Features
Navigating the Dragon’s Den: Sri Lanka’s strategic balancing act ahead of President AKD’s visit to China
by Professor Chanaka Jayawardhena
President Anura Kumara Dissanayake is scheduled to embark on a state visit to China early next year, following his recent diplomatic success in India. As Sri Lanka rebuilds from the ashes of an economic meltdown, this visit will serve as a pivotal moment, shaping not just bilateral relations but also the island’s broader economic and geopolitical trajectory. While the allure of Chinese investments may offer short-term relief, the stakes are high: the decisions made during this visit could either cement Sri Lanka’s recovery or deepen its vulnerabilities.
The Economic Promise: Opportunity at the Doorstep
China’s economic might is undeniable. As the world’s second-largest economy and a leading investor in developing nations, China has demonstrated a remarkable ability to deploy vast sums of capital into infrastructure projects and industrial ventures. For Sri Lanka, a nation grappling with limited fiscal space, Chinese investment could unlock opportunities in critical sectors such as energy, transport, and manufacturing.
The Hambantota Port stands as a testament to the scope of Chinese involvement in Sri Lanka. Despite initial controversies, the port has emerged as a strategic hub, offering potential for revenue generation and job creation. However, the same cannot be said for the Mattala Rajapaksa International Airport, often dubbed the “world’s emptiest airport.” While envisioned as a key logistical and passenger hub, the airport has yet to realise its potential, serving as a reminder that infrastructure investments must align with realistic demand projections and comprehensive planning. Addressing this gap should be a priority during discussions with Chinese counterparts, ensuring that such projects contribute meaningfully to Sri Lanka’s economic landscape.
Additionally, enhanced trade relations with China offer significant upside. As Sri Lanka seeks to diversify its export portfolio, targeting China’s vast consumer base could invigorate key industries such as apparel, seafood, and tea. Establishing favourable trade agreements during this visit could pave the way for sustainable economic growth, moving beyond aid and debt reliance.
The Geopolitical Tightrope
The geopolitical stakes for Sri Lanka are both immense and intricate, requiring delicate balancing between its key regional partner, India, and the opportunities presented by China. India remains Sri Lanka’s closest neighbour and has historically shared deep cultural, economic, and security ties with the island nation. India’s contributions during Sri Lanka’s economic crisis, including emergency financial aid, are a testament to its enduring commitment. However, India also views any expansion of Chinese influence in Sri Lanka with heightened concern, perceiving it as a potential security threat within its sphere of influence in the Indian Ocean region.
President Dissanayake must walk a fine line during his visit to China, ensuring that the agreements forged do not alienate India or exacerbate regional tensions. While pursuing Chinese investments, Sri Lanka must communicate its intentions transparently to India, emphasising that its engagement with China is rooted in economic pragmatism rather than any geopolitical alignment. Joint initiatives with India, such as collaborations in regional trade and maritime security, can serve as confidence-building measures to assuage Indian apprehensions.
China, on the other hand, presents unparalleled economic opportunities. Investments in infrastructure, manufacturing, and renewable energy could provide Sri Lanka with a much-needed economic boost. However, Sri Lanka’s leadership must remain vigilant to avoid the pitfalls of overdependence on China, as evidenced by the debt crises faced by other nations engaged in the Belt and Road Initiative. The priority must be projects that not only bolster the local economy but also preserve national sovereignty.
To emulate the success of nations like Vietnam, Sri Lanka can adopt a “bamboo foreign policy”—firmly rooted in its national interests yet flexible in adapting to the complexities of great power politics. Vietnam’s ability to maintain economic ties with China while cultivating strategic partnerships with the United States, Japan, and ASEAN countries offers a valuable model. Sri Lanka, too, must engage other global players, ensuring a diversified set of partnerships that prevent over-reliance on any single nation.
Moreover, Sri Lanka’s policymakers must focus on ensuring that the benefits of Chinese investments accrue to Sri Lanka itself, rather than serving external strategic interests. This includes rigorous scrutiny of project proposals, transparent procurement processes, and an unwavering commitment to prioritising projects that yield tangible economic returns for the Sri Lankan people.
The challenge lies in balancing these dynamics while maintaining Sri Lanka’s sovereignty. A comprehensive, long-term vision that places Sri Lanka’s national interests at the forefront is essential. Investments should align with the country’s development goals, fostering economic resilience and reducing external vulnerabilities. Ultimately, the success of this balancing act will determine whether Sri Lanka can emerge as a stable and independent player in the region or remain a pawn in the larger geopolitical chessboard.
