Teardrop Diplomacy: China's Sri Lanka Foray

Advance Praise for Teardrop Diplomacy

‘Asanga Abeyagoonasekera’s new book is essential reading for understanding the perils faced by Sri Lanka and other Indo-Pacific countries as they navigate between the major powers. It provides a front-row seat to Sri Lanka’s China tilt under the guise of neutrality and the corrupt dealings that led to the country’s economic and political collapse. The book is a stark warning for those who think that China’s money comes for free.’

Dr David Brewster, senior research fellow, National Security College, Australian National University

‘Asanga Abeyagoonasekera is an important voice from the trenches of the fight for liberty, democracy and justice, shining a light on the human cost of authoritarianism and corruption. I encourage everyone to read this book, not just to learn about Chinese influence in Sri Lanka but to acquire a general lesson on the existential importance of fighting to protect democratic values at this time.’

Daniel Sachs, founder, Daniel Sachs Foundation; senior advisor, Chatham House; and global board member,

Open Society Foundation (OSF)

‘What happened in Sri Lanka? If you want to know what is really going on, this book is one of the best in the world. This book covers both a big picture of US–China–Sri Lanka relations and real experiences in the island state. Therefore, I strongly recommend it.’

Dr Satoru Nagao, fellow (non-resident), Hudson Institute

‘In Teardrop Diplomacy, Asanga Abeyagoonasekera does a masterful job in outlining China’s engagement with Sri Lanka and the resultant impact on regional relations, great power competition and the security and economic stability of Sri Lanka itself. This work offers a cogent and balanced view from the Sri Lankan perspective, rightly reminding us of how decisions made can have unintended consequences for years to come. For students and experts on South Asian security and economic relations, this is a valuable and timely source.’

Dr Roger Kangas, dean, Near East South Asia Center for Strategic Studies, US Department of Defense, Washington, DC

‘The Indian Ocean is one of the most contested regions in the world today. China, the US and India, and also Japan and Australia among others, are struggling for influence over Sri Lanka. Asanga tackles issues arising from these tussles, which are complex and require a nuanced approach and good judgement to secure Sri Lanka’s best interests. The countries involved in the competition for influence in the region are the most powerful in the world [and they] all have significant stakes in promoting their interests at the expense of Sri Lanka’s national interest. I congratulate Asanga on the research he has done and the learning he manifests in this book, which fills a lacuna.’

Dr Jehan Perera, executive director,

National Peace Council of Sri Lanka

‘In Teardrop Diplomacy Asanga Abeyagoonasekera, one of the most perceptive amongst Sri Lanka’s international relations experts, traces the geopolitical complexities that this island currently faces. Applying this geopolitical perspective, he incisively explicates Sri Lanka’s ongoing politico-economic crisis. Indeed, the book carries an urgent message about how powerful nations can use their economic leverages to achieve their geopolitical objectives, especially so in the lingering post-pandemic precipice. Locating Chinese economic diplomacy and the Belt and Road Initiatives outreach into the Indian Ocean rim in the context of US–China great power rivalry in the Indo-Pacific, it illuminates interesting and evolving trajectories of its impact on Sri Lanka in specific and South Asia in general with clear implications for China’s peer competitor, India.’

Dr Swaran Singh, professor of diplomacy and disarmament, Jawaharlal Nehru University, New Delhi, and currently visiting professor, University of British Columbia, Vancouver

‘Through the lens of Sri Lanka, this book is a clear warning about how a democratically elected regime turned into an autocracy in a few months. Read it and learn. Democracy is hard to get and easy to lose.’

Lisa Witter, cofounder and CEO, Apolitical Foundation

‘Asanga Abeyagoonasekera gives the world an extraordinarily rich geopolitical overview of the Sino-Indo-Pacific region with a very readable balance of historical context, current events and future possibilities.’

Jerome C. Glenn, cofounder and CEO,

The Millennium Project, Washington, DC

‘Asanga Abeyagoonasekera is a serious, objective and unconventional analyst of Sri Lanka’s strategic affairs. He has knitted an insightful narrative of Sri Lanka’s dilemma in coping with the pressures of regional and great powers’ competition in the Indo-Pacific region. He makes a valid point that without a credible democracy and stable economy led by honest and competent leadership, the island nation will not be able to remain afloat in the turbulent waters of the Indian Ocean.’

