17 January 2023 12:10 am Views - 557
On April 12, 2022, our then government announced Lanka was bankrupt. It suspended repayment of external debts admitting the country would be unable to honour its international commitments - nearly US$ 6 billion in debt servicing that year and US$ 25 billion till 2026.
Government leaders and bureaucrats added that we would be seeking assistance from the International Monetary Fund (IMF).
What followed were rolling 8 to 9-hour power cuts, long and winding queues at petrol sheds, people desperately searching for gas cylinders and empty shelves at supermarkets and a shortage of medicinal drugs.
By May, daily protests forced the Prime Minister and President out of office and saw the installation of Ranil Wickremesinghe as president of the country. The violent protests which had wracked the country were brought to an end.
Thanks to a credit line extended by India, food, fuel, gas and medical crisis subsided, though costs continue to be way beyond the reach of a large section of the population.
On Thursday, India’s External Affairs Minister (EAM) S. Jaishankar is expected in the country, with a view to focus efforts on ways and means to support our ailing economy get back on its feet.
The first priority will be seeking India’s help in restructuring Lanka’s international debt. The country will be holding its collective breath in anticipation of a positive outcome from India to the country’s requirements.
India has already contributed a package of nearly US$ 4 billion in loans and credit line for the purchase of essentials such as fuel, gas and food. The fact that limited stocks of fuel, food items and essential drugs are available in the country, is by and large thanks to India’s goodwill.
Our application for an IMF restructuring facility too needs India’s support in the form of written assurance, as India together with China, is one of the big three creditors to the country. Historically, Sri Lanka has enjoyed cordial relations with our giant neighbour.
A slight aberration was seen during the period of the ethnic conflict. However, India soon proved to be the biggest help in bringing the war to an end with precise intelligence reports which helped in the destruction of the LTTE (Liberation Tigers of Tamil Eelam) floating arsenal.
What is unfortunate though is some opportunistic politicians tend to raise the bogey of Indian intervention in our country’s affairs to further their own private agendas. It is really the time that ‘we the people’ differentiate our friends from foe. It is also time we drop our colonial mentality - searching for solutions from the West.
Here again, India has led the way. The West’s attempts – nay – demands, we sever connections with Russia because of the war in Ukraine. Challenged on this score Mr. Jaishanker put things in perspective while addressing a group of journalists who raised the issue.
India’s EAM emphasized, India’s foreign relations policy is, and always will be, ‘India first’. He also pointed out that while the West calls for a boycott of Russian oil and gas, those countries continue to purchase these materials to meet their own needs.
Despite India being close to the US administration, it (India) purchases its defence needs too from Russia. In a similar manner, he informed journalists who raised a China bogey, that India and China had long-standing differences, but were able to settle problems without external involvement.
The fact of the matter is that India and China continue to be each other’s largest trading partners, despite other differences. In like manner little Lanka too, needs to be mindful of these nuances and act accordingly. China today is one of our largest creditors. Western media often claim China is blocking the IMF bailout due to its aversion to debt restructuring.
However, president Wickremasinghe himself has confirmed, China too is in discussions as to how they could help ease Lanka’s debt burden. While restructuring of debts are not part of the Chinese lexicon, Wickremesinghe said last week, the government is in discussion with China’s EXIM Bank as to how the problem could be sorted out.
We, in Lanka, have a lot to learn from both the countries. Despite having been at war both India and China, continue trade for their mutual benefit.
We in Lanka need to learn from the experience of these powers and negotiate for our own benefit. The conflicts between Western European countries and the US on the one hand, and Russia and China on the other, are not our problem. Like India, we need to balance our alliances with our own needs.