Aid from India, Japan, Russia and China seems to be more viable than aid from the West as it accompanies political conditionalities.
In the midst of it, Hamilton Reserve Bank Ltd, a US bond-holder based in the Caribbean Island, St Kitts & Nevis, has since filed a suit in New York federal court, seeking full payment, including interest. It has charged Sri Lankan government leaders, including the Rajapaksa family, with fiscal irresponsibility and corruption, and has alleged bias in the government’s decision to repay domestic debts with interest, when due. The unmentioned concern in Colombo is if the Hamilton Reserve case was only to protect the bank’s commercial interests or if there was more than meets the eye. It is especially in terms of American political pressure for Sri Lanka to yield on multiple issues, like the ‘China factor’, UNHRC probes, and the unmentioned expectation for Gotabaya to quit—which he has vowed not to do but with a promise not to seek a second term.
We plan to convene a donor conference with the involvement of these countries to find solutions for Sri Lanka's crisis," PM Wickremesinghe told the Parliament recently, adding that negotiations with the vising International Monetary Fund (IMF) team too had gone well.
The government has also despatched separate ministerial teams to Russia and the United Arab Emirates (UAE), to seek fuel supplies on concessional terms, following not-so-favourable western responses to the repeated open appeals of President Gota and Prime Minister Wickremesinghe, for immediate help. This was after Prime Minister Wickremesinghe clarified that he was not against obtaining oil from Russia, which had supplied 90,000 tonnes of crude at one go, before the controversial court-ordered arrest of an Aeroflot commercial aircraft at Colombo strained bilateral relations recently.
Envoys of European Union (EU) nations based in Colombo called on President Gotabaya, urged him to consider them as ‘friends of Sri Lanka’ and promised assistance in the midst of the current economic crisis.
The same is the case with Japan, another long-term ally, Wickremesinghe had mentioned, from the Asia region. As may be noted, aid from Tokyo has remained in low millions against the requirements. Likewise, there is no visible forward movement in the decision of Prime Minister Modi and his Japanese counterpart Fumio Kishida, taken on the side-lines of the mid-May Quad summit at Tokyo, for the two nations to ‘come together to …to aid Sri Lanka’. Prime Minister Modi also flagged the Sri Lankan food crisis along with that in Afghanistan at the more recent G-7 summit in Germany, but no substantive conclusions seem to have been arrived at. Sri Lanka needs to be hopeful about the mid-May G-7 announcement on debt-relief. Details will be known when negotiations commence.
Prime Minister Modi also flagged the Sri Lankan food crisis along with that in Afghanistan at the more recent G-7 summit in Germany, but no substantive conclusions seem to have been arrived at.
Despite Colombo’s past claims that the nation had won the ‘war on LTTE terrorism’ with multiple contributions unlikely partners in India on the one hand, and China and Pakistan, on the other, apart from inputs from the US, direct cooperation between New Delhi and China in the present context may sound utopian. The alternative could be for Colombo to get together a new Asian group of donors and investors, involving Sri Lanka’s Southeast Asian friends and some of the West Asian nations that had turned cold after the Rajapaksa regimes’ handling of the nation’s Muslim minority—with India as the fulcrum, and Japan, Russia, and the US, all chipping in, directly or otherwise. Of course, the Gulf states may require more than Colombo’s oral guarantees on the safety and welfare of the nation’s Muslims. Whether they would see India’s very presence on the grouping as adequate guarantee to leverage viz Colombo, now and later, is a question for which there are no ready answers. Yet, this one may be more workable and functional than the IMF-centric ‘aid consortium’, both owing to the conditionalities and the western hype on human rights, both of which have consequences for Sri Lanka and Sri Lankans over the short, medium, and long terms. It is more so after anti-government protestors, in a ‘retaliatory attack’ on 9 May, allegedly took the life of one government MP and also set ablaze the homes of 78 ruling party leaders. Sri Lankans would still have to be prepared for a trim on fiscal and economic fronts, yes. But on the human rights issue, India and Japan, China and Russia, not to leave out the Gulf states, hold near-similar views, and that is one concern less for the rulers in Colombo.
Indian investors would be concerned about the avoidable controversies attending on recent investment proposals by the Adanis, the nation’s fastest-growing private sector conglomerate, with interests in infrastructure, including port and power sectors, amongst others.
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N. Sathiya Moorthy is a policy analyst and commentatorRead More +