Potential Pitfalls: Lessons from the Region
Sri Lanka’s impending engagement with China is fraught with risks, many of which have been experienced by other nations. Laos, for instance, has faced severe debt distress due to over-reliance on Chinese loans for infrastructure projects under the BRI. Similarly, Zambia’s excessive borrowing from China has resulted in contentious renegotiations and fears of asset seizures. These examples underscore the importance of scrutinising loan terms and prioritising projects that deliver tangible economic returns.
Another potential pitfall is the erosion of sovereignty. Nations that over depend on Chinese investments often find themselves compromising on key policy decisions, whether in trade, security, or governance. Sri Lanka’s leadership must ensure that economic agreements do not come at the expense of national autonomy.
Moreover, transparency is critical. Corruption in procurement processes and project implementation has plagued many BRI initiatives, undermining public trust and long-term viability. President Dissanayake’s government, which has earned public confidence for its anti-corruption stance, must maintain rigorous oversight over any agreements signed during this visit.
Charting a Vision for the Future
While the immediate focus of President Dissanayake’s visit will likely centre on securing economic investments, the government must adopt a comprehensive vision that extends beyond short-term gains. This vision should encompass three key pillars:
=Economic Sustainability:
Sri Lanka must prioritise investments that align with its long-term development goals. This includes focusing on renewable energy projects that reduce reliance on fossil fuels, thereby lowering energy costs and improving environmental outcomes. Digital infrastructure development, such as expanding broadband access, can drive innovation and attract high-value industries, while skill development initiatives can prepare Sri Lanka’s workforce for the demands of a modern economy. By diversifying its economic base, Sri Lanka can reduce its vulnerability to global economic shocks and ensure sustainable growth.
=Geopolitical Balance:
As Sri Lanka engages with China, it must simultaneously deepen partnerships with other nations, including India, our immediate neighbours in the SAARC region and the rest of both the western world along with the global south. Strengthening ties with India, its closest neighbour, ensures regional security and cooperation, while partnerships with any country with the means can provide access to alternative sources of investment and technology. A multilateral approach will mitigate the risks of over-dependence on any single nation and enhance Sri Lanka’s global standing. By actively participating in regional forums and initiatives, Sri Lanka can position itself as a bridge between competing powers, leveraging its strategic location to attract diverse opportunities.
=Social Cohesion:
The benefits of Chinese investments must be equitably distributed to avoid exacerbating social inequalities. Infrastructure projects should include components that directly impact local communities, such as job creation and skill development programmes.
Transparent planning and community engagement are essential to ensure that large-scale projects do not displace vulnerable populations or create environmental degradation. By fostering inclusivity and addressing the needs of all segments of society, the government can build public trust and strengthen social stability, which is vital for long-term development.
A Positive Path Forward
President Dissanayake’s forthcoming visit to China represents both a challenge and an opportunity. By adopting a cautious yet ambitious approach, Sri Lanka can harness the economic potential of Chinese investments while safeguarding its sovereignty and geopolitical balance. The lessons from countries like Vietnam, Laos, and Zambia serve as valuable guideposts, highlighting both the promise and perils of engagement with global powers.
Sri Lanka’s recovery journey is far from over, but the foundations for a brighter future are being laid. The government’s ability to navigate this complex landscape with transparency, vision, and pragmatism will determine whether the nation can emerge stronger, more resilient, and truly independent. As the president steps into the dragon’s den, the world will be watching—and so will the people of Sri Lanka.
(Views expressed in this article are personal.)
(The writer is Professor of (Chair) of Marketing, University of Surrey, UK. Linkedin: https://uk.linkedin.com/in/marketingchanaka, Email: Chanaka.j@gmail.com
Features
Trump’s tariffs, AKD’s gazette and Sri Lanka’s diplomatic slumber
“We are rather respectable in Colombo. We go to bed fairly early, and we remain there till morning. “
According to Sri Lanka’s diplomatic folklore, the late S.W. R. D. Bandaranaike uttered these words while explaining the reasons for Sri Lanka’s abstention on the UN resolution condemning the Soviet invasion of Hungary. Apparently, SWRD’s foreign ministry officials were asleep at home when the diplomatic cable seeking instructions was received from New York. In those days, there were no cell phones, Internet, or even fax or telex machines. The diplomatic cables were sent through post offices. Decoding them was a slow and time-consuming process. Thus, the government could not provide appropriate instructions to our mission in New York in time, and the Sri Lankan delegation abstained on that sensitive UN vote.