S.D. Muni, professor emeritus, School of International Studies, Jawaharlal Nehru University, New Delhi, and former ambassador and special envoy of the Government of India

‘Few places in the world capture contemporary global strategic trends more sharply than Sri Lanka. In Teardrop Diplomacy, Asanga Abeyagoonasekera delineates the disastrous rise of the strongman rule in Sri Lanka, its intersection with China’s power projection into the Indian Ocean and Beijing’s rivalry with Delhi and Washington. Teardrop Diplomacy is a must-read for all students of the Indo-Pacific.’

C. Raja Mohan, Asia Society Policy Institute, Delhi

Teardrop Diplomacy

Teardrop Diplomacy

China’s Sri Lanka Foray

Asanga Abeyagoonasekera

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To Amma, my mother

and

To the fearless ordinary citizens who rallied to change their collective future and to re-democratise Sri Lanka

Contents

Acknowledgements

List of Abbreviations

Introduction

1 China in Sri Lanka

Sethusamudram to Samudra Manthan: Containing Chinese Influence in Sri Lanka

CCP Centenary and the Growing Chinese Footprint in Sri Lanka

America and China Dock in Sri Lanka

Before the Phoenix Nest: Questions Surrounding the Port City of Colombo

How China Won over Local Agency to Shackle Sri Lanka Using a Port City

The Rajapaksa Triumvirate and the CCP Backdoor in Sri Lanka

Political–Economic Instability and Wang Yi’s Peripheral Diplomacy in Sri Lanka

Sri Lankan Crisis between Debt Trap and Strategic Trap: The Chinese Stake

The Trap: China’s Debt Restructuring and Strategic Manipulation in Sri Lanka

Chinese Spy Ship and Lanka’s Tilt towards Beijing

2  Geopolitics

Sri Lanka and the Return of Geopolitics in the Indo-Pacific

Sri Lanka and the Coming Biden Foreign Policy

Sri Lanka Facing the New Cold War in the Indo-Pacific Theatre

Joining the Chinese Bandwagon: Geopolitics of a Container Terminal in Sri Lanka

Russia and Sri Lanka’s Role in Regional Security: Perspective from Sri Lanka

AUKUS, the Quad, China in Sri Lanka and India’s Security Concerns

A World Challenged by Geopolitical Tensions: The Global Risk Report

China in Sri Lanka and the Solomon Islands: Role of Littorals in the Geopolitical Competition

3  Sri Lanka’s Foreign Policy

Democracy and Equidistant Foreign Policy in the Majoritarian Government of Mahinda Rajapaksa

Perils of Power in Wounded Old Civilizations

Pakistan in Sri Lanka’s Changing Foreign Policy

Sri Lanka’s Rejection of the UNHRC Resolution: A Shift towards China?

One Country One Law, China Circumventing a Sri Lankan Fertilizer Hazard

Political–Economic Turmoil in Sri Lanka: Competing Interests of China and India

4  Domestic Political Environment

Sri Lanka’s Parliamentary Election: International and Security Challenges for the Rajapaksa Government

The Coming Anarchy in Sri Lanka

Rajapaksa’s Dysfunctional Regime in Sri Lanka and Its Impact on South Asia

Sri Lanka in Crisis: Repression, Protests and Geopolitical Tensions

Sri Lanka in 2021: Trouble Ahead for One of Asia’s Oldest Democracies

Sri Lankan Economy Spiralling Out of Control: Requests IMF Assistance

People’s Uprising in Sri Lanka: Sudden Rupture of the Rajapaksa Regime

Economic and Political Crisis in Sri Lanka

The Sri Lankan Crisis: The End of the Autocratic Regime

5  Security

Twenty-Point Analysis of PCoI on Easter Sunday Attack

The Lynching of a Sri Lankan in Pakistan: Decluttering Religious Extremism

Fighting Economic Crime during the Pandemic: A Sri Lankan Perspective

The Wall of Strength against Aggression

Information Warfare between Ukraine and Russia

Ayman al-Zawahiri’s Death and Political–Economic Fragility in South Asia

Annexure 1: Rajapaksa Family Rule in Sri Lanka

Annexure 2: Figure Showing the Most Severe Global Risk Factor

Notes

Index

About the Author

ACKNOWLEDGEMENTS

First, I must thank all the research think tanks that have given me the space to work and their staff for editing, and the researchers and senior academics who have taken the time to counsel and critique to improve my analysis. I also thank Jerome C. Glenn at the Millennium Project in Washington, D.C.

