Like the old Silk Road that stretched from the ancient Chinese capital of Xian all the way to ancient Rome, modern China’s strategic and commercial supply line extends over the Indian Ocean and the South China Sea to include the focal transit port of Sri Lanka at the southern tip of India. With rapidly growing military, diplomatic, and economic ties with China since the brutal 25-year civil war between the Government of Sri Lanka and the Liberation T­igers of Tamil Eelam (LTTE) ended in May 2009, the war-shattered island nation desperately needed foreign assistance to support post-conflict reconstruction, protect war refugees, avoid further crises, and guarantee overall economic development for its highly literate and industrious people.¹

To finance rebuilding efforts, Sri Lanka returned to Washington and borrowed $2.6 billion from the International Monetary Fund (IMF) in July 2009.² Sri Lanka has been under the guidance of the World Bank and IMF (both undergirded by the influence of United States (US) foreign policy) over the past three decades, which has included the austerity measures and conditionality of these two Bretton Woods Institutions’ (BWIs) structural adjustment programmes. It has been a painful experience for islanders whose social welfare in education, health, and agriculture was reduced by structural changes and budget reductions. The conditionality of Washington’s policy prescription has primarily been influenced by American-style trade liberalisation and economic growth stra­tegy, as well as democratic system of governance and transparency.

With the spectacular rise of Chinese economic success, which had opposed the conditionality of the so-called Washington Consensus, Beijing has begun to challenge the trinity of Washington institutions (the World Bank, IMF, and the US department of treasury) by offering concessional financial assistance and commercial loans to other countries, and quietly developing a “string of pearls” naval network in the Indian Ocean. In Colombo, the Sunday Timesreported that China’s Export-Import Bank provided more than $6.1 billion loans in 2009 for post-war development projects – including the Hambantota deepwater seaport – in Sri Lanka; this was more than the loans provided by traditional donors (the US, I­ndia and Japan) combined.³ Unlike the BWIs in Washington, Beijing has no conditions – structural adjustments, policy reforms, competitive biddings, or transparency – attached to their loans (with the exception of employment for 25,000 Chinese workers in Sri Lanka) (ibid). The Sri Lankan ambassador to the US told the New York Times in 2010 that his country “looked for investors in America and around the world, but C­hina offered the best terms”, and “we don’t have f­avorites”.⁴ Indeed, the C­hinese policy of non-interference in domestic affairs and respect for national sovereignty and l­ocal politics is one of the “best terms” for the Sri Lankan government.

Geopolitics vs Geoeconomics

In a comparative analysis, the Beijing o­ffer of $6.1 billion without conditionality over the Washington loan of a strings-attached $2.6 billion was certainly more attractive for President Mahinda Raja­paksa of Sri Lanka. Since the war ended, his leadership has been under heavy criticism for alleged war crimes, human rights violations, nepotism, and corruption by the United Nations, the US, and other western donor countries. For Raja­paksa, according to the British Broadcasting Corporation, there were other reasons to break away from the west: “When money from the west looked as if it may dry up because of concerns over human rights abuses towards the end of the civil war, the president tried to offset this by making overtures to China”.⁵ I­ndeed, the i­nitial assessment of Sri Lanka’s final phase of the war and associated human rights violations was a priority concern for Washington, London, and Geneva. Since the release of the new American “re-charting” strategy for Sri Lanka outlined by the US Senate Foreign Relations Report (also known as the Kerry-Lugar Report) in 2009, the White House, the Pentagon, and the state department began to “reset” the geopolitical priority button: “We cannot afford to ‘lose’ Sri Lanka”⁶ and the US needs to use the island to advance its national security interests in the Indian Ocean.

With the Kerry-Lugar Report, the policy orientation in Washington towards Sri Lanka has changed. According to US State Department, Secretary Hillary Clinton told visiting Sri Lankan External Affairs Minister Gamini Lakshman Peiris in May 2010: “I think that the steps that have been taken by the Sri Lankan government are commendable, and we are supporting that effort. The minister and I talked about the continuing role of the United Nations.”⁷ Clinton reminded the former Rhodes Scholar, “The United States has long been a friend of Sri Lanka. Our countries share a history of democratic institutions, and we have an active USAID programme that has invested more than $1.9 billion in Sri Lanka since 1956” (ibid). Compared to the accumulated amount of less than $2 billion worth of US foreign assistance over the past 50 years, the current Chinese investment of over $6 billion speaks louder for the Rajapaksa administration.

In the midst of competition between Washington and Beijing over Colombo, the Indian perception of a Chinese threat in south Asia has grown highly sensitive; however, New Delhi’s influence over Sri Lanka has been limited and even reluctant to intervene (since the 1989 withdrawal of the Indian peacekeeping troops after a Vietnam-like American debacle).⁸ With the 2008 US-India civil nuclear pact, the two strongest and largest democracies elevated their bilateral trade relations to new heights through unprecedented military and nuclear cooperation.⁹ When the Sri Lankan parliament led by President Rajapaksa’s elder brother and Speaker Chamal amended the constitution in September 2010 to r­emove the presidential term limit and gave the executive extraordinary powers and freedoms over legislative, judi­ciary and electoral appointments, democratic partners in Washington and Delhi expressed grave concerns over the power concentration in the dictatorial presidency. Tisaranee Gunasekara, a res­pected Sri Lankan journalist, characterised the paradox by noting that “more freedom for the Raja­paksas [to make appointments in every branch of government] means less freedom for the Sri Lankan people”.¹⁰ Another Colombo com­mentator in The Island newspaper des­cribed the constitutional amendment as creating “an imperial President”.¹¹ Des­pite such criticism, the speaker of par­liament proudly reminded the world through his official webpage that it is the Rajapaksa family – with nine members in parliament alone – that governs the island of 21 million people.¹² Apart from Sri Lankans, the family-led, authoritarian-type political and economic power structure in the island is an especially worrisome development for over 60 million Tamil neighbours in the Tamil Nadu state and the large Hindu population in the rest of India.

