In­dian un­ease at China’s re­gional road,port in­fra­struc­ture deals

The Sunday Independent - - DISPATCHES -

LATE last month, the Sri Lanka govern­ment handed over con­trol of the strate­gi­cally im­por­tant Ham­ban­tota port that juts out into the In­dian Ocean on a 99-year lease to a Chi­nese com­pany. Con­sid­ered im­por­tant for China’s much vaunted Belt and Road Ini­tia­tive (BRI), the Ham­ban­tota deal has given a new spin to the fierce con­tes­ta­tion that has been tak­ing place be­tween India and China, in­clud­ing on the cold and frosty Hi­malayan plateau.

New Delhi dis­likes its South Asia neigh­bours to do busi­ness with China as it fears it could be­come a pre­cur­sor to mil­i­tary part­ner­ships that could di­min­ish India’s in­flu­ence. These fears may or may not be mis­placed, but the neigh­bours are slowly learn­ing to do busi­ness with the Asian pow­ers. This has not been easy.

The ear­lier Sri Lanka govern­ment of Mahinda Ra­japakse was per­ceived un­kindly by the In­dian govern­ment when it al­lowed Chi­nese in­vest­ments in the Colombo port city and in other projects. What riled India more was that a Chi­nese sub­ma­rine paid a visit to the Colombo port. Ra­japakse lost the elec­tions and he blamed India .

Ham­ban­tota and other in­fras­truc­tural projects that were ini­ti­ated to re­con­struct post-war Sri Lanka by tak­ing a hefty $8 bil­lion loan from China, was his legacy. Soon the new govern­ment of Pres­i­dent Sirisena and Prime Min­is­ter Ranil Wikremesinghe re­alised their govern­ment or econ­omy did not have the depth to ser­vice its debt. It was then that this clam­our be­gan to res­cue the port and the econ­omy lest it went into a spi­ral of debt.

The choice to re­turn to the Chi­nese for help to re­struc­ture its debt into eq­uity was due to the fail­ure of the govern­ment to raise funds from else­where. Some thought that if India was so keen to pre­vent Colombo be­ing en­ticed by China then they should have put money where their mouth is. Quite ob­vi­ously, India did not have the funds to walk the talk. It failed to show them the money and hence had lit­tle moral author­ity to ques­tion how Sri Lankan lead­er­ship was sort­ing out its debt is­sues.

This was ev­i­dent when some in­flu­en­tial Sri Lankan voices opined sim­i­lar views on India, when the lo­cal me­dia ques­tioned them about the grow­ing Chi­nese in­flu­ence on the is­land.

In this con­tro­ver­sial deal, for $ 1.1 bil­lion, Sri Lanka has given a 70% stake in the port author­ity to the Chi­nese com­pany and 6 000ha of land, which will be used for set­ting up a spe­cial in­dus­trial zone.

Tak­ing cog­ni­sance of In­dian sen­si­tiv­i­ties, the port would only be used for com­mer­cial ves­sels and naval ships would not be per­mit­ted there. The Sri Lankan navy will pro­vide pro­tec­tion.

De­spite its man­i­fest se­cu­rity and com­mer­cial im­pli­ca­tions, India has not re­acted of­fi­cially to the Sri Lankan de­ci­sion to give own­er­ship of such an im­por­tant port to a Chi­nese com­pany. Per­haps it has some­thing to do with the con­ces­sion that New Delhi has had for long years, to op­er­ate a tank farm in the equally strate­gic Trin­co­ma­lee port.

How­ever, with­out nam­ing Sri Lanka’s sale of its port, India has used it as an ex­am­ple of why it is op­pos­ing the BRI of China. The BRI con­fer­ence in Bei­jing ear­lier this year was boy­cotted by India as it claimed the grand pro­ject could un­der­mine the sovereignty of par­tic­i­pat­ing coun­tries.

China has in­vested $61bn in an am­bi­tious 3 200km road cor­ri­dor called China Pak­istan Eco­nomic Cor­ri­dor (CPEC) that would link the Gwadar port in Pak­istan to that of Kash­gar in its Xin­jiang prov­ince. Af­ter the pro­ject is com­pleted, Pak­istan may have to pay $8bn as debt. Ques­tions have been raised whether a the coun­try would have the abil­ity to ab­sorb such a big in­vest­ment. Be­sides is­sues of re­gional de­vel­op­ment, there is plenty of chat­ter on what China ex­pects from this grand pro­ject.

Ex­posés in Pak­istani news­pa­pers re­veal CPEC is not just for road con­nec­tiv­ity or help­ing China to ferry oil from the gulf , but a lot more. China would not just help Pak­istan fight ter­ror, but also use the agreement to grow food for its peo­ple on Pak­istani soil.

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