Sri Lanka’s delicate balancing act - As India, China and the United States wrestle with one another, the Indo-Pacific region faces a precarious situation. Sri Lanka might hold the key to win–win collaboration

Sri Lanka’s former pro-Chinese ‘strongman’ President Mahinda Rajapaksa was voted out of office in January 2015. The new administration, led by President Maithripala Sirisena, is committed to more ‘balanced’ major power relations.

The new government has hit the reset button on Sri Lanka’s foreign policy, with initial overseas visits by Sirisena and Prime Minister Ranil Wickremesinghe to India, Japan and the United Kingdom. Sirisena also met with Chinese President Xi Jinping to express his government’s willingness to participate in the Sri Lanka-centric Maritime Silk Road, one pillar of China’s ambitious ‘One Belt, One Road’ (OBOR) initiative.

 

As the three giants — India, China and the United States — wrestle with one another, the Indo-Pacific region faces a precarious situation. Sri Lanka might hold the key to win–win collaboration. By adapting a sophisticated and balanced foreign policy, Colombo can encourage the three major strategic stakeholders to adapt to each other’s presence in the region.

The Indian Ocean is a crucial commercial waterway that carries a large proportion of global container and resource transports. Vast energy and mineral reserves as well as choke points of global trade — the Hormuz, Mandeb and Malacca Straits — are also located in this area. India relies heavily on Gulf oil and more than 80 per cent of vessels transited through the Malacca Strait in 2012. New Delhi will likely become even more dependent on these trade routes as it pursues its ‘Act East’ policy, focused on enhancing ties with Southeast Asia.

Meanwhile, China is ramping up its presence in the Indian Ocean through projects such as the OBOR initiative, which aims to better integrate Asia, Africa and Europe. Beijing has also been building up its naval presence in the region. Under the aegis of anti-piracy, China has dispatched more than 20 naval missions to distant regions in the Indian Ocean since 2008 and has recently set out to construct its first overseas naval installation in Djibouti in the strategic Horn of Africa.

India views China’s growing clout in the Indian Ocean with wary eyes. The OBOR initiative has failed to alleviate India’s suspicions. India has been reluctant to publicly endorse the project and has proposed its own ambitious initiatives, like the Spice Route, instead. India has also adopted a more assertive maritime security posture.

The United States is an enduring stakeholder in the region. Washington has critical economic interests in the area given that Asia has been its biggest commercial partner since 2013. The United States cannot afford to lose strategic ground in this emerging hot spot. Accordingly, the United States has embarked on its Asia Pivot strategy, underpinned by the Trans-Pacific Partnership.

For now, the outlook for mutually beneficial Sino–US–Indian cooperation seems bleak. Sino–Indian relations are marred by longstanding suspicion, while US–China ties are troubled by disputes in the South China Sea. But there is a way forward to harmonious coexistence in the Indian Ocean community of nations. It goes through the tiny but strategic island of Sri Lanka.

Sri Lanka is accustomed to balancing between powerful international actors. Sri Lanka has long relied on loans from the Bretton Woods institutions that came with strict conditions. After the Sri Lankan civil war, President Mahinda Rajapaksa was attracted to the no-strings attached loans offered by Beijing. China’s postwar support totaled US$6.1 billion, more than that from the United States, India and Japan combined. In return, China pushed for large infrastructure development initiatives, including the Hambantota Port and the Mattala Airport.

Sri Lanka’s seemingly inevitable drift into Beijing’s arms became known as the ‘Colombo Consensus’. The January 2015 presidential election marked the end of this era and the start of a new Colombo consensus.

Under the new consensus, relations between Colombo and Washington received a boost as leading US officials, including Secretary of State John Kerry and UN Ambassador Samantha Power, visited Sri Lanka and the USS Blue Ridge made a stopover in Colombo. Sri Lanka–India ties also took an amicable turn with reciprocal visits between Sirisena and Indian Prime Minister Narendra Modi. The Chinese presence did not vanish from the island either: following a yearlong suspension, the US$1.4 billion Colombo Port City project was successfully renegotiated and its implementation will continue.

Sri Lanka has managed to strike a balance that accommodates the United States, China and India. Chinese access to Sri Lanka is ensured by the Beijing-financed Hambantota and Colombo Port projects, as well as the development of banking services for the Asian Infrastructure Investment Bank. India is moving ahead with an oil storage facility in the vicinity of Trincomalee while a bilateral Acquisition and Cross-Servicing Agreement continues to provide the United States with a lasting presence on the island. It is clear that in the post-Rajapaksa era, Colombo aims not to grant dominance to any of these three major stakeholders.

Sri Lanka is not the only country to adopt this strategy. Sri Lanka’s position is indicative of an emerging new Indo-Pacific order, where regional countries seek to remain strategically neutral while selectively engaging with the major powers in order to serve their own interests. Sri Lanka’s case suggests that smaller countries are anything but helpless in evolving great power dynamics. On the contrary, by compelling great powers to accept each other’s presence they can serve as catalysts in promoting a harmonious regional order in the Indo-Pacific region.

Patrick Mendis is a Rajawali senior fellow of the Kennedy School of Government’s Ash Center for Democratic Governance and Innovation at Harvard University.

Dániel Balázs is a graduate student of International Relations at Tongji University in Shanghai. The views expressed are their own and do not necessarily represent the views of their affiliated institutions.