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Big powers are false friends of Sri Lanka

Sri Lankan protesters must not be divided over false support offers from India and China
Issue 2802
Anti-government protest in Sri Lanka

Anti-government protests in Sri Lanka want president Gotabaya Rajapaksa out

While crisis continues to grip Sri Lanka, the region’s big rivals—India and China—are hoping to outdo each other with offers of “help”. Huge protests again gripped most of the island’s towns last week. Farmers, bank workers and doctors were all in the streets to demand an end to the regime of Gotabaya Rajapaksa and his band of exploiting brothers. Rajapaksa’s dash for economic growth by massive government borrowing and cutting taxes for the rich spectacularly backfired during the pandemic. Now ordinary people are paying the price.

Months of lengthy electricity blackouts have been followed by shortages of food, fuel, medicines and other essentials. Hospital doctors have stopped all routine surgery to conserve supplies for emergencies only. Farmers are effectively banned from using fertilisers and crop yields have been slashed. Even former cabinet ministers are demanding the fall of the government after police shot and killed a protester last week. But there is now a global battle between states and institutions that insist they want to “help” Sri Lanka out of its economic disaster.

The World Bank and the International Monetary Fund (IMF) are circling the island. They want to further “liberalise” the economy by cutting food and fuel subsidies that benefit the poorest. The plans would also see the price of basic goods rocket further. But any “stabilisation loans” would affect the main country’s creditors, particularly India and China. China has stepped in with a relatively modest offer. It is prepared to lend £24 million in urgent emergency aid, including rice, pharmaceuticals and other vital goods.

It has already lent the Sri Lankan government over £1 billion during the pandemic. If Sri Lanka’s economy were to drop further, China’s rulers will likely attempt to exchange their debts for increased ownership of the state and its assets. Establishing a friendly government, if heavily indebted and partially-owned, in the Indian Ocean has long been one of its strategic objectives. It has already financed the building of Hambantota international port and was recently cleared to start work on the Colombo Port City. Sri Lankan authorities hope that this will be a South Asian equivalent of Dubai.

For its part, Indian firms have also been pouring in cash. Earlier this year the Adani Group signed an agreement to build a new container terminal right next to the Chinese-run one in Colombo. Now the Indian government is offering to hook up Sri Lanka to its own electricity grid by running a cable under the ocean to the island. India and China want to pull Sri Lanka deeper into a “debt trap” that will force the country into their strategic orbit for generations. Those protesting on the streets should not be fooled by these offers, nor those from the IMF. The hope for workers and the poor striving to survive is to stay on the streets, build strikes, and defy any attempts to divide them.

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