Sri Lanka after Rajapaksa: Can it Ignore China?

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No potential conflict of interest was reported by the author.

Notes

1. Under this agreement Sri Lanka was guaranteed 270,000 metric tons of rice each year for five years, and China agreed to buy 50,000 metric tons of Ceylonese rubber each year over the same period. In 1952, Sri Lanka was facing a shortfall of rice to feed all its population as the world market price of rice had risen by 38 per cent between 1951 and 1952. At the same time, purchase of natural rubber by the USA from Sri Lanka had declined. A decline in exports caused a foreign exchange crisis in the country. At this point, on the other hand, the UN through a resolution put a sanction on the sale of rubber to China. In other words, Sri Lanka needed rice and China needed rubber. This crisis, in both the countries, resulted in the rubber-rice agreement.

2. The US decreased its aid to Sri Lanka after then Prime Minister Sirimavo Bandaranaike, leader of the socialist Sri Lanka Freedom Party (SLFP), decided to nationalise Sri Lankan oil companies in the 1960s. India had imposed certain conditions pertaining to its own security in return for extending support to Sri Lanka in its war against Tamil militancy in 1987. The conditions were mentioned in the letters annexed with the 1987 Indo-Lanka Accord.

3. External Resource Department, Global Partnership towards Development, Ministry of Finance and Planning, Government of Sri Lanka, Colombo, 2013, at http://www.erd.gov.lk/files/FM-Global%20Partnership-Book-English.pdf (Accessed February 20, 2016).

4. External Resource Department, Global Partnership Towards Development, 2012, Ministry of Finance and Planning, Government of Sri Lanka, Colombo, 2012, at http://www.erd.gov.lk/files/ERDBudget_English2012.pdf (Accessed February 20, 2016).

5. Ibid.

6. US$1.3 billion was spent on Hambantota Port and $220 million on Mattala Airport.

7. Roy Silva, ‘Seven Investors to Bring in US$514.8m: Dr Wickrama’, The Sunday Leader’, December 9, 2012, at http://www.thesundayleader.lk/2012/12/09/seven-investors-to-bring-in-us514-8m-dr-wickrama/ (Accessed May 20, 2016)

8. ‘SLPA Unveils 7-yr Corporate Plan’, The Daily Mirror, August 1, 2013, at http://www.dailymirror.lk/33164/slpa-unveils-7-yr-corporate-plan- (Accessed August 4, 2013).

9. Rohan Gunasekara, ‘Shipping Focus: The Unexpected Rise of Hambantota Port’, Automotive Logistics, December 17, 2014, at http://automotivelogistics.media/intelligence/the-unexpected-rise-of-hambantota-port (Accessed December 29, 2014).

10. ‘Only Two Foreign Carriers Fly to Mattala Airport Now- Report’, adaderana.lk, February 8, 2015, at http://www.adaderana.lk/news/29720/only-two-foreign-carriers-fly-to-mattala-airport-now-report (Accessed February 9, 2015).

11. Camelia Nathaniel, ‘Norochcholai Debacle Continues’, The Sunday Leader, February 15, 2014, at http://www.thesundayleader.lk/2014/01/19/norochcholai-debacle-continues/ (Accessed February 16, 2014).

12. According to State Minister Sujeewa Senasinghe, China will not be able to dock ships or planes without prior permission from the government under a revised agreement. It was also decided to not offer any land to China on a freehold basis. For details see, ‘Colombo Port City: Govt. Says China Won’t Have Outright Ownership under Revised Agreement’, Colombo Telegraph, November 1, 2015, at https://www.colombotelegraph.com/index.php/colombo-port-city-govt-says-china-wont-have-outright-ownership-under-revised-agreement/ (Accessed March 3, 2016).

13. ‘Joint Statement between the People’s Republic Of China and the Democratic Socialist Republic of Sri Lanka at the Conclusion of the Official Visit of Prime Minister Ranil Wickremesinghe’, Ministry of Foreign Affairs, Government of Sri Lanka, April 9, 2016, at http://www.mea.gov.lk/index.php/en/media/media-releases/6452-jointstatement-slpmvisitchina (Accessed April 16, 2016).

14. Central Bank of Sri Lanka, Economic and Social Statistics of Sri Lanka 2015, Statistics Department, Government of Sri Lanka, Colombo, 2015, at http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/statistics/other/econ_&_ss_2015_e.pdf (Accessed January 16, 2016).

15. Sirimevan Colombage, ‘Foreign Debt Commitments Trigger Macro-financial Risks’, The Sunday Times, February 21, 2016, at http://www.sundaytimes.lk/160221/business-times/foreign-debt-commitments-trigger-macro-financial-risks-183602.html (Accessed February 22, 2016).

16. Central Bank of Sri Lanka, no. 14.

17. Sirimevan Colombage, no. 15.

18. Kapila Bandara, ‘Lanka Piles More Billions onto Foreign Debt Load’, The Sunday Times, November 8, 2015, at http://www.sundaytimes.lk/151108/news/lanka-piles-more-billions-onto-foreign-debt-load-171069.html (Accessed November 9, 2015).

