International interest in Sri Lanka’s ports

International actors, notably India and Japan have become increasingly concerned about the level of Chinese investment and influence in Sri Lanka. This has in turn set off a flurry of activity among all parties to secure Sri Lanka’s favours.

On April 12th, Prime Ministers Abe and Wickremesinghe met to discuss furthering bilateral cooperation. This is PM Wickremesinghe’s second visit to Japan since coming to power in 2015, and his ninth overall. The meeting resulted in $410 million in Japanese loans for Sri Lankan infrastructure projects, as well as $9.2 million in grant aid for the development of the Trincomalee port.

Other recent developments include Japan’s decision to appoint a special representative to coordinate development in Sri Lanka, as well as a code sharing agreement between Sri Lankan Airlines and JAL which will help facilitate six new routes between Japan and South Asia, aiding trade and tourism ties between Colombo and Tokyo.

Japan looks to boost ties, counter China

Speaking during the meeting, PM Abe stated that “without a free and open Indian Ocean, there cannot be real prosperity in the region. This is why it is essential for Sri Lanka to achieve sustainable growth as a hub and develop ports that are open to everyone.” These comments came in the wake of Sri Lanka’s assurance of its commitment to free navigation and the authority of the United Nations Convention of the Sea (UNCLOS). These statements bolster Japan’s own focus on these issues, as well as mark out China, which has refused to abide by UNCLOS arbitration over the contested South China Sea.

This also ties into greater Japanese concerns about China’s increasing presence in the Indian Ocean, the main conduit for vital energy shipments from the Middle East to Japan. These fears had been heightened by the previous Sri Lankan administration’s close ties to China. In his latest visit, PM Wickremesinghe is pitching Sri Lanka as a trade and finance hub, halfway between Doha and Singapore. To this end, Wickremesinghe wants “Japan to use Sri Lanka as a hub for trade. We expect to deepen our existing FTA with India through the Economic and Technology Cooperation Agreement, expect to sign a FTA with Singapore and another with China. We also hope to talk to Japan, Indonesia and other ASEAN countries with regards to FTAs.” (Global Risks)