US,
India face Sri Lanka
challenge By Anuradha Sharma
and Vishal Arora
Sri Lanka is not only
refusing to bring about reconciliation in the
north of the island, where tens of thousands of
civilians were killed in the last phase of the war
against ethnic Tamil rebels in 2009, it is also
fast descending towards dictatorship.
A
key question surrounding the country's future is
whether its two main trading partners, the United
States and India, have the leverage to deter
Colombo, or can it resist international pressure
with China's help?
Three years after the
war ended, the government of President Mahinda
Rajapaksa has deployed military personnel in large
numbers in Sri Lanka's north and east, formerly
under the control
of the Liberation Tigers
of Tamil Eelam (LTTE).
"The construction
of large and permanent military cantonments, the
seizure of private and state land, and the
military-led cultural and demographic changes -
all threaten Sri Lanka's fragile peace," Alan
Keenan, International Crisis Group's senior
analyst, said in a recent report. "Instead of
giving way to a process of inclusive, accountable
development, the military is increasing its
economic role, controlling land and seemingly
establishing itself as a permanent presence."
The overall atmosphere of the country is
also gloomy, affecting all, including the
Sinhalese people in the south. The media, the
civil society, the judiciary and the opposition
have all been rendered powerless.
" ...
Human rights groups and opposition leaders warn
that the country is descending toward
dictatorship, with dissent brutally crushed, the
media cowed and the minority Tamils, whose
insurrection caused the war in the first place,
still treated like second-class citizens," writer
Simon Denyer noted in an article in The Washington
Post on July 13.
After the war, the
president appeared to be extremely insecure,
anticipating - correctly - that he would lose
office if genuine democracy remained. People in
the north and the east were never part of his vote
bank, and now the southerners weren't too happy as
the huge financial strain of the war hit the
country's economy.
The regime had sought
to justify the war with the promise that it would
lead to peace and economic development. On the
contrary, demands for higher salaries and protests
over price hike took place despite the
government's heavy-handed response.
The
only way Rajapaksa can secure his position, and
perhaps life, is by remaining in power with an
iron hand. But masses cannot be expected to
tolerate authoritarianism for very long in the
absence of economic wellbeing, perhaps the biggest
postwar challenge for Rajapaksa. This makes the
United States and India indispensable.
However, the US and India appear cautious
in dealing with Colombo, fearing they might push
Sri Lanka even closer to China if they fail to
balance the stick with the carrot.
For
example, the UN Human Rights Council in March
adopted a US-backed resolution - and India voted
for it - urging Sri Lanka to investigate alleged
abuses during the final phase of war with Tamil
Tigers.
But in June, the United States
Trade Representative decided to continue trade
benefits granted for Sri Lanka, which were facing
possible suspension because of labor concerns. In
July, India and the US agreed to provide enhanced
training facilities for Sri Lankan military
personnel to "strengthen the security of sea lanes
in the Indian Ocean".
The fear of India
and the US is based on the high strategic
importance of the Indian Ocean Region, where China
has managed to have an edge over them.
China has been eyeing the Indian Ocean as
a future sphere of influence, said Commodore R S
Vasan IN (Retd), Head of Strategy and Security
Studies at Center for Asia Studies in Chennai,
India. China has used the issue of piracy in the
west Arabian Sea and in Somali waters to
legitimize its presence in the Indian Ocean, he
said. "Beijing has maintained a presence of its
navy units in the Gulf of Aden on anti-piracy
missions to protect its own shipping that carries
vital supplies to China."
While India
dilly-dallied in taking up the offer to help build
the Hambantota water port in Sri Lanka, China
grabbed the opportunity to have an outpost at the
southern most tip of the island.
"On the
surface, it is a commercial investment with soft
loans and assistance," Vasan said. "Deep
underneath, that would provide leverages to China
to use the facilities when the situation so
demands."
From the Chinese point of view,
deep sea ports - whether in Gwadar in Pakistan,
Hambantota in Sri Lanka or others in Bangladesh
and Myanmar - would provide options for the
turn-round of ships and also to have monitoring
posts to build up intelligence/database on the
activities in the region, he said.
India
is concerned about the advances of China, which
appears to be encircling India. "India enjoys a
geographical advantage with its reach and
location," Vasan said.
The Indian Navy's
recent commissioning of new air station INS Baaz
in Campbell Bay in Andaman and Nicobar Islands
(see India
extends Malacca Strait reach, Asia Times
Online, August 8, 2012), along with the existing
surveillance architecture under the control of the
Tri Services command, can ensure that no traffic,
including Chinese vessels, leaves or enters the
Indian Ocean through the Malacca Straits.
"The Indian Navy is more than capable of
looking after its interests [but only] as long as
the nuclear thresholds are not crossed."
For the US, the recent emphasis on the
pivot to Asia Pacific brings in renewed interest
of the superpower in the island, Vasan said. The
administration of President Barack Obama plans to
reorient US military policy towards the region as
the conflicts post 9/11 bogged down military
resources in the Muslim world.
Asia is
likely to be the focus of US foreign policy given
the massive economic growth in the region, where
China's military presence is increasing and the
threat of a nuclear-armed North Korea is looming.