The gamut of these dynamic relationships and developments is not new to Asia. For the greater part of the cold war period, India ironically maintained friendly relations with the former Soviet Union while Sri Lanka aligned more with the US. These mutually beneficial relations in both economic and military affairs were seemingly contradictory to their (India and Sri Lanka) political pledges to the Non-Aligned Movement, their nominal membership as former British colonies in the Commonwealth of Nations, and their roles as protagonists within the concept of an Indian Ocean Zone of Peace.¹³ When the British Empire was eclipsed as a dominant world power, the US gained global supremacy in the post-­second world war era. Sino-American as well as Indo-American relations have reached a critical juncture, particularly after al-Qaida attacked the US in 2001. In the meantime, the US is burdened with the current state of the national debt and the expansive focus of US military involvement in both international maritime security and the global war on terrorism waged within a growing list of countries (Afghanistan, Iraq, Pakistan, Yemen, and elsewhere). As a creditor nation to the US and other countries, China has gained enough econo­mic ascendance to command a new d­irection in global relations and I­ndian Ocean affairs.

The Crown Jewel of the String of Pearls

The strategically-located Sri Lanka is advantageously positioned within the international east-west shipping route in the Indian Ocean. Over 85% of China’s energy imports from west Asia and mineral resources from Africa transit through Sri Lanka and other “string of pearls” ports. As part of its new Silk Road network, Beijing seeks to protect them as strategic economic arteries anchored all the way from Persian Gulf and African waters to the South China Sea. Colonel Christopher Pehrson at the US Army War College described this elaborate network as

the manifestation of China’s rising geo­political influence through efforts to increase access to ports and airfields, develop special diplomatic relationships, and modernize military forces that extend from the South China Sea through the Strait of Malacca, across the Indian Ocean, and on to the Arabian Gulf.¹⁴

To meet increasing demand for resources and to secure their maritime trade routes through the Indian Ocean, China has either built or reportedly planned to construct vital facilities in Bangladesh, Cambodia, Maldives, Myanmar, Pakistan, Seychelles, Sri Lanka and Thailand. China’s comprehensive “string of pearls” naval strategy includes:¹⁵

• A planned oil refinery terminal at Chittagong in Bangladesh, the northern Bay of Bengal located just east of India;

• The reported establishment of a naval base and intelligence surveillance station at Sittwe in Myanmar and in nearby
islands on the Bay of Bengal;

• The reported building of a surveillance base on Marao Island in the Maldives, just north of the British military base leased to US armed forces on the i­sland of Diego Garcia;

• The construction of a billion-dollar deepwater port at Gwadar in Baluchistan province of Pakistan on the Arabian Sea coast close to Iran and the Strait of Hormuz in the Persian Gulf, which will be used as a pipeline terminal to transport crude oil and natural gas from the Persian Gulf to China’s western hinterland and Xingjian; and

• The present construction of a billion dollar all-inclusive deepwater sea port at Hambantota in Sri Lanka.¹⁶

In addition to these projects, China has reportedly been exploring the expansion and establishment of other facilities at eastern and western maritime choking ports of the Indian Ocean – the Gulf of Aden and the Arabian Sea as well as the Strait of Malacca – to address growing piracy issues, especially around Somalia, Indonesia, Malaysia, and the Philippines.¹⁷

The construction of the massive sea port at Hambantota – a small fishing village of 21,000 people on the south­eastern coast of Sri Lanka – is understandably a cause for serious concern in Delhi and Washington. In May 2009,China National News reported that Sri Lanka resorted to generous financial, military, and diplomatic support from China after India and the US declined to assist the Colombo government in defeating the separatist Tamil Tigers.¹⁸ In exchange, China has now begun to reap the benefits of its strategic investment on the island by using the seaport as a refuelling and docking station for the Chinese Navy and commercial shipment. Hambantota is also one of President Rajapaksa’s constituencies and is represented by his 23-year-old son Namal in parliament – an implicit but solid strategy to continue the political dynasty in Sri Lanka.¹⁹

As a deliberate example of family connections, the Rajapaksa administration is globally portrayed as pursuing a dual-edged covert family enrichment and overt national development strategy for Sri Lanka. Besides the Hambantota port, critics argue that China has fin­anced nearly the entire array of Sri Lanka’s other main infrastructure projects – including an oil-storage facility, a new a­irport, a coal-fired power plant, an e­xpressway, and many more. In an internationally-noted article on “The C­olombo Consensus” in The Economist, the editorial revealed that all of these projects are negotiated and managed by the Raja­paksa family.²⁰ With cheap commercial credit and imported Chinese labour, Beijing also builds main roads in war-damaged northern Jaffna and eastern Trincomalee and Batticaloa regions, and constructs a modern performance arts centre in Colombo. China has not only sold diesel railway engines and earthmoving equipment in the name of post-conflict reconstruction, but Chinese com­panies have also invested in electronic and garment-making industries for which the Government of Sri Lanka established a special free-trade zone e­xclusively for China (ibid).

