Cat-And-Mouse Games & The Political Implications Of MR-Modi Meeting

By Rasika Jayakody –SEPTEMBER 12, 2018

Rasika Jayakody

China’s entry into the rural infrastructure and plantation sector in Sri Lanka is an indication of what the Asian superpower is becoming, or has already become, to Sri Lanka: a rich friend slowly buying you over by throwing money at your every problem.

In the first three years of this government, China’s involvement in Sri Lanka was confined to several mammoth development projects in Colombo and down south. China also acquired operations of the newly constructed port in Hambantota on a 99-year lease. Although China’s move to acquire Hambantota alarmed India, there wasn’t any explicit show of resentment by New Delhi, at least on diplomatic and political levels.

This year, however, China advanced into two other sectors in Sri Lanka – rural infrastructure development (in the North) and the plantation sector. It is no coincidence that Northern development and the plantation sector are two areas that India, China’s greatest contender in the region, is deeply sensitive about.

In April, state-run China Railway Beijing Engineering Group Co Ltd won a more than $300 million project bid to build 40,000 houses in Jaffna, with China’s Exim providing the financing. Although the project has been halted due to residents demanded brick houses instead of the concrete structures planned by the firm, China’s presence in Jaffna sent an alarming sign to India.

Then last month, China committed to investing US $30-40 million to assist Sri Lanka’s rubber industry – still a fraction of the overall investments planned for the plantation sector of Sri Lanka. Although unclear whether the investment will be limited to the rubber industry or if China will pump money into the tea industry as well, it is clear that China is eying Sri Lanka’s plantation sector and the Sri Lankan government is willingly holding the door open.

It is immaterial whether or not the current Sri Lankan government is deliberately playing the ‘China card’ against India. The reality is that the Sirisena-Wickremesinghe government – desperate to show some ‘results’ on the ground before an all-important Presidential election in 2020 – has limited options when it comes to financiers. And although the current government is described by the opposition as neo-liberal and exceedingly Western-oriented, the West has been of very little help in terms of FDIs and foreign aid. In China, they have found a lavish spender, willing to lead the government out of this perceived ‘lack of development’ before the next election, and in this, it seems, investment partners are chosen on a ‘first come -first served’ basis.

How is it that China has gained an edge over India? It has, in my opinion, something to do with the pace at which the two countries move on the investment decision making and delivery fronts. India has frustrated the Sri Lankan government more than once by taking too long to deliver results, whereas China has been quite consistent with delivery and with meeting the deadlines – deadlines which are, too often, tied to political realities. Therefore, with a crucial election around the corner, leaders of the government cannot see a better partner than in China, to prove ‘rapid development’ to their electorate. China, understandably, is using this increasing dependency on it, to position itself strategically in the Indian Ocean, right under the nose of India.

China’s growing presence in new areas of the Sri Lankan economy is a discomforting for India. But, how can India fight it? India is clearly no longer in any position to beat China on the aid front. The only possible way New Delhi can ‘counterbalance’ China’s growing influence in Sri Lanka is through political manoeuvring – in a cat-and-mouse game India and Sri Lanka have been playing for more than four decades now.

It is against this backdrop that former President Mahinda Rajapaksa was invited to New Delhi by his long-standing friend Subramanian Swamy, a BJP MP and the leader of the Virat Hindustan Sangam. The former Sri Lankan President’s presence in New Delhi has sparked a debate on if the Modi administration orchestrated the invitation extended by Swamy.

Rajapaksa, it must be pointed out, had a rocky relationship with India at the time he fell out of power in January, 2015. He even publicly accused the Indian intelligence agency of conspiring to topple his government. The dynamics, however, have shifted over the past three years and Rajapaksa’s proxy party, the Sri Lanka Podujana Peramuna, won the Local Government election earlier this year and have vowed to return to power at the next national election.

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