Going by the reports coming out of Sri Lanka, the upcoming weekend (29-30 November) visit of President Gotabaya Rajapaksa is likely to result in a major makeover in bilateral relations. India, too, is looking to end the decade-long estrangement and trust deficit that crept in during the tenure of Maithripala Sirisena (2015-2019) and Mahinda Rajapaksa (2010-2015). While speaking at The Huddle, organised by The Hindu (8 February 2019), Mahinda Rajapaksa made some interesting observations on India-Sri Lanka bilateral relations. It will be instructive to read it since it contains his reasons for the downturn in bilateral relations at that time.
Gotabaya’s ‘Security’ Assurance to India
Fortunately, the tide has turned, and there is the realisation that political instability in Sri Lanka has been hindering normal business between both countries, and it had to be addressed. The election of Gotabaya provided the impetus for course correction. Both countries have signaled convergence of policies on several subjects that form the core of the emerging strategic relationship. In his first interview with Bharat Shakti editor, Nitin Gokhale, on 25 November 2019, President Gotabaya gave an insight into his strategic vision on several major issues, and made some candid remarks, including on the controversial Hambantota project, adopting a neutral foreign policy, opening up the economy and getting assistance from India, Singapore, Malaysia, Indonesia, Australia and China.
President Gotabaya made some important observations on China and admitted it was a mistake to give control of Hambantota port project in its present form to China, and added that it could be renegotiated.
He solicited India’s assistance in this direction. What is even more significant is his giving assurance to the Indian government that Sri Lanka will do nothing to harm the security interests of India. This statement is a far cry from the events of past several years.
Gotabaya’s Emphasis on Improving Ties With UN
The interview saw President Gotabaya holding forth on several emotive subjects such as inter-faith issues, reconciliation of the demands of the minority communities, development projects and his personal views on some of them. Improving relations with the United Nations was among the new policy initiatives. This interview and his remarks in Anuradhapura, upon assuming office, are clearly unprecedented, and hints at Sri Lanka resetting its compass on critical matters such as unity, development, and foreign policy.
The appointment of Muttiah Muralitharan, veteran politician from Nuwara Eliya as Governor of Northern Province, is perhaps a precursor to more pro-active steps in the process of reconciliation and rapprochement. Another notable point is his invitation to the Tamil diaspora to work together to develop the country.
The focus of President Gotabaya’s visit to India is to leverage greater Indian participation in the development of Sri Lanka.
It is his strategic calculation to create an economic safety-net comprising India, Singapore, Australia, Indonesia and Japan, for greater participation in his plans. Singapore is expected to play a major role in this direction, considering his close connections and network there. A visit to Singapore in the near future should not be ruled out.
There is no doubt that the strategic planning community in New Delhi has noted the policy pronouncements made by Gotabaya and will take pro-active measures to create an enduring action plan. While India will provide the impetus, it will have to raise its profile in Sri Lanka significantly.
Ease of Doing Business: Both Sri Lanka & India Must Step Up
Both governments will no doubt create a congenial environment for further cooperation — but it is for the Indian corporate sector, hospitality and tourism sector, and educational institutions, to take the initiative forward.
The return of PB Jayasundera and Lalith Weeratunga to the corridors of power, may augur well for rapid implementation, particularly of economic assistance plans. Both of them held critical positions in the Mahinda regime. The time is opportune for India Inc to capitalise on the invitation to invest and participate in the private sector of Sri Lanka. It will be for Jayasundera and Weeratunga and senior civil servants, to ensure level-playing grounds for Indian companies.
Ease of Doing Business (EoDB) in Sri Lanka must improve, and India, too, likewise, has to reciprocate.
It is time for the corporate sector of both sides to step in and lead from the front. India has to think “out of the box” to make the best of the given opportunity. Prime Minister Modi has provided an excellent bridgehead for Indian business in Sri Lanka.
South Asia has been the largest recipient of Indian financial assistance, constituting 74 percent of total aid in 2017-18.
However, the share has been decreasing since 2011-12. Out of South Asia, in 2017-18, around 50 percent of total aid given by India has been received by Bhutan alone. The assistance includes small development programs which focus on providing and improving the basic infrastructure in Bhutan. Nepal has received around 7 percent of the total aid given by India in the year 2017-18. The programs implemented in Nepal are centered on infrastructure development, health, water, and education. India is also funding various infrastructure development projects in Bangladesh and the Maldives.
Loans & Grants Given By India
Indian Aid to Sri Lanka
A large sum of India’s aid to Sri Lanka goes into infrastructure development, housing and shelter, water and sanitation, livelihood, education, research and training, healthcare, industrial development, arts, culture and sports. The Indian government has committed 51 SDPs in Sri Lanka, of which 48 have been completed and 3 are under execution. Further, India’s foreign aid spending in Sri Lanka increased to Rs 499.7 crore in 2014–15 and Rs. 403.8 crore in 2015–16, and then witnessed a sudden drop with spending as Rs 99.16 crore in 2016–17, followed by an even lower figure of Rs. 77.89 crore in 2017–18. Subsequently, these figures have climbed back up to Rs. 165 crore in 2018–19.
Sri Lanka is one of the major recipients of development credit given by the Government of India, with total commitment of around USD 2.63 billion till 2017, including USD 458 million as grants.
It is expected that the share of Sri Lanka will increase manifold when the next budgetary provisions are made.
How Sri Lanka Can Gain From India’s Experience & Expertise
EXIM Bank, in 2016, signed Buyer’s Credit Agreements, under National Export Insurance Account (BC-NEIA), amounting to USD 403.01 million with National Water Supply and Drainage Board (NWSDB) of Sri Lanka in Colombo, for financing three water supply projects. Under the Buyer’s Credit portfolio, EXIM Bank has already extended credit amounting to nearly USD 185 million to Sri Lanka for water supply and other projects.
A Special Economic Zone (SEZ) in Trincomalee for developing solar energy products, pre-fab housing materials, marine food processing and export, and two-wheel electric vehicles, should become a corporate sector initiative.
This will be an adjunct to helping MSME joint venture between both sides for many advantages. India can undertake skills development and capacity building ventures with remote education facilities. Leveraging IT/ICT in rural education, especially in public health, hygiene, sanitation and environment is another area where Sri Lanka can take advantage of India’s experience and expertise. This can include revival of Tri-Lingual Training programs between both countries, put into place in 2010-2011 and terminated in 2015.
Why President Gotabaya Needs India’s Support
India’s military, intelligence and security establishment has maintained its relations with its Sri Lankan counterpart, and both sides have been on the same page at all times. The security environment in the neighbourhood will be discussed in light of the 21 April Easter Church bombings, and lessons learnt from it. It is necessary to identify reasons for the spread of religious fundamentalism in the eastern province, and take steps to address the fault lines.
President Gotabaya will certainly use the opportunity to brief his Indian counterparts on several of his foreign and domestic policy initiatives.
Sri Lanka will witness major political activities in the next 4-6 months, and it is crucial for President Gotabaya to take India’s support in the quest for stability, safety and security, to ensure progress and development. A successful visit to India will strengthen his hands enormously and will accelerate improved relations. India needs an all-weather friend in Sri Lanka, and this visit will be the precursor for it.
(PM Heblikar is Managing Trustee, Institute of Contemporary Studies Bangalore (ICSB). This is an opinion piece and the views expressed in this article are that of the writer’s own. The Quint neither endorses nor is responsible for the same.)
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