Unlike China, New Delhi leaders have long restrained themselves from direct involvement on the internal affairs of Sri Lanka, especially after Indian Premier Rajiv Gandhi was assassinated by a dimi­nutive Tamil Tiger female suicide bomber in May 1991.²¹ At the same time, Sri Lankan Buddhist and Sinhalese leaders are sensitive to the fact that the island’s northern neighbour Tamil Nadu state – home to more than 60 million Tamils – has a historic kinship with their ethnic and religious counterparts in northern Sri Lanka. More importantly, however, a complex disposition of global geopolitics (e g, the Nobel laureate Dalai Lama and Buddhist followers of his exile Tibetan parliament reside in Dharmasala, near New Delhi) has been a major concern for India – as well as for China.

Given its military and friendship treaty with Russia, for example, India has been preoccupied with balance-of-power politics between the United Kingdom and the United States. India continues to be vigilant about becoming the traditional nexus between London and Washington, whereas the British Navy used Sri Lanka’s natural harbour at China Bay in Trincomalee as a regional naval base until 1957 and it is still being used by visiting US Navy ships for refuelling. In addition, their military outpost on the island of Diego Garcia (leased by London to Washington until 2036)²² is also in close proximity to India and Sri Lanka, and a constant irritant to these Indian Ocean Zone of Peace advocates. As the dominant regional power in south Asia, India is faced with a glut of complex historical issues (like Tibet and Pakistan) and emerging realities (like terrorism and separatism) as China expands its economic and maritime networks in the Indian Ocean and the South China Sea.

Complex Chindian and Chimerican Relations

As the most powerful and largest demo­cracies in the world, the US and India pursue a mutually-reinforcing and beneficial strategy to advance their shared political philosophy. Despite India’s refusal to sign the Nuclear Non-Proliferation Treaty (NPT),²³ the US, for example, agreed anyway to the US-Indian civil nuclear cooperation pact in 2008 and has expanded trade and economic relations between the two countries. As American firms begin to invest in India, Japanese companies have also agreed to invest $10 billion on an “industrial corridor” that extends 1,500 km between New Delhi and Mumbai. With these open economic and trade policies, India has moved away from its historically lethargic “­Hindu rate of growth” and Non-Aligned Movement foreign policy to a more western-oriented and robust economic, diplomatic, and military force on the world stage.

The Beijing leadership has perceived these actions as a sign that the US and its allies (like Japan, South Korea, and Taiwan) are deliberately using India not only as a huge consumer market for their products and services but also as a counterweight to China in south Asia. China has simultaneously agreed to build two nuclear power plants for its traditional ally, Pakistan – the Indian arch-rival. Prevailing criticism of the US-India nuclear agreement has been somewhat muted by the growing nexus of the Sino-Pakistan civilian and military nuclear power program­mes.²⁴ With heavy financial investment in both sectors, China has now become Pakistan’s second-largest economic and trading partner after the US. There are now over 60 Chinese companies with more than 10,000 Chinese workers e­mployed on 122 major deve­lopment projects in Pakistan, including the Gwadar port and Saindak copper mine site in Baluchistan as well as the Gomal Zam dam project in Pakistan’s federally administered tribal areas.²⁵ With a range of massive development and deepwater seaports in Pakistan, Bangladesh, Myan­mar and Sri Lanka, China has actively put forward counterpoised strategies to discourage or limit the American presence in the region.

The US has viewed China’s “string of pearls” strategy not only as a balance of power issue but also as a show of force in the Indian Ocean. Perceived threats made India and Sri Lanka equally ner­vous. With Delhi’s leadership, Indian ships and nuclear-powered US ships participated in a naval exercise alongside Australian, Japanese, and Singaporean ships in the Bay of Bengal in 2007. Moreover, America’s involvement in Afghanistan (and increasingly in Pakistan) and the central Asian republics as well as s­ecurity and military ties to south-east Asian countries (like Indonesia, Singapore and Vietnam) and north-east Asian countries (South Korea, Japan and Taiwan) is more than an emblematic challenge to China’s pronounced “Peaceful Rising” foreign policy. Chinese leaders – especially military officials – feel that the US has encircled them geostrategically with US military bases and is selling advanced weapons to countries like Taiwan (a renegade republic in the Chinese perspective). The construction of a nuclear submarine base on the southern Chinese island of Hainan (where an American spy-plane was forced to land in 2002) is another tactical response to project its growing power and protecting the sea routes.

Adhering to the path of “Peaceful Rising”, China has negotiated a number of settlements of territorial disputes with Russia, Vietnam, and even India. These unprecedented diplomatic acts by Chinese leadership point to a different v­ision of power in international negotiation and diplomacy. At the UN Climate Summit in Copenhagen in December 2009, for example, both China and India – the world’s largest and fourth-largest emitters of greenhouse gases respectively – joined forces to oppose American-led demands for supporting strong anti-global warming measures. At the Cancun climate change meeting in Mexico in 2010, China took a leading role to move forward the global process for a final agreement.²⁶ Such diplomatic triumphs made the evolving scope of international relations more complex and complicated between and amongst the US, China, and India.

For Chindian (Chinese and Indian) leaders, the common problem is job creation for younger populations, which could easily become a source of internal tension and violence. With the growing importance of geoeconomics as oppo-sed to the traditional mindset of geopoliti­cal calculations, Chindia and Chimerica (China and America) seem to now share a common sense of economic progress as a primary requirement of political survival in Beijing, Delhi and Washington. This has been more pronounced in the US since the economic crisis left high un­employment and political frustration (which saw the rise of the Tea Party and the Occupy Wall Street movements) with the Obama administration in its wake. Rapid economic growth rates in Chindia are a positive sign for global development as Chimerica has mutually benefited from a symbiotic economic relationship as the two leading world economies.