I thank the Observer Research Foundation (ORF), New Delhi; Millennium Project, Stimson Center, National Defence University NESA and Asia Society Policy Institute, all in Washington, D.C.; ISAS, Singapore; Cambridge University, UK; USAID, Sri Lanka; Social Impact, USA; KAS, Germany; NIICE and COSATT in Nepal; ISDP Sweden; and many other institutes that appreciated my writing and invited me to conduct research and present my work. I am grateful for their continuous support.

I thank senior advisors and government officers from many corners of the world who have recommended my work and allowed me to make presentations on Sri Lanka, Indian Ocean and South Asian political–economic, security and geopolitical challenges, to their government institutes and at research conferences. I also thank all the international media that has featured my work.

I have written this book by gathering information from many academics and practitioners of foreign policy and security studies; I thank them for providing me with valuable and timely insights and material.

I thank Bloomsbury India and Sanjiv Sarin, who copy-edited the book, for all the kind assistance in making this project a success.

Finally, I thank my wife Kumudu, and my two children, Avish and Arya, to whom I owe so much.

ABBREVIATIONS

Introduction

1 October 2022

Sri Lanka, the teardrop-shaped island in the Indian Ocean is facing its worst political–economic crisis since its independence in 1948. In April 2022, thousands of ordinary citizens protested against President Gotabaya Rajapaksa asking him to step down. Mothers, children, youth, farmers, academics, lawyers, government officers and many more joined the protest against the deterioration of the economic conditions in Sri Lanka. On 7 May 2022, Sky News reported that ‘Sri Lanka could descend into anarchy as it faces the risk of running out of fuel and food in the next month, the country’s former energy minister has said . . . President Gotabaya and Prime Minister Mahinda Rajapaksa are accused of nepotism and blamed by many for a crisis that has seen Sri Lanka’s usable foreign currency reserves dwindle to less than $50 m.’¹ The country moved into an anarchic environment when the regime used brute force to dismantle the protests. The peaceful protests turned violent within hours, and Prime Minister Mahinda Rajapaksa resigned soon after. Two months later, on 9 July, Sri Lankans from all over the island got together at the nation’s capital Colombo to join the protest and end the regime of President Gotabaya Rajapaksa. The unarmed protestors broke the military cordon, taking over the president’s office and residence, followed by the prime minister’s office. President Gotabaya escaped in a military aircraft to the nearby island-nation of the Maldives.

An year earlier, on 29 June 2021, I had written an article ‘Coming Anarchy in Sri Lanka’, describing the pattern of dysfunctionality of the regime and the dangerous autocratic path President Gotabaya Rajapaksa and the administration had chosen. I left Sri Lanka a few days later with my family since the authoritarian regime targeted many of its critics including me.

For the first time, Sri Lanka, one of the oldest democracies in Asia, had a regime which had siblings with heavy military footprints as heads in more than fifteen sectors, including Foreign Affairs, Economics, Agriculture, Health, Trade and Commerce, Disaster Management, Ports, Aviation and so on.² There were numerous extrajudicial arrests and instances of human rights abuse, as reported by UNHRC. One family controlled the entire country under a false pretext of national security, propagating ultra-nationalist sentiments, polarizing the community and building fear over exaggerated risks of losing sovereignty due to Western interference while allowing China to expand its strategic footprint. The US grant, Millennium Challenge Compact (MCC), through Millennium Challenge Corporation, and Indian port terminal projects were terminated under a guise of national security. Rajapaksa’s foreign policy was tilted towards China but sometimes preferred to hedge between India and China. During the Covid pandemic, the regime found a favourable environment to further propagate its ultra-nationalist agenda, using constitutional amendments to enhance presidential powers and dismantle independent commissions and the existing checks and balances.

