2020 presidential election: Ranil vs. Gota or ...
As I have mentioned in a previous article (Mirror Business, March 19, 2019), it appears that President Maithripala Sirisena is now spending the last few months of his tenure. Unless re-elected, which again looks a possibility too remote, he will be history after January 2020.
A presidential election should be and we assume, will be called before the end of this year. The outcome of it will most probably decide the path of the government for the next five years, from 2020-25 or even more.
The general election and provincial council elections that follow might have some impact but the presidential election will be the key, even the elected president, thanks to 19A, not enjoying the full executive powers as his/her predecessors did.
Still it is too early to predict the contestants of the two major political camps. The United National Party so far officially backs its leader Prime Minister Ranil Wickremesinghe. Former President Mahinda Rajapaksa’s constitutional entrave to contest has brought several names up from the opposite camp. Right now, former Defence Secretary Gotabhaya Rajapaksa’s name tops the list. These two names might or might not change. For convenience, as of the moment of penning this, let’s assume they are the possible candidates.
Interestingly, that is only one way of looking at the 2020 presidential election. What more ways could we think of?
Note we no longer live in that isolated local environment that we used to live in 1960s and ‘70s. Then Sri Lanka was a tiny peaceful island nation in the Indian Ocean with only two superpowers, one North American and the other European. Those two had little no reason to worry about our internal affairs.
The geopolitical environment has drastically changed since then. Not only we do have two Asian superpowers today but also Sri Lanka does appear in their separate politico-economic maps too visibly. So, it would be a true surprise if they are not interested.
While Chinese Dragon flies with his wings spread...
With over a 1.4 billion heads, China is the world’s most populous nation. What makes China so powerful is not this population but its sheer economic power. Since the introduction of economic reforms in 1978 under Chairman Deng Xiaoping, China’s economy has been one of the world’s fastest growing. Its annual growth rates consistently remained above 6 percent for this entire period. China’s GDP has grown from US $ 150 billion in 1978 to US $ 12 trillion by 2017.
Since 2010, China has been the world’s second largest economy by nominal GDP and since 2014, the largest economy in the world by purchasing power parity. China is also the world’s largest exporter and second largest importer of goods. Why mince words? China is big. Super big.
With that enormity, it is natural that China’s economic interests go far beyond its own borders. The Go Out policy, an effort initiated in 1999 to promote Chinese investments abroad, has since put in place a number of mechanisms to assist national enterprises in developing a comprehensive strategy exploiting opportunities in the expansion of international markets.
Since the launch of the Go Out policy, interest in foreign investment by Chinese companies has increased significantly, especially among state-owned enterprises. In 2005, a key year, China had made 13 deals worth more than US $ 100 million. By mid-june 2018, more than 1,400 projects have been carried out in 120 plus countries, with a growing presence in Europe, Africa and the Middle East. Only a handful of countries escaped the Chinese hands: investments are made even in North Korea in the railway sector.
In Sri Lanka, China has already graciously funded (through loans, of course) inter alia an international seaport, the second international airport in Mattala, a 300 MW power plant, a portion of the island’s first highway, a cricket stadium and the National Performing Arts Theatre. In short, nearly 70 percent of the country’s infrastructure projects for the period 2005-14 were funded and built by China.
Unconfirmed reports said, at one point, more than 5,000 Chinese citizens were employed in projects here. The total Chinese investment during this period is not fully known. One researcher puts it around US $ 5 billion – not insignificant for a US $ 87 billion economy.
The most controversial among all recent Chinese projects was the Colombo Port City project – to be built by China Communication Construction Company, a subsidiary of China Harbour Engineering Company, in cooperation with the Sri Lanka Ports Authority. The project will cost US $ 1.4 billion to complete.
It was supposed to be completed within a period of 40 months, at the time of the change of government but went to a deadlock situation for a brief period. The new administration officially informed the Chinese investors of resuming construction only in March 2016, more than one year after its suspension.
The ‘Yahapalanaya’ government was also successful in late 2017 in signing a lease agreement with China for handling the strategic port of Hambantota, for 99 years. This was perhaps the best approach one could anticipate. Still there were accusations that China was practicing debt-trap diplomacy.
The famous New York Times article ‘How China Got Sri Lanka to Cough Up a Port’ by Maria Abi-habib claimed China’s financial support to at least 35 ports around the world, mostly in Africa, the Middle East and Europe. The Hambantota Magampura seaport is one key example.