China’s advances in manufacturing sectors and India’s progress in information techn­logy will soon be equalised as both countries engage in more trading of goods and services, as if working towards the “Trade for Peace”.²⁷ China’s investment in a “string of pearls” appears to primarily address basic human development concerns and national interests through economic growth followed by human security in the Asian region. The optimism experienced by China, in which more than 250 million people have been lifted out of poverty, is justified not only in Confucian countries like the Asian Tigers (Hong Kong, Singapore, Taiwan, and South Korea) but also in south Asian nations whose economies have opened up to Chinese investment and commerce.

The leading trio – America, China, and India – also shared a common enemy: terrorism both at home and abroad. Having global trade interests and investment opportunities – whether competitive or com­plementary – each nation continuously searches for greater security and stabi­lity in the Indian Ocean r­egion as a prime necessity for their own national progress. President Barack Obama’s visit to China, soon followed by Indian Prime Minister Manmohan Singh’s trip to Washington in November 2009, clearly signified the importance of the Chindian role in south Asian security.²⁸ Some commentators viewed the trajectory of political, military, and economic interdependence as the new pragmatism of cooperation and competition.²⁹ As political alliances have changed vividly with evolving post-9/11 global realities, each nation is presented with new opportunities and challenges. The Obama administration – under pressure from the US Congress – has now begun to recalculate and “reset” its Sri Lanka strategy as a response to Chinese inroads into the Indian Ocean passageway.

US Geostrategic Response to China

Since the terrorist attacks, the Bush administration focused more on “democratic India” and advocated the creation of an “Arc of Democracies”, while justifying and waging two wars in Iraq and Afghanistan.³⁰ Recognising China’s “string of pearls” strategy, President Raja­paksa portrayed Sri Lanka’s ethnic conflict as part of a global war on terrorism. Following victory over the Eelam War facilitated by unconditional military assistance and diplomatic support from China, Rajapaksa cheerfully pointed out that Sri Lanka is “a model for anti-insurgency military campaigns elsewhere”.³¹ When the US criticised the way the Sri Lankan government handled the f­inal phase of the brutal war, Rajapaksa defended his actions, saying: “They are trying to preach to us about civilians. I tell them to go and see what they are d­oing in Iraq and Afghanistan.”³² As a result, the US not only restric­ted its military assistance to Colombo due to concerns over human rights abuses in the bloody war against the most lethal terrorist group in the world (the state department listed the Tamil Tigers – inventors of the suicide bomber – as a terrorist group in 1997), but also protested by dec­lining to vote at the IMF on a $2.6 billion loan to Colombo in July 2009.³³

With the support of UN Secretary General Ban Ki-moon, the Obama admini­stration initially followed a Bush-like foreign policy of isolating Sri Lanka on the grounds of human rights violations and alleged war-crimes committed by both the military and the LTTE. Overriding America’s geopolitical interests in Sri Lanka, the US administration pushed the UN secretary general to appoint an independent panel to investigate the atro­cities committed by each party; C­olombo successfully thwarted Ban K­i-moon’s initiative (with Indian backing and Chinese support) at the UN Human Rights Council in 2009. Despite every diplomatic effort by the Colombo ad­ministration to prevent further UN actions, the UN Human Rights Council in 2012 effectively passed the US-sponsored r­esolution against the Rajapaksa government to inquire into possible war crimes against humanity – with the surprised vote for the resolution by India, and voted against by Russia and China.³⁴

Softer View

Following continued pressure from the US, the European Union and the United Nations, the Government of Sri Lanka did establish the Lessons Learned and Reconciliation Commission (LLRC) with members appointed by President Rajapaksa himself. As the media publicised human rights violations along­side horrible images from Afghanistan and Iraq, the Obama administration took a softer view on Sri Lanka and its challenges.

Acknowledging the uneasy challenges of war situations and geostrategic interests, the US subsequently lent implicit l­egitimacy to LLRC. When the Sri Lankan external affairs minister met with Secretary Clinton on her invitation at the state department on 28 May 2010, the secretary said: “I want to thank Minister Peiris for our productive discussion today and commend him for his commitment to the reconciliation process. The United States pledges our continued support to Sri Lanka.”³⁵ The minister also promised Clinton that detainees would be resettled within three months, but more importantly, he called for “a multidimensional relationship with the United States”, (ibid) suggesting movement b­eyond the human rights issues that had previously captivated the state department and the White House. After learning about the 2 October 2009 WikiLeaks cable, which was written by US Ambassador Patricia Butenis in Colombo, it was assumed that the soft tone in Washington was related to the lobbying effort by Roman Catholic Archbishop Malcolm Ranjith, who reportedly told the am­bassador that “pushing the GSL [Govern­ment of Sri Lanka] too hard on the war crimes accountability issue now could destabilise Sri Lankan democracy and would set back the cause of human rights.”³⁶ The ambassador further ela­borated, “He [the archbishop] reasoned that weakening the Rajapaksas – who despite their public image were relative moderates in the Sri Lankan polity – could backfire. …Sri Lanka could suffer revolution from the right or a coup by the military” (ibid)^. The Archbishop’s office denied the contents of the WikiLeaks cable.³⁷

The primary rationale for rapid policy change was triggered by a bipartisan congressional report, Re-charting US Strategy on Sri Lanka, authored by Senators John Kerry (Democrat) and Richard Lugar (Republican) in December 2009.³⁸ The senators bluntly declared:

As Western countries became increasingly critical of the Sri Lankan Government’s handling of the war and human rights record, the Rajapaksa leadership cultivated ties with such countries as Burma, China, Iran, and Libya. The Chinese have invested billions of dollars in Sri Lanka through military loans, infrastructure loans, and port development, with none of the strings attached by Western nations. While the United States shares with the Indians and the Chinese a common interest in securing maritime trade routes through the Indian Ocean, the US Government has invested relatively little in the economy or security sector in Sri Lanka, instead focusing more on IDPs [Internally Displaced Persons] and civil society. As a result, Sri Lanka has grown politically and economically isolated from the West (ibid: 2-3).

