In light of the growing leverage due to high financial dependency of Sri Lanka there is a steep increase in Chinese imports at terms conducive to the Chinese companies thereby creating a growing trade deficit which in turn devaluating the Sri Lankan Rupee, writes Binay Kumar Singh
China has set course on a path of hegemony centred on an expansionist agenda, to realise the malicious vision of Chinese Communist Party (CCP), with the Belt and Road Initiative (BRI) at its core. Sri Lanka post the war has been falsely lured into this entrapment of expensive infrastructure projects shown by China at the cost of unimaginable monitory gains for the state owned Chinese companies. Thus, it is essential that the motive behind this engagement with China is critically examined and understood before Sri Lanka also gets soaked in the ‘Red Colour’. A price that may have to be paid by compromising individuality, existence and even sovereignty.
BRI is the garb to entice nations into futile and ineffectual projects which are extravagant compared to more realistic challenges being faced. The projects are promoted as one of its kind infrastructure development project with fictitious prospects; however they are of significance and benefit primarily to China. The initiatives provide easier and convenient opportunities to address vulnerabilities of China at the cost and investment of individual nations. The mechanism provides expedient access for Chinese state owned companies to saturate the economies of small nations and saddle the borrowing nation with loans which can be leveraged when needed. In addition, China with its financial freedom has emerged as an independent nation providing financial alternatives over international organisations like IMF, ADB etc. to secure individual and selfish designs.
The infrastructure projects of road, rail, buildings, ports etc. with inflated costs are advertised as comprehensive solutions without disclosing the methodology and terms of execution. The projects in Sri Lanka like the $104 million Lotus tower which never got commissioned or the $209 million Mattala Airport which is the World’s Emptiest Airport, though presumed to be funded by China had all its costs recovered through execution by Chinese entities, using equipment/machinery/material from China including significant proportion of labour/top management. In effect, whilst Sri Lanka paid for the projects, it filled Chinese treasury for a requirement which was not essential. Further, due to the confidentiality of project being pursued by the Government the actual cost of the projects are also largely exaggerated.
In light of the growing leverage due to high financial dependency of Sri Lanka there is a steep increase in Chinese imports at terms conducive to the Chinese companies thereby creating a growing trade deficit which in turn devaluating the Sri Lankan Rupee. The East Container Terminal contract which was signed as a tri party agreement between Sri Lanka Port Authority, government of India and Japan for a committed Foreign investment of $400 million was withdrawn by the government of Sri Lanka under the opposition of Port Union primarily motivated by Chinese influence. ECT which was envisaged to be operated by an Indian Private Company was perceived as a huge threat to Chinese run CICT and its monopoly to handle deep draught vessels at Colombo. It was an ideal example of arm twisting by China which adversely effected the investor sentiment and in turn impacted the Sri Lankan economy.
The Chinese deceit and double standards were on open display during the Covid pandemic. Whilst medical support equipment and vaccines were commonly used by nations to demonstrate solidarity and friendship to friendly foreign countries, China visualised Sri Lanka under their grip as an opportunity to fleece. Inspite, of being late entrants due to poor quality of vaccines, despite huge resistance from a large faction of society, through corrupt practices sold 13 Million doses to Sri Lanka by July 21. Chinese vaccine- Sinopharm/Sinovac which were evidently much less effective (70 per cent and 50 per cent) had exorbitant prices of $7.5 and $15 per dose much higher compared to other counterparts. The explanation to such foolhardiness and poor decision making on part of Sri Lanka could only be attributed to corrupt practices and continued manipulation by China.
The Colombo Port City which is being showcased as the ‘Game Changer’ with an investment potential of $15 billion is the golden goose for the Chinese to practically entrap Sri Lanka under their debt. The initial land reclamation which had costed $1.4 billion was completely executed by Chinese resources and people, which meant the investment filled Chinese pockets, however it resulted in Sri Lanka leasing out a major chunk of the land to China. Thus, presently China owns 65 per cent of saleable land whilst Sri Lanka controls only 30 per cent. Thus, Who calls the Shortsis amply clear.
The Port City Bill which provided absolute power was hastily passed in the Parliament under Chinese pressure without due diligence. The Port City Commission that got constituted are a group of people selected by the Chinese for their long term Chinese linkages who would dance to the tunes of CCP. Excessive propaganda and hype is now being created to fool the public through false claims of 2 lakh job prospects in next 5 years, whilst the gain is only to a select few.
The Chinese approach in Sri Lanka has been out right capitalist where in the Sri Lankan economy is flooded with cheap Chinese goods so as to kill the local economy and extract as much Strategic advantage by trapping the government of the day in frivolous infrastructure projects. The malicious intent of Chinese projects is not restricted to economic domain; in a recent incident in May 2021 uniformed Chinese company workers were sighted in Hambantota with total disregard to law of the state, which was just a trailer of what is in stored for the future, when the sovereign decision making would be challenged through economic pressure.
It needs to be understood that all Chinese deals come with hidden agendas particularly with the aim to in-debt the country, take control of land, fill the coffers of China at the expense of smaller countries under the garb of development. The modus operandi of engagement has been similar in Africa, Asia and Latin America where in countries have been indebted with Chinese loan of Billions of dollar. Thus, Sri Lanka must guard its democratic sovereignty in their best interests, lest it is also Coloured Redunder the Chinese shadow.
(Author and columnist Binay Kumar Singh can be reached on Twitter @BinayBharat. All views expressed are personal.)