The port’s strategic location and subsequent ownership by China triggered concern over China’s growing economic footprint in the Indian Ocean and speculation that it could be used as a naval base for the Chinese Navy. The Sri Lankan government however has maintained that it would be “purely intended for civilian use”.
It has been estimated that around 8-9 percent of Sri Lanka foreign debt is to China. Also noteworthy that repayment of Chinese loans largely happens during the next five years.
Indian elephant too trumpets with his trunk raised
India too is big but doesn’t come closer to China in its foreign trade or offshore investments. India, with the population of over 1.3 billion, still struggles hard to come out of its traditional agriculture setup. (Nearly half of its workforce is still in agriculture). While India too has maintained a continuous growth which averaged nearly 7 percent from 1997 to 2018, per capita GDP of world’s largest democracy at US $ 1,939 is still below the world average.
India’s economic growth, says CIA World Factbook, slowed temporarily in 2011 because of a decline in investment caused by high interest rates, rising inflation and investor pessimism about the government’s commitment to further economic reforms and about slow world growth.
Investors’ perceptions of India improved, it continues, in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Growth rebounded in 2014 through 2018. Five years after Prime Minister Narendra Modi assuming office in 2014, both Indian economy and Indian rupee looks far better than they were then.
India, unlike China, is still not in a position to make sizable investments overseas. It has more local problems. However, this does not mean India is not interested in economic activities of Sri Lanka. India since the time of ‘freedom at midnight’ and probably even before, has seen itself as Big Brother in the South Asian region.
At the time of the Indian Independence Movement, a certain school advocated for Akhand Hindustan or Akhand Bharat irredentist terms literally meaning ‘Undivided India’. This concept sees total India as an extensive assemblage of territories currently belonging to Pakistan, Bangladesh, Nepal, Bhutan and Sri Lanka.
While the ideas have not gone mainstream, call for creation of the Akhand Bharat has on occasions been raised by Indian Hindutvawadi cultural and political organisations such as Rashtriya Swayamsevak Sangh, Vishwa Hindu Parishad and even Bharatiya Janata Party.
Even for one who completely ignores this movement, India’s trade interests in the region are a fact. Take Nepal for instance. India is Nepal’s foremost trade partner. Indo-nepal trade continues to remain massively in India’s favour. As a landlocked country Nepal has to heavily depend on India for its international trade.
The two countries maintain over US $ 6 billion official bilateral trade, while the unofficial trade too is also estimated to be about the same. (They share a more open border). Indian currency notes were extensively used in Nepal till Nepal government formally advised not to use them in December 2018.
India, as of 2017, was Sri Lanka’s major trade partner too with US $ 5 billion bilateral trade. It amounts to 16 percent of Sri Lanka’s external trade. This too is largely in India’s favour. As an export destination, India comes only third in the list with 6 percent after the USA (26 percent) and Europe combined (9 percent).
In imports, India is the main source with US $ 4.5 billion (22 percent of all imports). We import petroleum products, rice, base metals and building material from India among others. Auto rickshaws, motorcycles and scooters of Indian origin are omnipresent in Sri Lankan cities and towns.
India has shown keen interest in free trade agreements with Sri Lanka. India-sri Lanka Free Trade Agreement has been signed in 1998. It provides duty free concessions to a wide range of products traded between the two countries. India is also in the process of negotiating more comprehensive economic cooperation arrangements with Sri Lanka in services, investment and economic cooperation.
Are we truly important to China and India?
One customary argument is on Sri Lanka’s geographical position. One can say the inverted mango shaped island is strategically important in a conflict situation between two superpowers. This argument is weak. The probabilities of having such an international conflict at a time like now are minimal.
The modern world sees conflict unneeded and detrimental. It also has adequate machinery to discerningly avoid a conflict. No. There are absolutely no chances of China and India declaring war against each other for the next 20-25 years. Forget about that possibility.
Also note the recent advancement of military technologies have entirely transformed the battlegrounds both in sea and air. Now both sea vessels and aircraft can travel long distances without the need for refuelling. There are effective workarounds too unlike in the WW II times. So, as earlier, there is no need for ‘local associates’. So, Sri Lanka’s geographical potion is of little use for anybody militarily - at least in the near future.