19. Ibid.

20. Quoted in Debasish Roy Chowdhury, ‘Let Bygones Be Bygones, Colombo Urges Beijing, as Chinese Loans Take Their Toll’, South China Morning Post, October 18, 2015, at http://www.scmp.com/business/global-economy/article/1869177/let-bygones-be-bygones-sri-lanka-urges-china (Accessed February 26, 2016).

21. Ibid.

22. So Deputy Head of Mission at the Chinese Embassy in Sri Lanka, Ren Faqiang, said in an interview with The Sunday Leader. See the full interview in ‘We Have No Hidden Agenda in Sri Lanka’, The Sunday Leader, April 12, 2015, at http://www.thesundayleader.lk/2015/04/12/we-have-no-hidden-agenda-in-sri-lanka/ (Accessed April 15, 2015).

23. ‘Chinese Firm Claims Heavy Losses after Sri Lanka Halts Port Project’, The Economic Times, March 12, 2015, at http://articles.economictimes.indiatimes.com/2015-03-12/news/60047891_1_port-project-chinese-firm-suspension (Accessed July 7, 2015).

24. ‘IMF Warns Lanka Facing Higher Financial Risks’, Colombo Gazette, December 10, 2015, at http://colombogazette.com/2015/12/10/imf-warns-lanka-facing-higher-financial-risks/ (Accessed December 11, 2015).

25. ‘Sri Lanka Forex Reserves Drop by a Billion Dollars to US$6.3bn in Jan’, Sri Lanka News Web, February 8, 2016, at http://lankanewsweb.net/featured/item/2248-sri-lanka-forex-reserves-drop-by-a-billion-dollars-to-us-6-3bn-in-jan (Accessed March 3, 2016).

26. The terminal will be built with a total investment of US$80 million and will have a storage capacity of 30,000 metric tons at the initial stage with provision to expand the storage capacity by an additional 15,000 metric tons. ‘Sri Lanka’s LAUGFS to Build US$ 80 Million LP Gas Terminal at Hambantota Port’, Colombo Page, November 17, 2015, at http://www.colombopage.com/archive_15B/Nov17_1447779463CH.php (Accessed November 18, 2015).

27. ‘Sri Lanka Expects 6.0-pct Growth in 2016, Higher with China FDI: CB Governor’, Economy Next, February 26, 2016, at http://www.economynext.com/Sri_Lanka_expects_6.0_pct_growth_in_2016,_higher_with_China_FDI__CB_Governor-3-4351.html (Accessed March 4, 2016).

28. The Sunday Leader, no. 22.

29. Ranil Senanayake, ‘Port City Project to Resume: SL Ambassador to China’, Colombo Telegraph, January 17, 2016, at https://www.colombotelegraph.com/index.php/port-city-project-to-resume-sl-ambassador-to-china/ (Accessed March 3, 2016).

30. ‘Sri Lankan Prime Minister Presents Plans for a Strong Economy’, Colombo Telegraph, November 5, 2015, at http://www.colombopage.com/archive_15B/Nov05_1446733671CH.php (Accessed November 8, 2015).

31. Saman Kelegama,‘Challenges Remain for China–Sri Lanka FTA’, East Asia Forum, March 28, 2014, at http://www.eastasiaforum.org/2014/03/28/challenges-remain-for-china-sri-lanka-fta/ (Accessed January 16, 2016).

32. ‘Sri Lanka, China Discuss Beginning Negotiations on Proposed Free Trade Agreement’, News Line, July 3, 2014, at http://www.priu.gov.lk/news_update/Current_Affairs/ca201407/20140703sl_china_discuss_beginning_negotiations.htm (Accessed December 15, 2014).

33. ‘China Offers to Assist Lanka Maximize Potential’, Colombo Gazette, November 23, 2015, at http://colombogazette.com/2015/11/23/china-offers-to-assist-lanka-maximize-potential/ (Accessed November 24, 2015).

34. Sri Lanka Tourism Development Authority, Annual Statistical Report 2014, Government of Sri Lanka, Colombo, 2014, at http://www.sltda.lk/sites/default/files/Annual_Statistical_Report-2014.pdf (Accessed January 6, 2016).

35. Ben Blenchard, ‘Sri Lanka Requests Equity Swap for Some of its $8 Bln China Debt’, Reuters, April 9, 2016, at http://www.reuters.com/article/china-sri-lanka-idUSL3N17B1BR (Accessed April 16, 2016).

36. Ibid.

37. Ravi Vellor, ‘Sri Lanka to Allow Chinese Submarines to Visit, Says PM Wickremesinghe’, The Straits Times, October 18, 2015, at http://www.straitstimes.com/asia/south-asia/sri-lanka-to-allow-chinese-submarines-to-visit-says-pm-wickremesinghe (Accessed March 3, 2016).

38. Suhasini Haidar, ‘India Kicks Off Raisina Dialogue’, The Hindu, March 2, 2016, at http://www.thehindu.com/news/national/india-kicks-off-raisina-dialogue/article8301235.ece (Accessed March 6, 2016).

39. ‘India-Sri Lanka ETCA to Benefit All: Indian Envoy’, The Economic Times, March 20, 2016, at http://articles.economictimes.indiatimes.com/2016-03-20/news/71678671_1_indian-envoy-sinha-draft-framework (Accessed March 26, 2016).