Sri Lanka’s Absence from Section 301 Consultations
But then, how does one explain Sri Lanka’s absence from the crucial bilateral consultation held in Washington by the Office of the United States Trade Representative (USTR) during March-April on “Forced Labour” under the Section 301 of the US Trade Act of 1974? Didn’t our foreign and trade ministries send appropriate instructions to Washington in time? Even if the instructions from the foreign ministry were transmitted to our embassy in Washington by pigeon carriers, there was enough time for Sri Lanka to participate in those meetings.
In March, the USTR initiated these 301 investigations on 60 trading partners, and invited all of them for confidential consultations. Out of the 60, 46 participated in these consultations. Sri Lanka was not one of them. Other countries that didn’t participate in these consultations included China, Russia, and Venezuela! In addition to that, the Section 301 Committee conducted a public hearing with interested parties on April 28 and 29. Washington-based diplomats, representatives from few trade ministries as well as representatives from many foreign trade associations and chambers participated in these hearings. Sri Lanka was once again conspicuously absent.
As a result, when the USTR published the proposed forced labour tariffs on June 2nd, Sri Lanka ended up with a 12.5% duty. Pakistani and Indonesian diplomats participated in these consultations and took appropriate follow-up measures, and managed to enter the 10% duty category. As even a threat of a modest tariff hike could disrupt supply chains and reduce competitiveness, particularly in an industry such as garments, I discussed this issue on 15 June and underscored the importance of Sri Lanka’s participation at the next hearing, which was scheduled to be held from July 7th .
Awakening from Diplomatic Slumber and AKD’s Gazette
Fortunately, Sri Lanka finally awoke from weeks of diplomatic slumber, and Ambassador Mahinda Samarasinghe participated in the public hearing on 9 July, and promised, “…. · We have agreed to the text in our negotiations with the USTR on forced labour, …. The gazette as we speak is being printed and I’m getting the gazette tomorrow morning, and the gazette will be shared with USTR as I get it“.
As promised, President Anura Kumara Dissanayake issued a gazette on 10 July banning the imports of goods produced by forced labour. These new regulations are very similar to what Pakistan and Indonesia enacted in April, after their consultations with USTR in March. Why couldn’t we do it in April? Why did we wait till the very last minute?
Challenges ahead
“War is too important to be left to generals alone,” is a famous saying attributed to former French Premier Georges Clemenceau. Similarly, monitoring our main markets is too important to be left to diplomats alone. The United States is the largest single-country market for Sri Lanka. Therefore, Sri Lankan trade chambers and associations should become more proactive in these markets and participate in these events. For example, the chairman of the Pakistani apparel exporters association participated in the April hearings. Similarly, representatives from the Indian Agricultural and Processed Food Products Export Development Authority, the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, and Reliance Industries also participated in July hearings. At an event where each speaker is given only five minutes (strictly enforced), having a number of speakers from a country is an advantage. The presence of industry representatives in these kinds of events also help them understand the market dynamics and the future challenges. This is important, particularly because there will be many more challenges with Trump’s tariffs.
With the gazette issued on 10 July, Sri Lanka has imposed a prohibition on the importation of goods produced with forced labour. Now, the challenge will be to effectively enforce the prohibition. And what are the goods produced with forced labour? The USTR list only focuses on aluminum, cotton, electronics, lithium-ion batteries, rice, and tobacco. However, according to the U.S. Department of Labour, the list is much longer. Hence, this list may change continuously during the next two years and tariffs may fluctuate once again.
So, this is definitely not the time to slumber.
(The writer, a retired public servant, can be reached at senadhiragomi@gmail.com)
by Gomi Senadhira ✍️
Features
Tales of Mystery and Suspense 10 Casino for Sale
After the overwhelming grotesquerie of J K Rowling’s latest Cormoran Strike novel (written, I should have noted, as the others were, under the pseudonym Robert Galbraith), I thought I should return to the world of fun, and also a much shorter description since this thriller moves quickly without the layers of detail that Rowling engages in.
I then move to the second comic thriller by Caryl Brahms and S J Simon. This, their second story to feature Vladimir Stroganoff and Adam Quill, was Casino for Sale, as lunatic a romp as the first, though without the emphasis on the ballet that characterized A Bullet in the Ballet.