With greater awareness of China’s strategic and long-term geoeconomic foundation in Sri Lanka, the Kerry-Lugar Report made a cautionary note on America’s geopolitical interest and strategy:

President Rajapaksa was forced to reach out to other countries because the West refused to help Sri Lanka finish the war against the LTTE. These calculations – if left unchecked – threaten long-term US strategic interests in the Indian Ocean (ibid: 13).

The two senators concluded: “With the end of the war, the US needs to re-evaluate its relationship with Sri Lanka to reflect new political and economic r­ealities” (ibid: 16)^. Then, they added: “While humanitarian concerns remain important, US policy toward Sri Lanka cannot be dominated by a single agenda. It is not effective at delivering real reform, and it shortchanges US geostrategic interests in the region” (ibid). In the aftermath of the Indian Ocean tsunami in December 2004, it was the American military that quickly reached out to the island and provided much-needed, rapid multi­national relief, humanitarian assist­ance, and rebuilding efforts through the Operation United Assistance coordi­nated by the US Department of Defence.³⁹

Understanding Sri Lanka’s strategic importance to the US, Foreign Minister Peiris reinforced a similar vision outlined by the leading two Democrat and Republican senators. Thus, the minister carefully used the word “multidimensional”⁴⁰ to describe the nature of a new Great Game of larger geopolitical and geoeconomic dynamics in the region i­nvolving China and India.⁴¹ While these countries share strategic interests in s­ecuring the east-west maritime trade route and air navigation (for refuelling and landing rights), the US has invested relatively fewer economic and military resources in Sri Lanka than China. Instead, the US has preferred to focus on political freedom and democracy promotion. Consequently, Sri Lanka’s geo­strategic importance to American security interests – both economic and military – has been undermined. Senators Kerry and Lugar said,

This strategic drift will have consequences for US interests in the region. Along with our legitimate humanitarian and political concerns, US policymakers have tended to underestimate Sri Lanka’s geostrategic importance for American interests.⁴²

They then pointed out that “Sri Lanka is located at the nexus of crucial maritime trading routes in the Indian Ocean connecting Europe and the Middle East to C­hina and the rest of Asia” (ibid). The two senators reflectively added a shared global interest for greater benefit: “The United States, India, and China all share an interest in deterring terrorist activity and curbing piracy that could disrupt maritime trade” (ibid). American’s global and commercial interests trace back to its founding as well as throughout contemporary affairs.

The Kerry-Lugar Report acknowledges:

Sri Lanka has been a friend and democratic partner of the United States since gaining independence in 1948 and has supported US military operations overseas such as during the first Gulf War. Commercial contacts go back to 1787, when New England sailors first anchored in Sri Lanka’s harbors to engage in trade. Sri Lanka is strategically located at the nexus of maritime trading routes connecting Europe and the Middle East to China and the rest of Asia. It is directly in the middle of the ‘Old World’, where an estimated half of the world’s container ships transit the Indian Ocean (ibid).

New realities intersect with America’s historical trade relations with Sri Lanka more than ever. As an island nation, Sri Lanka’s long-term survival is equally dependent on continuous connection to the “Old World” and old friends. The R­eport highlights that

American interests in the region include securing energy resources from the Persian Gulf and maintaining the free flow of trade in the Indian Ocean. These interests are also important to one of America’s strategic partners, Japan, who is almost totally dependent on energy supplies transiting the Indian Ocean. The three major threats in the I­ndian Ocean come from terrorism, interstate conflict, and piracy. There have been some reports of pirate activity in the atoll islands near Sri Lanka (ibid: 12).

The shift in US foreign policy towards Sri Lanka is a clear reflection of the nature of the swinging pendulum between Jeffersonian and Hamiltonian policy orientations as highlighted in this author’s book, Trade for Peace.⁴³ With President Obama, the US regained its Jeffersonian image of global leadership through d­emocracy and multilateralism – as opposed to President Bush’s conflicted message of democracy promotion in west Asia and a unilateral approach to global conflict resolution. A realist like Alex­ander Hamilton, Obama has come to r­ealise that the US must advocate its time-honoured Hamiltonian tradition in p­rotecting American ships (both military and commercial) in the Indian Ocean. More importantly, however, the world recognises that America’s founding conviction of “the superiority of democracy over other forms of government”⁴⁴ has almost always shaped its foreign policy. The Kerry-Lugar Report seems to clarify this delicate yet evolving balancing act within the US role in Sri Lanka.

The Tragedy of Economic Success

As a maritime nation throughout its over 2,500-year recorded history (compared to roughly 250 years of US history), Sri Lanka has enjoyed friendly relations with powerful nations and rulers, and conducted trade relations with colonial America, the Middle Kingdom of China, the ancient Indian kingdoms, Japanese emperors, and Arab traders. In recent years, Sri Lanka’s close allies (i e, Iran, Iraq, and Syria in west Asia) moved away from the US due in large part to changes in national security interests and dynamics of the geopolitical and geoeconomic environment. During the Eelam War in Sri Lanka and the recent Wall Street collapse, Beijing entered into the vacuum of America’s global leadership and provided unconditional economic, military, and diplomatic assistance to the Government of Sri L­anka – winning unprecedented goodwill in C­olombo. Until then, the last gesture of goodwill from Beijing had come during Sirimavo Bandaranaike’s socialist regime in the 1970s, during which China built the Bandaranaike Memorial International Conference Hall (BMICH) in preparation for the Non-Aligned Summit of 1976.

