4 September 2023 12:02 am Views - 872
In April 2022 our country declared itself bankrupt and informed its international creditors that we would not be able to repay loans as scheduled. In simple language, we were cash-strapped. Sad but true after seventy-five years of independence, we still need to import our staple food, among other essentials to feed our people.
We had to eat humble pie and beg the International Monetary Fund (IMF) for a facility to reschedule our debt repayments, and help us out of the mess our political leaders had got this country into.
In the meantime, the country faced rolling 12-hour power cuts, faced shortages of food, medicines, fuel, LP gas and every necessity we needed.
It was in this background, India backed our application for a facility to reschedule debts from the IMF.
Our external debt totalled $35.1 billion at the end of September last year, China was the biggest bilateral creditor, followed by Japan and India. In total, our country owed Chinese lenders $7.4 billion, or nearly a fifth of our public external debt.
India also extended to us a $4bn in emergency assistance credit line at the peak of our financial crisis last year to import basic necessities.
The fact that we have even limited amounts of food on our table today is largely because of the Indian line of credit. This line of credit has also been used to bring down urgently needed supplies of medicines, and purchase of vehicular fuel and LP gas. Within months, the rolling power cuts were reduced and today is a distant memory.
China our biggest creditor, on the other hand, offered us a new loan’ to repay the first loan. However to please other international creditors and make our application for an IMF facility possible, China subsequently agreed to reschedule its loan repayments even though such a system is not common to the Chinese.
Unfortunately for us (Lanka) India and China - both of whom have helped our country out at different times - are oft times at odds with each other. It is in this background we have to navigate a course between the two powers, and it is in this light we have to view the latest crisis in which we as a country are caught up in.
A Chinese ocean research naval vessel Shi Yan 6 is scheduled to dock in our harbour. Our giant neighbour India has raised objections to the entry of this vessel, claiming it has a capacity of gathering intelligence and as such poses a threat to India’s security.
China on the other hand insists the vessel is on a mere ocean research mission and poses no threat to the security of other countries.
What is sad however, is that India despite knowing Lanka’s delicate situation because of our economic plight and indebted situation expects this country to deny the Chinese vessel entry into our ports.
This is not the first time India has made such demands from the Sri Lankan government. Earlier this year, another Chinese research vessel too called at our ports and India protested the visit on the same grounds.
However, the country’s present leadership was able to navigate these troubled waters successfully at that time. We are hopeful that the country’s leadership will be able to ride through the present crisis without treading on the corns of either Chinese or Indian toes as the goodwill of both countries are important to us.
It is well known China has ‘eyes in the sky’ via its satellite surveillance.
The fact of the matter is that China, the US and Russia all have this capacity (eyes in the sky) and do not need to be physically in the vicinity to check out troop movements, or weapons systems as they can track them via their satellites. and India knows this.
On the other hand, it is possible this is China’s way to needle India which seems to be moving closer to the US and the Western bloc.
Whatever the reason, it appears both countries are attempting to use Lanka as a football in their power games.