Colombo’s key role in the region

sri lanka nexusWould Sri Lanka being the latest political playground for India and Pakistan and its whipping boy if efforts of reconciliation fail?

Without any doubt the Indian Ocean Island of 22 million people is playing a key role in the region and assuming facilitation or a mediatory role is not beyond reach and desire.

Any effort to jumpstart its economy to a Singapore styled-formula, as has been suggested here in recent times, would invariably need the support and backing of the two powerful arch foes in the region, with China also playing a big role.

Last week when Pakistan Prime Minister Nawaz Sharif visited Colombo on a much-hyped three-day visit, he met a group of local businessmen at a breakfast meeting and welcomed a suggestion that Sri Lanka could play a vital role in mending fences between Pakistan and India.

The suggestion came from a senior local journalist who said that SAARC (the South Asian regional grouping) as a movement had failed to reach its full potential considering it’s the world’s most populous region with more than 1.6 billion people.

Noting that Colombo could be an ideal platform to promote people-to-people trade and business contacts between the two powerful regional countries, the journalist asked whether Pakistan would welcome Colombo’s role as a go-between for the two arch foes. Sharif was enthusiastic and while acknowledging that SAARC needs to play a more effective role, said; “… I welcome the role of Sri Lanka providing some kind of ‘understanding’ to bring together (us) and all the SAARC countries”.

That must have been sweet music to the ears of Sri Lankans politicians and policymakers. However, soon after the visiting Prime Minister left Sri Lanka’s shores trouble was brewing between the South Asian powers. In fact, while Sharif was meeting Colombo’s businessmen he was also fire-fighting a crisis at home where Indian border guards were battling an incursion into an airforce base by border-crossing Pakistani militants.

That aside, India was furious over Colombo’s plans to buy JF-17 Thunder fighter aircraft from Pakistan in a deal worth $400m which was to have been announced during Sharif’s visit.

Stung by India’s objection, the Sri Lankan government is learnt to have dropped the deal, according to an Indian newspaper report which was widely carrying in Sri Lankan media websites on Sunday. Pakistan newspapers had reported that Sharif would be signing the deal during his Colombo visit.

The sale of aircraft was not among the eight agreements on trade and other matters signed between Sri Lankan President Maithripala Sirisena and Sharif in Colombo.

Whatever Colombo does to benefit either India, Pakistan or, for that matter, China, raises alarm bells in Delhi or Islamabad. “If India sneezes or catches a cold in Colombo, Pakistan is worried. If Pakistan extends a hand of friendship in Colombo, India is suspicious,” opined a senior journalist colleague in Colombo, adding rather humorously, “If China wants some action in Colombo, then both India and Pakistan are on their guard.”

Over the past decade, China’s entry into Sri Lanka’s political and economic space has got India so much worried that wherever China had a presence, India appeared to do the same. Many years ago, former Sri Lankan President Mahinda Rajapaksa relied heavily on a few ‘unusual’ friends when the west refused to support his bloody crackdown of Tamil militants in 2006-2009 since civilians, it was feared, would be trapped in the fighting.

Left with no choice, Rajapaksa sought the help of China, Libya and also India for military and other aid. Having crushed LTTE rebels in mid-2009, Rajapaksa obtained Chinese assistance to build an airport, harbour and other infrastructure in his southern base town of Hambantota. Chinese assistance was sought in rebuilding parts of the shattered Jaffna city in the north, home of the rebels, and across Sri Lanka. When that happened, India opened a consular office in Hambantota, a sleepy town which neither had many travellers to India (if it was for the purpose of issuing visas) nor wide business interests, drawing a “maybe to see what China is doing” remark from a local analyst.

In Jaffna too, India set up a consular office though it made more sense there as its residents are all Tamils and connected to Tamil residents in nearby Southern India (separated by just 18-20 km across the Palk Strait with Jaffna) through relationships, family ties and business interests.

The to-and-fro battle between China’s developing business interests in Sri Lanka and India’s concern has been a thorn in relations between Colombo and Delhi, though the Sri Lankan government has been warming up to India and explaining – through many high level contacts between politicians and officials of the two countries – that it considers India a very important partner. For that matter China’s involvement in the business and economic space in Maldives has also riled the Indians, fearing Beijing’s expansionist role in the region.

In recent times, the mega Chinese-built port city in the heart of Colombo has raised Indian concerns. This multi-million dollar project which involves building a huge city on reclaimed land from the sea drew environmental protests and political criticism from the opposition when it was first proposed three years ago under former President Rajapaksa.

However the then opposition which now controls the government is backing the project since it needs China’s support for infrastructure work plus financial assistance. In a trade-off, India is also being offered a large slice of the new infrastructure development being carved out in the country.

Meanwhile, India is sending two top officials in the next few weeks for talks with Sri Lanka. Indian Foreign Secretary S. Jaishankar is due in Colombo later this month followed by a visit by Indian Foreign Minister Sushma Swaraj in February, according to Colombo-based foreign diplomats. Talks are to centre on Indo-Sri Lanka trade ties and a controversial, new trade and services agreement building on the earlier Free Trade Agreement between the two countries. Pakistan’s role in Sri Lanka will also be discussed.

The proposed Comprehensive Economic Partnership Agreement with India triggered protests a few years back from Sri Lankan businessmen and professionals fearing the island would be swamped by traders and Indian workers. Rajapaksa then suspended talks on the proposed deal. Sri Lanka’s new ruling team – President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe (who belong to two opposing political parties) – has reactivated the negotiations and renamed it as the Economic and Technical Cooperation Agreement (ETCA). Plans are to sign in mid-2016.

But new issues emerged last week when Colombo agreed to include the export of ‘services (people)” in a Sri Lanka-Pakistan Free Trade Agreement (FTA) that has existed for nearly a decade.

The New Indian Express said in a report that Sri Lanka has agreed to the inclusion of “services” in its Free Trade Agreement with Pakistan, while opposing the inclusion of this sector in the proposed trade agreement with India. Whichever way you look, Colombo has to tread a delicate tightrope in its relations between India and Pakistan. Building trust and friendship through Colombo’s role as a facilitator may be a start in this direction and possibly engaging both countries in Sri Lanka’s economic development. (The Peninsular)

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