During his nascent administration, President Rajapaksa visited China five times (three times before even assuming office), and Sri Lanka recently gained significant progress when both countries signed as many as six major agreements over the renovation of the BMICH, the development of highways, the enhancement of cooperation in information technology and communication, and the restoration of maritime ports in addition to the next phase of the Hambantota deep water seaport.⁴⁵ In June 2010, the president than­ked the 30-member Chinese delegation led by vice premier Zhang Dejiang, who was in Colombo for a three-day o­fficial visit.⁴⁶ The state-owned Sunday Obser­ver in Colombo characterised the visit as emblematic of a “silky relationship” that reached new heights under the Raja­paksa administration.⁴⁷

In the past, India’s foreign policy towards Sri Lanka consisted of military intervention and peace negotiation while engaging constructively with its southern neighbour. With greater focus on trade and commerce, both countries now look to job creation, infrastructure development, and investment in businesses. In January 2010, India funded over $67 million to upgrade the Southern Railway Line from Colombo to Matara (to double the average operating speed to 80 km per hour, connecting the two cities within two hours). This complemented the previous $100 million line of credit agreement signed in 2008 by the Export-Import Bank of India. The two countries agreed to institute an annual d­efence dialogue and promote the use of space technology for a number of social services. India also offered to extend the bandwidth to build satellite-­interactive terminals in the island in addition to assist in rebuilding the Palai a­irport, the Kankesanturai harbour, the Duraippah sport stadium, and a cultural centre in Jaffna.⁴⁸

With the American Chamber of Commerce of Sri Lanka (an association of approximately 100 Sri Lankan and US companies), the two countries have developed an atmosphere of cordiality and a harmonious trade relationship.⁴⁹Until recently, the main American investors in Sri Lanka were Pfizer Pharmaceutical, Union Carbide, and I­nter-Continental Hotels. Currently, there are over 85 US-based companies operating in Sri Lanka. The web of these relationships i­llustrates the complexity of balancing a variety of competing interests among China, India, and the US, which has always been a challenge for Sri Lanka.

Despite these trade relationships and financial assistance for economic development, the island’s political leadership and infamous nepotism lie at the centre of criticism, which intensified with Sri Lanka’s constitutional amendment in September 2010 giving the president s­upreme power over executive, legislative, and judiciary matters. A poisonous calculus – combining the autocratic presidency, nepotism, corruption, and arrogance of triumphalism – gave birth to what The Economist called the “Colombo Consensus”.⁵⁰

Conclusions

The family political dynasty or dictatorship is not new to Asia or elsewhere in the world. It is true that this is no different from the Gandhis in India, the Bhuttos in Pakistan, or the Kennedys and the Bushes in the US. Referring to the unprecedented concentration of political and economic power in Rajapaksa’s extended family, the London-based Sunday Times calculates that “with dozens more relatives in prominent positions, the net result is that the Rajapaksas control an estimated 70% of the national budget”.⁵¹ Further­more, The Sunday Times confirms that pre­sident’s 23-year-old son, who “only achie­ved a third class law degree when he graduated from London’s City University in September [2009]” (ibid) is being groo­med as the eventual successor. It also reports that “there’s always been cor­ruption, but businessmen in Colombo now complain it’s got to the point where you have to know a Rajapaksa to get something done. That’s unprecedented”, when Pre­sident Mahinda Rajapaksa him­self “heads four ministries. Gota­baya, his younger brother, is defence sec­retary. Basil, another younger br­other, is a member of parlia­ment and presidential advisor. Chamal, the oldest brother, heads two ministries” (ibid)^.

According to WikiLeaks cables re­ported in the Colombo-based Sunday Leader, the mentor to Mahinda Raja­paksa and previous Sri Lankan president Chandrika Kumaratunga said that with “Rajapaksa’s abuse of power” i­nter­nat­ional relations “spiralled down reaching a new low in the country’s history”. The former president then added that “Rajapaksas are uneducated and uncultured rascals”. She then concluded that the corruption is “appallingly bad” and the political climate is “vindictive and threatening”.⁵² Such a powerful charac­terisation added more legitimacy to the notoriety of the Rajapaksa family, which is now firmly synonymous with the so-called Colombo Consensus.

With the Colombo Consensus depicted by Rajapaksa Family Inc, Sri Lanka has departed from its long-cherished trademark of western-style of parliamentary democracy and its open market and liberalised trade policies. Despite the widely-reported corruption and nepotism, the Rajapaksa dynasty appears to pursue a unique development strategy within a complex environment of global realities and domestic needs – mostly appealing to the Buddhist clergy and nationalistic sentiments. All develop­ment projects must be channelled or approved by the president himself or his brother Basil who is in charge of the Ministry of Economic Development. The president’s other brother and defence secretary Gotabaya has integrated the Ministry of Urban Development under his command to employ military per­sonnel in the public works programmes.

The confluence of the militarised economic development, the alleged war crimes, the concentration of all powers in the executive presidency, and family members getting elected to parliament – with the jubilant aftermath of the Eelam War – has presented a negative inter­national image of the once-Buddhist and democratic nation. With such worldwide reputation, the success of the Colombo Consensus and Sri Lanka’s human progress will now be defined by the d­egree of freedom that the government would allow for its people – not the absolute freedom enjoyed by those combative leaders and their families who govern the island in the name of national interest for personal aggrandisement and profiting from international projects as Basil is notoriously known as “Mr Ten Percent” for demanding a 10% commission over every project.⁵³ If their professed faith in Buddhism would work, the doctrine of karma shall self-correct the journey that the i­sland has embarked on with the forces of great powers.

