Sri Lanka seems to be caught in a storm in the troubled waters of the Indian Ocean as the United States and China lock horns on several fronts. With the US-China rivalry escalating in recent months, the Millennium Challenge Corporation (MCC) deal has put Sri Lanka in a Catch-22 situation: Damned if we sign the deal and damned if we don’t.
The MCC deal is a test from the United States to assess Sri Lanka’s so-called neutral foreign policy. It is not only the US, but India and other big players are also closely watching Sri Lanka. They are be disturbed by Sri Lanka’s recent policy decisions, besides the heavy presence of Chinese investments in Sri Lanka.
Though the MCC deal emerges as a campaign issue on an off, the real issue over the MCC deal is much more than its impact on the election outcome. It is hoped that the government’s foreign policy advisors must be assessing various options to navigate through the most dangerous foreign policy mine field the country is now going through.
It goes without saying that Sri Lanka is the most strategically located country in the Indian Ocean or even the whole of Asia. The government’s foreign policy advisors, it is hoped, must be preparing Plans A to Z to face the adverse consequences that will emerge whether the new government signs the MCC deal or decides to defer it on one excuse or another.
Certainly, the MCC deal is not stemming from Washington’s selfless motive to help out a country on the verge of bankruptcy and receive divine blessings to remain as the God’s chosen country to lead the world. If it is a charitable act, there are a plenty of developing and least developed countries that deserve the big bag of dollars much more than Sri Lanka, a middle income country. To assume there is free lunch in politics is sheer naivety.
A major concern for Sri Lanka should be the crocodile’s patience the US is exercising to lure Sri Lanka into grabbing the US$ 480 million bait under the MCC deal. Its patience in the face of widespread opposition to the MCC deal among Sri Lankans is not only astounding but also a sign of its resoluteness to achieve its objectives come what may. The US is also not naïve as not to know that rival powers Russia and China are working against the MCC and the US strategic objectives in Sri Lanka. In recent weeks and months, the signals Sri Lanka has been sending to India and Japan with regard to their development projects in Sri Lanka indicate the Gotabaya Rajapaksa government’s foreign policy shift from theoretical neutrality to practical slant in favour of China. Both India and Japan are members of an informal Indo-Pacific defence alliance known as the Quadrilateral Alliance or the Quad that also incorporates the US and Australia.
Sri Lanka could well be walking into a China trap if it ignores the geostrategic undercurrents in the region and the consequences of antagonizing big powers like the US, Japan and India. The US is Sri Lanka’s number one export market and it can through sanctions avenge itself if snubbed by Sri Lanka. The travel sanctions it imposed on Sri Lanka’s Army chief Shavendra Silva and his immediate family on allegations of human rights violations are seen to be a sign of retaliations to come if the MCC deal is spurned. Japan had been Sri Lanka’s all-weather friend and the largest donor since 1977 until China pushed it into the second place after the 2005 change of government in Sri Lanka. Of late, an assertive tone in Japan’s diplomatic language with regard to Sri Lanka has been conspicuous, especially following the government’s decision to suspend Japan’s flagship project to build a light rail transport system to ease Colombo’s traffic congestion.
"And this week, the US and India conducted a military exercise in the Indian Ocean with the US aircraft carrier USS Nimitz and its Carrier Strike Group joining four Indian warships to practise communications and air defence drills as part of a combined strategy to deal with military challenges in the Indo-Pacific region"
India has also reasons to worry about its diplomatic investment in the Rajapaksa government with which it hoped to revive or reset its relations following Rajapaksa’s sweeping election victory in November 2019. Sri Lanka needs to be mindful of India’s concern, for India staunchly believes -- as expounded by K.N. Panikkar in the 1940s -- that Sri Lanka is an irreplaceable part of India’s defence strategy.
India must surely be having many options on the drawing board to deal with the hostile presence of a rival world power in Sri Lanka, when its tolerance reaches the red line.
And this week, the US and India conducted a military exercise in the Indian Ocean with the US aircraft carrier USS Nimitz and its Carrier Strike Group joining four Indian warships to practise communications and air defence drills as part of a combined strategy to deal with military challenges in the Indo-Pacific region. This partnership was highlighted by US Defence Secretary Mark Esper and Secretary of State Mike Pompeo this week as they slammed China.
Addressing an online conference organised by the International Institute of Strategic Studies,US Esper said: “I want to highlight our increased defence cooperation with India, one of the all-important defence relationships of the 21st century.”
Pompeo urged India to focus on domestic supply chains and reduce its dependence on China for telecommunications and medical supplies. He was addressing a news conference in London with his counterpart Dominic Raab against the backdrop of Britain taking tough measures such as banning China’s Huawei Company from 5G technology projects and suspending the extradition treaty with Hong Kong.
Both Esper and Pompeo were critical of what they described as China’s bullying tactics with which it deprives other South China Sea nations of benefiting from the resources of the region.
Such rhetoric from top US officials indicates a major escalation in US-China hostilities. US-China relations have plummeted amidst an ongoing trade war, allegations regarding the coronavirus, espionage and US criticism of China’s human rights abuses in Hong Kong and Xinjiang. On Tuesday, the US gave China just three days to shut its Houston consulate office following allegations that China was involved in a major hacking operation to steal US secrets with regard to the Covid-19 vaccine research. China’s Communist Party organ Global Times slammed the allegations as crazy and political provocations linked to Donald Trump’s reelection efforts.
It is amidst such a major escalation that Sri Lanka has been compelled to sit on a powder keg.