This book examines how a democratically elected regime turned into an autocracy in a few months. The inward looking, ultra-nationalistic policies that resulted in multiple policy blunders costing the nation heavily, leading to protests and a complete breakdown of the state machinery, have been captured in this book. The analysis raises questions such as—What are Sri Lanka’s geopolitical challenges? In the context of the growing Chinese influence and the huge Chinese debt, is Sri Lanka in a Chinese strategic trap? Why did Sri Lanka pay the rejected fertilizer shipment from China two days before Chinese Foreign Minister Wang Yi arrived in Colombo? Is Sri Lanka sandwiched between China’s Belt and Road (BRI) and the US’s Indo-Pacific strategies? Why did the foreign secretary of Sri Lanka defend China’s human rights? Why did the regime, in rapid speed, approve a Chinese special economic, extra-jurisdictional zone in Colombo? Is there a long-term strategy for a Chinese military base operating in Sri Lanka? Is there a growing Chinese influence in strategic islands such as Sri Lanka and the Solomon Islands? What is Sri Lanka’s role in the Indo-Pacific and Quad? How does Sri Lanka see Indian foreign policy and its sphere of influence? Why did Pakistan’s former prime minister Imran Khan visit Sri Lanka in February 2021? Why were the recommendations of the Presidential Commission of Inquiry (PCoI) on Easter Sunday terror attack rejected by the Sri Lankan Cardinal?

The trust deficit between the public and the political institutions has grown. The high level of corruption, absence of accountability and the protestors’ re-democratizing efforts demanding a complete ‘system change’ in political culture are data points captured in this book. Sri Lanka’s political–economic challenges coupled with the foreign policy and the security challenges have also been analysed to present a broader picture and the strategic depth of the individual incidents.

In terms of presentation, this book is a compilation of essays on several themes, from the rise of the Rajapaksa regime in 2019 to the political–economic crisis in 2022. These essays and articles have earlier been published in various magazines and journals. There is some amount of repetition in the book since the articles needed the context to make them complete and several of them have the same context. The chapters frame the nation’s journey from a democratic country to a completely autocratic, militarized nation.

This book will help the reader to understand the underlying political and social distress in everyday life in Sri Lanka and what brought this fragile state to this crisis within three years of the Rajapaksa regime coming to power. The crisis in Sri Lanka is a lesson for many developing nations, especially those under debt distress in the post-pandemic environment. I have travelled to many of these nations, from South America, Africa and Central Asia to South East Asia. All of them are a part of the global big-power rivalry. High geopolitics has a significant impact on their domestic politics.

The US-India-China triangulation and its impact on Sri Lanka are captured in this book, with a unique Sri Lankan perspective. The importance of Sri Lanka to remain and commit to a rules-based international system, adhere to democratic norms and values, address human rights concerns, move forward as a nation along with democratic allies, and the challenges and impediments that remain to progress as a nation are all discussed in this book.

This book aims to identify the multiple policy miscalculations and challenges in the domestic political economy and foreign relations of Sri Lanka.

1

China in Sri Lanka

ONE

July 2020

Sethusamudram to Samudra Manthan: Containing Chinese Influence in Sri Lanka

¹

Alfred Dundas Taylor, a civil architect to the Admiralty in the UK, head of the marine survey department, was the first to propose the Sethusamudram Shipping Canal Project in 1860.² This canal cuts across the Hindu God Rama’s bridge, also known as Rama-Setu. According to Hindu belief, the bridge was built by Lord Rama, connecting the South Indian shore to the western shores of Sri Lanka. The 44.9 nautical-mile long canal would bypass ships navigating Sri Lanka’s southern ports, opening up a shorter, continuously navigable sea route around the Indian Peninsula. Due to religious and environmental concerns, the canal dredging was suspended at intervals and has been revived due to political interest. At present, the project’s nature has evolved into a geopolitical and security concern about Chinese influence over India’s southern shores. A senior leader of the DMK and Lok Sabha member, T.R. Baalu, has written to Prime Minister Narendra Modi to revive the Sethusamudram Project,³ citing security and geopolitical interests concerning China. The Tamilian politician from South India, mentioning China’s huge investments in Sri Lanka, argued that there is a direct threat from the Chinese presence in Sri Lanka and requested the central government to prioritize a solution for this emerging threat to protect the southern part of India. While the Indian subcontinent faced a security threat recently in the northern border with China, now its focus is drawn to protecting the southern shores.

Tamil Nadu’s political influence has been a distinct factor in the northern geography throughout Sri Lanka’s history. It has usually been the southern shores of Tamil Nadu that have exported considerable threat to Sri Lanka. From the 2019 Easter Sunday bombers, who had a direct contact with a South Indian extremist cluster as discovered by the authorities, to narcotics trafficking and maritime terrorism, there are continuous security threats to the island from South India. But the strong influence of Tamil Nadu on Colombo and New Delhi has usually centred around the Tamilian grievances and not on China. Now the growing Chinese infrastructure diplomacy in the island is interpreted as a security threat to South India. This sort of reaction by the DMK politician could hinder the ongoing India–Sri Lanka bilateral security cooperation.