On the other hand, Sri Lanka’s position is important for at least one superpower in its international trade. The new Silk Road or the Belt and Road Initiative (BRI), also known as the One Belt One Road is a set of both sea and rail links between China and Europe via Kazakhstan, Russia, Belarus, Poland, Germany, France and the United Kingdom.
‘Belt’ refers to the overland routes for road and rail transportation, called ‘the Silk Road Economic Belt’; whereas ‘road’ refers to the sea routes or the 21st Century Maritime Silk Road. This ambitious project of the Chinese government will connect nearly 70 national economies representing over 60 percent of global GDP.
In addition to improving rail connectivity, it is also a development strategy to promote broadbased country-to-country cooperation across Eurasia and strengthen China’s position in the region. If one were to carefully look at the map, one sees Sri Lanka distinctly in the middle of the new Maritime Silk Road, as it was ancient one.
India’s interest on the other hand will be somewhat political. Sri Lanka’s ethnic clashes have been historically influencing Tamil Nadu politics. Sri Lanka has predominantly appeared in its election map for the last three to four decades. This Southern state with a 72 million population is of extreme importance to Indian national politics. So we can assume India would be interested in some control of the island. At least India’s interest will be to see a more minority-friendly president in Sri Lanka.
Is India interested in Sri Lanka on trade terms? May be, but that is at micro level, not macro. For a US $ 2.6 trillion economy, a US $ 87 billion one appears too tiny. India can do without Sri Lanka. We don’t add value to Indian economy seriously.
The opposite is different. India, in trade terms is of immense importance to Sri Lanka. Sri Lanka can never grow significantly if we continue to keep South India out of the equation. Without South India, we will be as isolated as we are now. Immense are the benefits if Sri Lanka can receive if we were to plug ourselves to the supply chains of this giant market at our very doorstep.
Possible strategic moves of China and India
In her New York Times article Maria Abihabib tells multiple ways China attempted influencing the outcome of 2015 presidential election. She says, [quote verbatim] “During the 2015 Sri Lankan elections, large payments from the Chinese port construction fund flowed directly to campaign aides and activities for Rajapaksa, who had agreed to Chinese terms at every turn and was seen as an important ally in China’s efforts to tilt influence away from India in South Asia.”
She continues, “With 10 days to go before polls opened, around US $ 3.7 million was distributed in checks: US $ 678,000 to print campaign T-shirts and other promotional material and US $ 297,000 to buy supporters gifts, including women’s saris. Another US $ 38,000 was paid to a popular Buddhist monk who was supporting Rajapaksa’s electoral bid, while two checks totalling US $ 1.7 million were delivered by volunteers to Temple Trees, his official residence.”
These accusations were vehemently denied by the Rajapaksa camp, but if at all it happened, a repetition of history could be likely. (Please note the word ‘IF’) China sees any Rajapaksa as their ally. We can safely assume China would be happy to see a Rajapaksa in power again. Whether they would attempt to influence the outcome and what measures they would use is up to one’s imagination.
Then to India. If it really wants, India possesses other means of influencing the outcome of a local election. They may not even involve massive campaign funding. More than one minority group in Sri Lanka are culturally attached to the ‘Big Brother’. They prefer watching South Indian TV channels over local ones. They listen to South Indian radio channels.
They may even depend on South Indian online new channels, than local ones. So, India, if it wants, already has direct and strong communication channels established. That is its ‘soft power’; India only needs to decide when and how to use this ‘soft power’.
Because of Sri Lanka’s trade and political importance in the decade to come, it could be possible that both superpowers will try influencing the 2020 presidential election outcome in their favour. When and how they would do it is a different question. It could also be possible both superpowers would see allies in the two key contenders. If the choice were likely between Prime Minister Ranil Wickremesinghe and former Defence Secretary Gotabhaya Rajapaksa, as it appears today, it would be easy for both camps to select their own horses to support.
So when you get the ballot paper in your hands, remember you just don’t vote for a name that appears in it. Indirectly you might be selecting the superpower that would decide our fate for the next five to 10 years or even more. I don’t say that in a negative note. Associating with any of the two superpowers has its own advantage but in two different ways.
It is you who should decide whether it is India or China rather than Ranil or Gota (or any other name - not too significant). I guess, that will be the whole idea of having the ‘presidential’ election’.