This one begins with the impresario Stroganoff buying a casino cheap from Baron Sam de Rabinovich, only to find that it was a rundown place, not the grand casino of La Bazouche, a resort on the Frenc+h Riviera, as he had initially thought. The grand one belonged to Lord Buttonhooke, and Stroganoff could not compete, until he thought of bringing the Ballet Stroganoff to the casino – which of course leads to Buttonhooke deciding to have ballet performances in his Casino too.
Stroganoff invites Quill to visit him, which Quill decides to do since he has left Scotland Yard, having come into a legacy. No one believes this, and he has to face questions as to what he did to have been sacked, with sympathy for having been found out.
The day he arrives in La Bazouche there is a murder, of a vitriolic critic called Citrolo, in Stroganoff’s office. He had been going to write a damning review of the opening night of the ballet and Stroganoff, when he realizes Citrolo cannot be swayed, drugs him and dictates the review himself to the papers. He leaves Citrolo sleeping and finds him shot the next morning, whereupon he decides to muddy the waters and leave a suicide note and lots of other murder weapons. So much overkill, as it were, of course ensures that he is arrested.
But the excitable French detective who makes the arrest follows up his suggestion that Buttonhooke was also involved, and so the two casino owners find themselves in cells next door to each other, with the detective Gustave quite happy to provide creature comforts for a fee.
Quill decides he must investigate, and finds Gustave most cooperative, since he has a laid back attitude to work. So it is Quill that finds a notebook which makes it clear Citrolo is an accomplished blackmailer, and that there are lots of possible murderers, including Stroganoff’s croupier, who was crooked, Rabinovich, who was now working for Buttonhooke, a confidence trickster called Kurt Kukumber, whose prospectus for a dud gold mine was found in the office and Prince Alexis Artishok who was engaged in a deal to buy diamonds from the ballerina Dyra Dyrakova.
Stroganoff had been trying to get Dyrakova to dance for him, but having done so previously she had refused. But then to Stroganoff’s chagrin she agreed to dance for Buttonhooke. The clearly crooked Artishok had told Buttonhooke’s mistress Sadie Souse, who was not very bright, that Dyrakova possessed diamonds she was willing to sell cheap, and Sadie was determined to have them.
Quill meanwhile finds out that there was a secret passage to Stroganoff’s office, the obvious solution to what had begun as a locked room mystery, and that this was known by almost everyone apart from Stroganoff himself. And then Rabinovich is murdered, just after Gustave had released his two original suspects, leading him to blame Quill for having insisted on that and thus allowing them to kill again.
Soon afterwards Dyrakova arrives, and the town is full of posters announcing that she will appear in the casinos, elaborate posters for either one, since Stroganoff is determined that she will dance for him, and if she does not come willingly, he has devised a scheme to make her do so unwillingly. So, though Buttonhooke has her taken off to his yacht immediately she arrives at the station, Quill along with Arenskaya gets her into a launch and to Stroganoff’s casino, where she performs to tumultuous applause, not knowing for whom she is dancing.
When Quill asked her about the diamonds, she said she had sold them long ago, and that gave Quill the solution to the mystery. Rabinovich had known about this, and Artishok had killed him to prevent Sadie learning it from him, he had killed Citrolo who had recognized him for an accomplished card sharper, not a Russian prince at all. But before he is arrested, he gets away in a boat, and the police launch that pursues him is on the point of catching him up when it runs out of petrol.
Again, lots of excitement, and entertaining references – Gustave grows marrows – and if not quite as brilliant as its predecessor, Casino was certainly a delightful read.
Features
The challenge of being positive about SAARC
It was a few years back that a former President of Sri Lanka took it on himself to pronounce SAARC ‘dead’. Since then there have been other sections of Sri Lankan opinion that have joined the critics of SAARC and taken the solemn stance that SAARC has indeed died what may be called a natural death.
Their fatalism is understandable. SAARC has failed to meet at heads of government or state level for the past several years to take the SAARC process notably forward. Regional cooperation has more or less been only an appealing idea. No substantive concrete projects have taken off to make the idea a hard reality. ‘Inner paralysis’ seems to be SAARC’s lot. Hence the fatalism in these circles.
However, being one of the worst cash-strapped regions of the world and a teemingly populated one with people virtually left to their devices, what choices do the ‘SAARC Eight’ have other than to try their best to band together and continue with their cooperation efforts, however small they may be?