Notes

1 Claire Innes, “US Rules Out IMF Loan Program for Sri Lanka as Humanitarian Crisis Deepens”, Global Insight, 15 May 2009.

2 IMF, “Sri Lanka to Use IMF Loan to Reform Economy after Conflict”, IMF Survey Magazine, 29 July 2009,http://imf.org/external/pubs/ft/survey/so/2009/int073009a.htm, accessed on 18 February 2012.

3 Economic affairs correspondent, “China Gets Dragon’s Share of Post-war Projects in Lanka”, The Sunday Times(Colombo), 6 December 2009. See http://sundaytimes.lk/091206/News/ nws_02.html, accessed on 18 February 2012.

4 Vikas Bajaj, “India Worries as China Builds Ports in South Asia”, The New York Times, 15 February 2010,http://www.nytimes.com/2010/ 02/16/business/global/16port.html?_r=1, accessed on 8 February 2012.

5 See “Profile: Mahinda Rajapaksa”, BBC South Asia, 8 September 2010,http://news.bbc.co.uk/2/hi/south_asia/3602101.stm, accessed on 21 February 2012.

6 The United States Senate Committee on Foreign Relations, Sri Lanka: Re-charting US Strategy after the War, 7 December 2009 (Washington DC: US Government Printing O­ffice), 3.

7 Clinton and Sri Lankan Minister of External Affairs Peiris at the US Department of State on 28 May 2010:http://www.america.gov/st/texttrans-english/2010/May/20100528153614ptellivremos0.5893976.html?CP.rss=true, accessed on 18 February 2012.

8 Sujan Dutta, “USA: India Engaging with Sri Lanka amid Growing China Role”, BBC News, 11 March 2009.

9 Patrick Mendis and Leah Green, US-India Civil Nuclear Cooperation Agreement, a case study prepared for the US Project on National Security Reform (PNSR), 16 July 2008, Washington DC.

10 Tisaranee Gunasekara, “More Freedom for the Rajapaksas Mean Less Freedom for the Sri Lankan People”,Transcurrents, 2 October 2010, http://transcurrents.com/tc/2010/10/more_freedom_for_the_rajapaksa.html, accessed on 6 February 2012.

11 G Usvatte-Aratchi, “Eighteenth Amendment:
A Rush to Elected Tyranny”, The Island, 6 September 2010, http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=6063, accessed on 8 February 2012.

12 See the posted biography of Speaker Chamal Jayantha Rajapaksa of the seventh Parliament of the Democratic Socialist Republic of Sri Lanka in http://www.parliament.lk/handbook_of_ parliament/speaker_bio_data.jsp, accessed on 12 February 2012.

13 Patrick Mendis, “Passage to Indian Ocean”, The Minnesota Daily, 16 February 1986, 9.

14 Christopher Pehrson, String of Pearls: Meeting the Challenge of China’s Rising Power across the Asian Littoral(Carlisle, PA: United States Army War College, 2006), V.

15 K Alan Kronstadt and Bruce Vaughn, Sri Lanka: Background and US Relations, US Congressional Research Service, 4 June 2009, Washington DC.

16 “Chinese Billions Helping Lanka Ward Off Western Peace Efforts, Fight LTTE”, China N­ational News, 2 May 2009. See http://story.chinanationalnews.com/index.php/ct/9/cid/ 9366300fc9319e9b/id/496746/cs/1/, accessed on 16 February 2012.

17 Gamini Weerakoon, “Hambantota in the Great Game of the Indian Ocean”, The Sunday Leader, 7 February 2010. See http://www.thesunday­leader.lk/?p=7211, accessed on 18 February 2012.

18 China National News, 2 May 2009 (as in note 16).

19 Jeremy Page, “Rise of Sri Lankan President’s Son Namal Rajapaksa Sparks Concern, The Sunday Times(London), 22 February 2010, http://www.timesonline.co.uk/tol/news/world/ asia/article7035564.ece, accessed on 22 February 2012.

20 “The Colombo Consensus: Brotherly Love, Massive Aid and No Questions Asked”, The Economist, 8 July 2010, seehttp://www.economist.com/node/16542629, accessed on 21 February 2012.

21 Preeti Bhattacharji, “Liberation Tigers of Tamil Eelam (aka Tamil Tigers)”, Council on Foreign Relations, New York, 20 May 2009,http://www.cfr.org/publication/9242/liberation_tigers_of_tamil_eelam_aka_tamil_tigers_sri_lanka_separatists.html, accessed on 18 February 2012.

22 Richard Beeston, “Analysis: Beautiful Diego Garcia Makes Forces Blush”, The Sunday Times, 21 February 2008. See http://www.timesonline.co.uk/tol/news/politics/article3412423.ece, accessed on 18 February 2012.

23 Patrick Mendis and Leah Green, US-India Civil Nuclear Cooperation Agreement (as in note 9).

24 Stephen Blank, “The China-Pakistan Reactor Deal and Asia’s Nuclear Energy Race”, China Brief, Volume 10, Issue 12, 11 June 2010.

25 Ziad Haider, “Pakistan: The China Factor in Pakistan”, Far Eastern Economic Review, 2 October 2009, 2.

26 Editorial, “India and China: A Himalayan Rivalry”, The Economist, 19 August 2010. See http://www.economist.com/node/16843717?story_id= 16843717, accessed on 22 February 2012.

