivotal importance of the world taking a stand against Trump’s behaviour.

Referring to the coverage of the Greenland developments, Dr. Weerasinghe said that news agencies quoted UK Prime Minister Keir Starmer as having said that the move was “completely wrong”, while French President Emmanuel Macron called it “unacceptable.

Dr. Weerasinghe said that Sri Lanka, still struggling to cope up with the post-Aragalaya economic crisis was also the target of discriminating US tariff policy. The top CPSL spokesman said that the recent US declaration of an immediate 25% increase in tariff on imports from countries doing business with Iran revealed the prejudiced nature of the US strategy. “Iran is one of our trading partners as well as the US. Threat of US tariffs on smaller countries is nothing but terrorism,” Dr. Weerasinghe said, stressing the urgent need for the issue at hand to be taken up at the UN.

Responding to another query, Dr. Weerasinghe cited the US targeting India over the latter’s trade with Russia as a case in point. He was commenting on the recent reports on India’s Reliance Industries and state-owned refiners sharply cutting crude oil imports from Russia. The CPSL official said that the EU wouldn’t have even bothered to examine the legitimacy of US tariff action if they hadn’t been targeted by the same action.

Perhaps, those who now complain of US threats over the dispute regarding Greenland’s future owed the world an explanation, Dr. Weerasinghe said. The reportage of the abduction of Venezuela’s President and the first lady underscored that the US intervened because it couldn’t bear the Maduro administration doing trade with China and other countries considered hostile to them, Dr. Weerasinghe said.

The CPSL official said that the NPP couldn’t turn a blind eye to what was happening. Just praising the US wouldn’t do Sri Lanka any good, he said, adding that the Greenland development underscored that the US under Trump was not concerned about the well-being of any other country but pursued an utterly one-sided strategy.

The US dealings with the NPP government, particularly the defence MoU should be examined taking into consideration US tariffs imposed on Sri Lanka at the onset of the second Trump administration and ongoing talks with the US, Dr. Weerasinghe.

By Shamindra Ferdinando ✍️

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MPs’ Pension Repeal Bill challenged in Supreme Court

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 Two petitions have been filed before the Supreme Court challenging the constitutionality of the proposed Parliamentary Pensions (Repeal) Bill, which seeks to scrap pensions for legislators.

The Bill, presented to Parliament on 7 January by the Minister of Justice and National Integration, has drawn strong opposition from retired parliamentarians who argue that it undermines the rights of former lawmakers and their dependents.

One petition has been filed by former MPs M. M. Premasiri, Nawarathne Banda, Nishantha Deepal Gunasekara, and Saman Siri Herath, who served in Parliament from 2004 to 2010. The other petition is by former MPs Piyasoma Upali (1988–2004) and Upali Sarath Danstan Amarasiri (1988–2000).

The petitioners argue that former MPs, many of whom dedicated decades of service to the nation, often sacrificed careers and business prospects for public duty. They contend that retired MPs and some widows rely solely on their pensions, which range between Rs. 60,000 and Rs. 80,000, amounts they say are insufficient to cover basic living and medical expenses.

The petitions seek a declaration that the Bill requires approval by the people through a referendum and a two-thirds majority in Parliament, citing constitutional safeguards.

The petitions were filed through Attorney-at-Law Sanath Wijewardane and are to be supported by Dr. Wijeyadasa Rajapakshe PC.

 By AJA Abeynayake ✍️

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