There is no escaping the mounting debt trap for many of these countries and bankrupt Sri Lanka is a glaring example, but ‘throwing in the towel’ and abandoning themselves entirely to the diktats of the strongest economies and their agencies will prove a ‘living death’ for many countries in the SAARC fold.
The gains may be meagre but giving-up on SAARC cooperation in full would prove self-defeating for the organization and South Asia. Right now, the collective intention ought to be to salvage what the region could from the tenuous cooperative efforts. Moreover, such initiatives could go some distance to generate a degree of goodwill among the Eight and help in sustaining a dialogue process.
Given this backdrop it proved ‘a stich in time’ for the Regional Centre for Strategic Studies (RCSS), Colombo, to recently host the SAARC Secretary General Ambassador Md. Golam Sarwar to a round table discussion on the unifying potential of SAARC and its future possibilities, besides other related issue areas.
Held on June 24th and moderated by RCSS Executive Director and former ambassador Ravinatha Aryasinha, the forum brought together a vibrant, wide ranging audience comprising academicians, diplomats, senior public servants, civil society activists and many others. Following the presentation by Ambassador Golam Sarwar titled, ‘Reigniting SAARC: Achievements, Challenges and the Way Ahead’, a lively Q&A followed.
The above forum could be described as an act of lighting the proverbial ‘candle’ rather than ‘cursing the darkness.’ It surely is a ‘darkness’ that could be seen as daunting considering that the region’s pivotal powers, India and Pakistan, are failing to act in a spirit of accord but are engaged in bitter finger-pointing on a number of questions of vital importance to SAARC.
On the other hand, what is the rest of the region doing to bring the above sides together? It is disappointing that to date the rest of SAARC has failed to launch a major diplomatic drive to bring peace between the feuding regional heavyweights. It needs to act without delay and establish its earnestness and this effort would need to prove SAARC’s staying power in the unfolding months and even years.
In assessing SAARC’s seeming failure local opinion in particular has failed to factor in what could be described as weak leadership. Since Sheikh Mujibur Rahman of Bangladesh, the founding father of SAARC, the region has failed to produce a visionary leader who could advance the SAARC cause with charisma and drive.
Among other reasons, weak leadership accounts considerably for the faltering and stuttering status, as it were, of SAARC. Badly needed are leaders who could go the extra mile, think less of narrow national interests and work diligently towards the collective well being of the region but SAARC’s millions of ordinary people have been made to wait in vain for leaders of such stature. Instead, they have been burdened with politicians who seem to be relishing the apparently moribund state of SAARC.
Looking back, it could be said that it was the dynamic leadership factor that led to the launching of the Non-Aligned Movement and for its sustenance for a few decades. True, it could be seen in some quarters that NAM is no more, but as in the case of SAARC, the former too has been unfortunate to be burdened over the years with politicians who lack the vision and drive to unflaggingly advance the fortunes of the South. NAM and SAARC lack the dynamism and vision of leaders of the stature of Jawaharlal Nehru, for example, to give them the required guidance and intellectual depth.
The reasons are complex for there not being among us currently political leaders with the vision and the steadfast commitment to advance the legitimate interests of the South. However, it could be stated with conviction that the majority of Southern leaders have too easily caved in to the demands of the global North and its financial agencies.
These leaders have failed to see, for instance, that the largely market economy oriented Northern governments would not view with favour a centrist economic model that attaches priority to the interests of the dis-empowered publics of the South. This realization ought to have dawned on the current government in Sri Lanka, for instance, some while ago but it has no choice but to abide by IMF dictates since economic survival at present is unthinkable without the latter’s succour.
Accordingly for SAARC this should be the time for some soul-searching. Priority needs to be attached to ending the feuding between India and Pakistan since at present the material fortunes of the region hinge largely on these regional giants giving peaceful relations among them a try. This is no easy challenge to meet but some daring, visionary diplomacy needs to take hold among the rest of SAARC.
There is some sense in SAARC bringing the peoples of the region together through programs that address their best collective interests. A meeting of minds among SAARC nations could enable SAARC and its agencies to build a region-wide people’s movement for progressive political and economic change that could in turn lead to the region’s political leaders sensitizing themselves more to the neglected needs of their publics.
However, the time is ‘now’ for the initiation of these progressive changes and the voice of SAARC well wishers would need to drown out those of their critics.
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