27 Patrick Mendis, Trade for Peace (Bloomington, IN: iUniverse Press, 2009).

28 Nirmala Ganapathy, “US’ Super Cop Role for China Gets India’s Goat”, Times of India, 19 Nov­ember 2009, 4.

29 Chidanand Rajghatta, “US More at Ease with India’s Rise than China’s Ascent”, Times of I­ndia, 3 February 2010 and M K Bhardrakumar, “China Breaks the Himalayan Barrier”, Asia Times, 1 May 2010.

30 Tanja Vestergaard, “Man at Work: Rudd Walks Asian Tightrope”, Asia Times, 17 April 2008. Seehttp://www.atimes.com/atimes/China/JD17Ad01.html, accessed on 20 February 2012.

31 Lydia Polgreen, “US Report on Sri Lanka Urges New Approach”, The New York Times, 6 December 2009. Seehttp://www.nytimes.com/2009/ 12/07/world/asia/07lanka.html, accessed on 18 February 2012.

32 Nicolas Revise, “Bitter with West, Sri Lanka Turns East for Cash and Support”, Agence France Presse, 3 May 2009.

33 Lydia Polgreen, “IMF Approves $2.6 Billion Sri Lanka Loan”, The New York Times, 26 July 2009. Seehttp://www.nytimes.com/2009/07/27/world/asia/27lanka.html?_r=2, accessed on 19 February 2012.

34 The Economist, “Unslayable Ghosts: Sri Lanka and the West Head for a Showdown over Human Rights”, 25 February 2012, http://www.economist.com/node/21548283, accessed on 24 February 2012.

35 Remarks by Secretary of State Hillary Rodham Clinton and Sri Lankan Minister of External Affairs G L Peiris on 28 May 2010, http://www.america.gov/st/texttrans-english/2010/May/20100528153614ptellivremos0.5893976.html? CP.rss=true, accessed on 18 February 2012.

36 Colombo Telegraph, “WikiLeaks: Mahinda Rajapaksa Is a ‘Christian’ – Says Archbishop”, 21 September 2011, 1 Read the full cable here: http://www.lankanewstoday.com/wikileaks-mahinda-rajapaksa-is-a-%E2%80%9C…%E2%80%9D-%E2%80%93-says-archbishop, accessed on 24 February 2012.

37 Jamila Najmuddin, “Archbishop’s Office Slams US Cable”, The Sunday Leader, 25 September 2011,http://www.thesundayleader.lk/2011/09 / 25/archbishop%E2%80%99s-office-slams-us-cable/, accessed on 23 February 2012.

38 The United States Senate Committee on Foreign Relations, Sri Lanka: Re-charting US Strategy after the War, 7 December 2009 (Washington DC: US Government Printing O­ffice).

39 Jaime Alvarado and Patrick Mendis, “New Multilateralism in Action for Peace: A Case Study of the US-led Operation Unified Assistance in the Asian Tsunami Disaster”, Global Economic Review, Vol 36, No 2, June 2007, 183-92.

40 Remarks by Secretary of State Hillary Rodham Clinton and Sri Lankan Minister of External Affairs G L Peiris on 28 May 2010 (as in note 35).

41 See a detailed analysis in Sergei DeSilva-­Ranasinghe, “Sri Lanka: The New Great Game”, The Sunday Observer, 31 October 2009. See http://www.thesundayleader.lk/?p=796, accessed on 22 February 2012.

42 The United States Senate Committee on Foreign Relations, 3.

43 Patrick Mendis, Trade for Peace (as in note 27).

44 Robert Kagan, “Obama’s Phase Two: Leadership”, The Washington Post, 1 October 2010, A19.

45 China and Sri Lanka have a deep bilateral relationship that goes back to the Rubber-Rice Agreement in 1952 and the Maritime Agreements in 1963. See Swaran Singh, China-Sri Lanka Limited Access in South Asia: Issues, Equations, Policy (New Delhi: Lancer Book), 2003.

46 B Muralidhar Reddy, “Committed to Sri Lanka’s Development: China”, The Hindu, 12 June 2010. Seehttp://beta.thehindu.com/news/
international/article454063.ece, accessed on 20 February 2012.

47 Special correspondent (Beijing), “Bilateral Relations at a New High: China – Sri Lanka’s Top Lender in 2009”, The Sunday Observer (Colombo), 10 April 2010, http://www.sundayobserver.lk/2010/04/18/fea01.asp, accessed on 19 February 2012.

48 Special correspondent (New Delhi), “India, Sri Lanka Consider Energy Cooperation”, The Hindu, 10 June 2010,http://www.thehindu.com/news/national/article451315.ece, accessed on 18 February 2012.

49 Feizal Samath, “‘America Is the Land of the Freedom’, Says Prof Mendis”, The Sunday Times, 18 January 2012,http://sundaytimes.lk/120115/BusinessTimes/bt17.html, accessed on 18 February 2012.

50 “The Colombo Consensus” in The Economist (as in note 20).

51 Jeremy Page (as in note 19).

52 See the WikiLeaks cable reported in “‘Raja­paksas Are Uneducated and Uncultured Rascals’ – Chandrika Kumaratunga”, The Sunday Leader, 16 October 2011 , http://www.thesundayleader.lk/2011/10/16/wikileaks-%E2%80%93-% E2% 80%9Crajapaksas-are-uneducated-and-uncultured- rascals%E2%80% 9D-%E2%80%93-cbk, accessed on 17 March 2012. ,https://www.colombotelegraph.com/index.php/wikileaks-rajapaksas-are-uneducated-and-uncultured-rascals-cbk/

53 Colombo Telegraph, “WikiLeaks: Basil Is Corrupt, Limited Educated and Expelled from School”, 5 January 2012,http://colombotelegraph.com/2012/01/05/wikileaks-basil-is-corrupt-limited-educated-and-expelled-from-school/, accessed on 12 March 2012.