FIGURE 1.1: Proposed Sethusamudram Canal

(Source: Wikimedia Commons)

In the domestic political arena, discussing the importance of the Chinese built and operated southern port of Sri Lanka in Hambantota in an interview, Prime Minister Mahinda Rajapaksa’s son Namal, who represents his father’s previous constituency since 2010, explained, ‘Hambantota will become the next commercial city in the island with highways, strategic port, international airport and all the logistics ready, we will make this happen.’⁴ Namal Rajapaksa’s long-term view is to continue where his father has left off, converting Hambantota into a modern city under his leadership, perceived as a difficult and unachievable task by many in Colombo.

When looking at the massive Chinese infrastructure diplomacy carried out at the two global connection hubs, the Hambantota port and Mattala airport, along with other ancillary infrastructure including an international convention centre, cricket stadium, highways, hotels and much more to come, this strategy of the next commercial city in the deep south could perhaps be achieved with Rajapaksa’s leadership. The years of discourse about the political–economic history of the nation led to the shift of the western province dominated economic gravity towards the outer regions. Namal Rajapaksa has taken up this challenging task in his tenth year of political office. The political history of Sri Lanka is such that even the first prime minister, D.S. Senanayake, left his political legacy to his son Dudley Senanayake to continue at the age of 41 in 1952. While the context is different, the patterns could continue in the Sri Lankan political culture.

STRATEGIC ALIGNMENTS TO THE QUAD

In the larger ocean space, the US is moving more of its military assets towards the Indo-Pacific. USS Nimitz, the largest of its aircraft carrier warships, arrived in the Indian Ocean for a passing exercise (PASSEX) with the Indian Navy off the coast of Andaman and Nicobar Islands in July 2020.⁵ Together with USS Nimitz, two other US aircraft carriers were in the region, USS Theodore Roosevelt and USS Ronald Regan, to counter the People’s Liberation Army Navy (PLAN). There is a triangular power projection in the Indian Ocean from the US, India and China, which is more prone to conflict as the US allies formed a NATO-like military alignments to contain China. In an interview in July 2020, Indian Minister of External Affairs Dr S. Jaishankar explained, ‘The rise of China has impacted the entire world; more than any other nation, it has impacted its neighbour, India. China’s significant growth is felt and understood by India.’⁶

The trilateral naval exercise could expand to a quadrilateral, bringing the Australian Navy along with that of India, US and Japan for the first time. This would push India towards a security tension with China as it is already negotiating its northern border dispute with it. India, at the same time, will bring Australia to engage in a wider containment strategy in the Indian Ocean. The quadrilateral exercise will be seen by China as a thinly disguised strategy of containment. The consequence was rightly assessed by analyst Abhijit Singh, who said, ‘India should be cautious to such quadrilateral engagement without a cost–benefit exercise and commensurate gains in the strategic–operational realm. Further, this exercise could be ineffective in the long term.’⁷

The tense Indo-Pacific region provides a possible casus belli if containment of China intensifies. China may employ its newfound muscle to forcefully impose its will to resist even modest aggression in the region by the US. After four decades, there is a downward spiral in the relationship between US and China, escalating to the level of closing down the Chinese consulate in Houston. The US, for its part, will not abandon its allies who are opposed to Chinese expansion in the Indo-Pacific. In a recent statement, Chinese Foreign Minister Wang Yi said, ‘Unilateralism and bullying are forcing their way in the world. An international disorder is more possible than ever.’⁸ While the forces for contention remain, as explained by Minister Wang Yi, it is important to explore possible strategic space to minimize the tension.

China is already in the Indian Ocean, which is far away from its traditional ocean space. India has looked beyond Aden and Malacca choke points and has begun to make naval forays into the Pacific Ocean, rightly assessed by C. Raja Mohan in his book Samudra Manthan (Churning of the Ocean).⁹ Maritime strategic expansion requires allies and littorals who are strategically located. Sri Lanka was mapped by Beijing’s strategic circle to facilitate the Chinese expansion in the Indian Ocean. In the same way, India is developing Australia and Japan as its close maritime partners to expand its presence in the Pacific Ocean. Military logistics agreements and military exercises