India and China fight it out to rebuild the island nation’s economy

indo china aid      China is now fighting to reap Lanka’s peace dividend by shielding it from international opprobrium. India, meanwhile, worries about the island nation, barely 30 km across the Palk Straits, tapping the pulse of Tamil Nadu’s frenzied politics.

On March 18, as Dravidian parties in Tamil Nadu raised the pitch on a UN vote over Sri Lanka’s human rights abuses in the final stages of the civil war, President Mahinda Rajapaksa cut the ribbon on the Mattala Rajapaksa airport.

Sri Lanka’s second international airport was built for $209 mn by China. It is located just 40km from the Chinesebuilt Hambantota port in the southern province.

It will be the 21st century’s largest port when the second phase is completed next year. China’s presence is about size and visibility.

The $100 mn Lotus Tower, a telecommunications tower financed by China’s Exim bank, will soar nearly 350 metres above Colombo. Indian involvement is not insignificant – its project to (build 43,000 houses in the five districts of the northern province for over $270 mn, is the single largest assistance to any foreign nation, but still dwarfed by Chinese projects.

In March 2011, India helped repair and lengthen the 950 metre long runway at Palaly airbase. The airstrip can now operate medium sized passenger aircraft. India is also building a 200-bed hospital in Vavuniya and has helped demine 9,500 hectares of the northern province.


Future plans are as modest and people focused: a $2 mn agriculture faculty in Jaffna University and reviving the 25acre Achuveli industrial zone in Jaffna.

“There is no contest really,” an Indiandiplomat in Sri Lanka said. “The Chinese are building infrastructure projects at commercial interest rates, India has given $800 mn as aid,” he said. “We have attached no strings attached. Everything except the railway line is free.”

Yet, this substantial Indian aid has not helped stem a growing perception in both countries of India’s waning influence.

India’s negative vote against Lanka on March 21 may push the country towards China. China voted for Sri Lanka.

The foundation of China’s assistance was laid during the final stages of the bloody civil By Sandeep Unnithan IN COLOMBO war.

China stepped in where India was reluctant. It supplied tanks, fighter jets, assault rifles and ammunition worth over $200 mn since 1993, according to the Stockholm International Peace Research Institute (SIPRI).

These arms played a substantial role in winning the civil war that ended in May 2009. The Lankan soldier in the victory memorial in Mullaitivu clutches a Chinesemade Type 56-2 rifle.


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