"With the growing military and economic
potential, China is omnipresent and - while not
necessarily in a position to displace the US as
the largest economy and a superpower - can cause
headaches in many parts of the world, notably in
South China Sea," Vasan said.
The US would
increasingly look at India to engage Sri Lanka.
However, there are impediments to India
normalizing relations as long as the Tamil issue
keeps simmering. So the ethnic issue takes center
stage in the US and India's engagement with Sri
Lanka.
To influence Sri Lanka
domestically, Washington must not underestimate
the leverage it has in terms of its economic
importance to Colombo. For, while China may have
become politically indispensable to Sri Lanka,
Colombo may find it difficult to replace the US
economically.
"Chinese financing to Sri
Lanka is less concessionary, and more commercial,
than financing from the US, and other Western
countries. However, financing - concessionary or
not - is not a significant point of leverage on
the Sri Lankan government," said Nishan de Mel,
director of Verite Research, a think-tank that
tracks the economic and political pulse of the
country through macro data and analysis of
vernacular press reportage in Sri Lanka.
"As long as the International Monetary
Fund engagement continues, Sri Lanka will be able
to borrow at affordable commercial rates on the
international markets," de Mel said. "Not long
ago, Chinese lending was also at around 6%, around
the same rate as the recent US$1 billion bond Sri
Lanka raised in the international market. This
means that Chinese funding can also be
substituted."
The International Monetary
Fund (IMF) on July 20 released the final
installment of a $2.6 billion bailout agreed in
July 2009, two months after Colombo defeated Tamil
rebels and when the nation's foreign reserves had
dropped to $1 billion, just enough to support
imports for a few weeks. The bailout is the
longest engagement Sri Lanka has had with the IMF.
"Sri Lankan authorities now look forward
to the continued close engagement with the IMF and
intend to discuss the possibility of financial
support for its economic development agenda", the
Central Bank of Sri Lanka said in a statement.
The US and India are probably more
concerned about the strategic implications of the
Chinese presence, and that has no necessary
connection to economic partnerships, even though
they are usually negotiated together. The regime
could, for instance, try to barter strategic
advantages to China, simply for support at the UN
Security Council, and other international fora,
where it feels under pressure from Western calls
for accountability with regard to human rights
abuses and war crimes.
"However, when it
comes to economic pressures, while China has been
heavily investing in infrastructure in Sri Lanka,
as it has been in many other countries, the
determining factor of the current trajectory of
the Sri Lankan economy is the capital markets,
where finance capital particularly from the US has
been critical to prop up a fragile financialized
economy," said Colombo-based political analyst
Ahilan Kadirgamar.
Kadirgamar added that
any future crisis in the Sri Lankan economy was
more susceptible to market forces affecting its
balance of payments rather than political and
economic engagement by the global and regional
powers.
The leverage the US has, and India
can have, would be through trade, agreed de Mel.
"Withdrawals of concessions, or positive barriers
to entry to the US market, can hurt Sri Lanka and
its economy significantly."
Given that the
political economy of Sri Lanka is considerably
internationalized, it is susceptible to trade and
capital flows, and it would be significantly
affected by barriers from any of its major trading
partners, added Kadirgamar.
However, if
such instruments were used without adequate
explanation and justification, the pressure on the
regime could be countered somewhat by presenting
it as unfair action targeting the country - and
whipping up nationalist sentiment in defense, de
Mel cautioned.
"India does not have that
leverage at present, because exports to India are
still low, but the business community in Sri Lanka
is looking at India as the growth area for trade
in the future, so that carrot, if made tangible
and dangled, will have leverage," de Mel said.
Even so, "the direct pressure on the regime
through human rights and war crimes investigations
remains the single strongest point of leverage."
Such efforts are targeted very
specifically at regime actors, and do not affect
the population in general. Besides, even the
southern population is getting fed up of the
dysfunction in law and order, and as a result are
now less enthusiastic about the idea that human
rights investigations against particular regime
actors are an affront to the nation.
Furthermore, for the regime, being able to
travel and function internationally in the long
term is crucial, and it will be willing to
compromise a lot to avoid jeopardizing its
personal fortunes and futures.
Another
point of leverage, not yet tried, is with regard
to corruption, de Mel suggested. Investigations
and freezing of bank accounts of the regime where
corrupt gains may have been held in foreign
accounts or assets is an extremely strong point of
leverage that the US can have, especially since
regime actors have significant assets in the US.
Sri Lankan society does not legitimize corruption,
though it is tolerated, and there can be no
nationalistic sympathy for the freezing of
ill-gotten gains.
It's time Washington and
New Delhi re-evaluated their paranoia over
Beijing's ability to marginalize them, and began
to flex their diplomatic muscles with Colombo,
provided they truly believe in promoting democracy
and civil rights in the world.
Vishal Arora is a New
Delhi-based journalist. He researches and writes
on politics, culture, religion, foreign affairs
and human rights, primarily but not exclusively in
South and Southeast Asia. His articles have
appeared in the Guardian, the Washington Post, the
Huffington Post, USA Today, World Politics Review,
Foreign Policy in Focus, the Religion News
Service, and many other outlets. He can be
contacted at vishalarora_in@hotmail.com and some
of his articles can be read here. Follow him on
Twitter: vishalarora_in . Anuradha
Sharma, a Calcutta-based independent
journalist who writes on politics and culture in
South Asia.
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