 The Sri Lankan government is all set to take a balanced approach in its foreign interactions. How well will it turn out for India and China, both vying for economic ties with this neighbor? After Sri Lankan President Mohinda Rajapakse's win for a second presidential term in January 2010, India has intensified its efforts to strengthen its relations with the island nation to counter the growing influence of China. Commenting on President Rajapakse's policy towards India and China during his second term, Indian analyst, Kasun Ubayasiri, wrote in the Times of India (January 2010): ‘While it is unlikely Sri Lanka will actively alienate its northern neighbor, it is equally unlikely that the Rajapakse government will continue to woo India in the future, particularly if its alliance with China bears fruit.' Sri Lankan analyst Deepal Jayasekera in his article published in TransCurrents on February 3, 2010, observed that China's growing influence in Sri Lanka is viewed by India as a threat ‘to its interest in what it regards as part of its sphere of influence.' Indian Foreign Secretary, Nirupama Rao, visited Sri Lanka on March 6, 2010. During her meeting with President Rajapakse she conveyed Indian government's hope for strengthening of future bilateral relations between India and Sri Lanka.
India has already announced Rs. 500 million (U.S. $ 100 million) as post-war financial aid to Sri Lanka for the rehabilitation plan for the 300,000 internally displaced people in Sri Lanka and is also involved in various infrastructure projects, including railway lines in Sri Lanka's north and the Palai airport and Kankesanthurai port in Jaffna peninsula. India has also proposed to set up an Indian Consulate in Jaffna. India is interested in developing relations with the Tamil community in the northern part of Sri Lanka. China, on the other hand, has committed U.S. $35 million as post-war financial aid to Sri Lanka and is involved in development projects worth U.S. $6 billion.
President Rajapakse, during his first term from 2005-2009, as part of his strategy to defeat the LTTE and also to counter Western and Indian pressures for resumption of peace talks with the LTTE, opted to broaden Sri Lanka's bilateral political and economic interactions with countries outside Western influence. Sri Lankan Foreign Secretary, Dr. Palitha Kohana in an interview to BBC News in May 2009 remarked: ‘Sri Lanka confronted with the choice of economic blackmail or finding an accommodation with terrorism, had to strengthen its ties with alternative partners.' When in 2006 President Rajapakse launched military offensive against the LTTE in order to contain the civil war by Tamils in Sri Lanka, the U.S. and European countries opposed his policy and suspended military and economic aid to Sri Lanka. China increased its economic and military aid to Sri Lanka. Indian government was also reluctant to support Sri Lankan government's strategy against the LTTE because of the pressure from Indian Tamils. However, India also opposed Chinese military assistance to Sri Lanka. Expressing concern over China's military assistance Indian National Security Advisor, M. Narayanan said in 2007, ‘We (India) are a big power in the region. We don't want the Sri Lankan government to go to Pakistan or China. Whatever may be their requirement, the Sri Lankan government should come to us.' As reported by Jane's Defence Weekly, Sri Lanka in April 2007 signed a U.S. $37.6 million agreement for purchasing Chinese ammunition and ordnance for its army and navy. According to the Stockholm International Peace Research Institute, in 2008 China gave six F7 jet fighters-probably free of cost- to Sri Lanka. At multilateral level, in the UNSC China blocked moves against Sri Lankan government's military strategy against LTTE.
Sri Lanka-China has had cordial relations since 1950s. Besides bilateral exchanges of high level visits and cooperation in multilateral issues, Sri Lanka and China are cooperating in areas of trade, development assistance, military assistance, education, culture, science and technology. Trade between the two countries has been expanding steadily. By 2008 China emerged as the third largest importer of Sri Lanka after India and Singapore. There is also a noticeable increase in aid and commercial investment by China in Sri Lanka. During 2006-2008 Chinese aid to Sri Lanka increased fivefold and China emerged as the largest donor to Sri Lanka replacing Japan. China is also investing in various development projects in Sri Lanka, important ones being - the Hambantota Port Development Project; the Norochcholai Coal Power Plant Project; the Colombo-Katunayke Expressway; and the National Performing Arts Theatre.
The Hambantota Port Development Project, strategically significant project in the south of Sri Lanka is worth U.S. $ 1 billion. Its construction began in 2008 and would be completed in fourteen years. When completed it would be three times bigger than the Colombo port. It is designed to be a service and industrial port and can also be developed into a major transhipment port. It is meant to provide bunkering and refueling facilities, liquefied natural gas, refinery, aviation fuel storage facilities, bonded export processing zone and dry docks. Hambantota, when completed would be an important transit point for ships and tankers moving through the Red Sea, Persian Gulf, Malacca Straits and the Ports of Gwadar (Pakistan) and Sitwe (Myanmar). Officially China has stressed that the port is only a commercial project. Highlighting strategic importance of the port for China Sri Lankan analyst, Sergei De Silva Ranasinghe in his article published in The Diplomat in October 2009, says China ‘views Sri Lanka as a strategically vital gateway for securing access to shipping arterials in the Indian Ocean.' For Sri Lanka the port has strategic importance. According to Dr. Priyah Bandu Wickrama, Chairman Sri Lankan Port Authority: ‘Over 200 ships sail this route (daily) and we want to attract them. Our vision is to consolidate the position of Sri Lanka as the premier maritime logistic centre of the Asian region.'
The agreement for building the Norochcholai Coal Power Plant Project (U.S. $855 million) was signed in 2006 and construction began in July 2007. The plant is expected to become operational by mid 2010. The output of the plant would be 1,658 Gwh and would meet the increasing electricity demand in Sri Lanka, which is expected to increase 10 percent annually. When operationalized it would also reduce the electricity cost which is amongst the highest in the world. The Colombo-Katunayake Expressway, worth U.S. $248.2 million, would be a high mobility link between Colombo and Katunayake International Airport. It will be fully operational by 2012. China is funding 85 percent of the total cost. The National Performing Arts Theatre, worth U.S. $21.2 million, is being on a 217 hectare site. The theatre would provide modern facilities for music, dance and drama to local and foreign artists. Construction work began in 2006.
India is highly concerned about the Hambantota Port, which has become the main symbol of growing Sino-Sri Lankan relations. According to Indian analysts Chinese interest in building the port is mainly part of their larger strategy to establish Chinese influence near ‘strategic sea lines of communications.' Indian analyst Amit Kumar in one of his articles in 2009 (observerindia.com) said that China wants to build ‘an encircled network of road and port connection in India's neighborhood, with an eye of strategic dominance over the IOR.' The presence of Chinese experts in Sri Lanka or construction purposes is also being regarded as a security threat by India. According to a report by Rediff on June 27, 2008, the presence of Chinese experts ‘will bring them within monitoring distance of India's fast-breeder reactor complex at Kalpakam near Chennai, the Russian aided Koadan kulam nuclear power reactor complex in southern Tamil Nadu, and India's space establishments in Kerala.'
The Sri Lankan government under President Mahinda Rajapakse has adopted a carefully balanced approach in their foreign interactions keeping in view Sri Lanka's political (both internal and external) and economic interests. It will follow the same policy during the second presidential term. Sri Lanka will maintain balanced relationship with India and China. Sri Lankan envoy in Ned Delhi during his interaction with IANS in February 2010, aptly remarked, ‘China is an old friend, but India is our older friend ... Our political and economic friendship with China will not be at the expense of India.'
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