‘Sri Lanka’s Economic Crisis: The Chinese Model in Operation’, E-IR, 5 April 2022.

The unrest created by the ongoing economic crisis in Sri Lanka has now resulted in the imposition of a political emergency over the island. The causes for the crisis are many and China has been criticised regularly in recent years for being at least partially responsible for Sri Lanka’s ballooning external debt and for the predatory behaviour that has followed such as its 99-year lease over the port of Hambantota and thousands of acres of agricultural land around it. This article will, however, focus, not so much on the economic aspects of the China-Sri Lanka relationship as on the political behaviour and approaches that have come to increasingly underpin these aspects. Given the history of Indian involvement in Sri Lanka, greater concerns over India’s influence than over Chinese influence are natural in the island nation.

India’s multi-billion dollar support during the current crisis notwithstanding complaints have been raised over the lack of transparency in several major agreements the Sri Lankan government has signed of late with Indian government or private entities including for the development of the Trincomalee Oil Tank Farms, and for energy projects in the north and east of the country. Similarly, members of the Sri Lankan opposition have criticised two maritime security pacts signed with India in March as “threats” to Sri Lanka’s national security and sovereignty. A specific concern was even raised about a regional war with “India… controlling Sri Lankan waters and skies, while China controls the port in Hambantota”.

India has made no bones of the rivalry it perceives with China – a Chinese plan to develop a hybrid energy project in the Northern Province of Sri Lanka was scrapped, reportedly due to Indian objections and at the Munich Security Conference in February 2022, Indian External Affairs Minister S. Jaishankar hinted loudly at the negative fallout of China’s presence in Sri Lanka saying, “We have seen countries, including in our region, being saddled with large debts.”

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