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CHINA JITTERY OVER INDIA’S SUPPORT TO SRI LANKA

Undoubtedly, India is making all possible efforts to ensure that Sri Lanka recovers from its worst economic crisis speedily. Last week, India became the first of Sri Lanka’s creditors to officially back Colombo’s debt restructuring programme by sending financial assurances to the International Monetary Fund (IMF). In fact, the IMF has made its $2.9-billion package […]

Undoubtedly, India is making all possible efforts to ensure that Sri Lanka recovers from its worst economic crisis speedily. Last week, India became the first of Sri Lanka’s creditors to officially back Colombo’s debt restructuring programme by sending financial assurances to the International Monetary Fund (IMF). In fact, the IMF has made its $2.9-billion package for Sri Lanka, provided the financing assurances should come from the island nation’s official creditors. China, Japan, and India are Sri Lanka’s three largest bilateral lenders. So, India quickly acted and wrote to the IMF, saying it would commit to supporting Sri Lanka with financing and debt relief. But similar action on the part of China is missing as of now. China’s 19 January letter, sent to the Sri Lankan finance ministry, is not enough for Colombo to immediately gain the IMF’s approval for the critical loan. So, IMF help is still in doubt. Now the question is whether China is really ready to help Sri Lanka secure an IMF loan. There are reports that the IMF has not yet acknowledged having received any commitment from China like the one India has given. The Governor of the Central Bank of Sri Lanka has said that Sri Lanka is still waiting for India’s assurance to the IMF from China. Even if Beijing sends a clear assurance similar to what India provided to the IMF, it will do so not without seeking to get something in return. Securing strategic advantages and expansion of footprint further in Sri Lanka would be Beijing’s expectations in return. Already China is desperately trying to catch up with India’s economic and other support to Sri Lanka. But India has left China behind in extending concrete support to Colombo’s economic recovery. It was in a message to China only that External Affairs Minister S. Jaishankar during his visit to Sri Lanka said that India did not wait for other bilateral creditors, but did what is right for Sri Lanka’s economic recovery. He made these remarks after talks with Sri Lankan President Ranil Wickremesinghe in Colombo. In contrast to what India has done, China has responded to the crisis in Sri Lanka with mere verbal expressions of support. Earlier, the Chinese government used to be silent on the development in Sri Lanka. But now when India has come up with concrete support, China is trying to show that it is also in action. But China’s real intention would be known only after it seriously reaches out to the IMF for financial help to Sri Lanka. India is also planning to ensure a massive enhancement of investments in Sri Lanka so that it could be pulled from the economic crisis. For this to be a reality, New Delhi is reported to be working with various like-minded countries. Assurances are coming from them as well. Recently, Jaishankar said that India will encourage greater investments in the Sri Lankan economy, especially in core areas like energy, tourism and infrastructure. “We count on the government of Sri Lanka to provide a more business-friendly environment to create a powerful pull factor.” But all this must not be going down well with China. What India needs to be cautious of is that Beijing would try and scuttle India’s plan to boost investments in Sri Lanka. Needless to say that China would never like to see India being instrumental in the economic recovery of Sri Lanka. So, the Chinese strategists would, undoubtedly, be coming up with one hurdle or the other. It is the Sri Lankan government that must provide a proper investment-friendly environment, countering Chinese propaganda. The immediate task is to ensure that Sri Lanka gets an IMF loan. Focussing on this task, India has led by example to support Colombo with written assurance. As a result, China would be under more pressure to follow the same action. It would be the duty of Sri Lanka to see that China does not succeed in taking any undue advantage of the support and help it provides. 

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