By W. Vishnu Gupta –
The present Sri Lankan regime seems to have grudgingly and unwillingly accepted the inevitable effect of Belt and Road initiative of China. BRI should have been adopted wholeheartedly before 2014 and not for the nefarious reasons uttered by politicians. Senior Minister John Amaratunga, a diehard supporter of the prime minister has said recently; “Sri Lanka looks forward to benefiting more from the China-proposed Belt and Road Initiative and is ready to welcome more Chinese investment into the country.
Furthermore this Minister currently responsible for Tourism Development, Wildlife and Christian Religious Affairs has gone on record for saying; “To start with, Sri Lanka is fully supportive of the Belt and Road Initiative of China. We have no debate on that. We look forward to benefiting more from this policy that China has adopted.” What a quirk of fate.
Kiss the hand they wish to cut off
The UNP lead government has taken almost four years to wake up from deep slumber and move away from antagonistic policies towards China. Not so long ago the UNP maligned then government of the strongman Mahinda Rajapaksa. The UNP claimed that Port City project was dangerous and detrimental to Sri Lanka.
On December 17, 2014 then Opposition United National Party (UNP) Leader Ranil Wickremsinghe vowed to scrap the Colombo Port City project after the Presidential election on January 8th2015.
“UNP Leader Ranil Wickremesinghe met tourist industry leaders yesterday at the Opposition Leader’s office. Pegasus Reef Hotel Director P.M. Withana and UNP MP Harsha De Silva also participated at the meeting – Wickremesinghe made this early declaration during a meeting with tourism industry stakeholders at a meeting in Colombo. He said the multi billion project would be scrapped because it would end up destroying the coastal belt from Negombo to Beruwala.- Financial Times, December 17 2014.
After lackluster four years of controlling the government, very same man Ranil Wickremesinghe, who predicted doom and gloom due to Chinese investment has stated in 2019; “the Port City will transform Sri Lanka’s capital Colombo into a financial and trading hub”
The citizens must take what these oligarchy leaders say to the voters with a grain of salt. The UNP leadership has taken a U-turn and publicly announced;
“We hope more investments will come into Sri Lanka from China. There are a lot of Chinese companies who are looking to invest here, particularly in the tourism industry. We will gladly welcome all of them and give them all the support and assistance to start their projects here which will help our economy,”
“We look forward to engaging more with the Chinese government under the BRI (Belt and Road Initiative)”
These statements made by Sri Lankan politicians must be treated as nothing but political grandstanding or tongue in cheek policies.
African market and the Critical Hub of BRI
Africa within foreseeable future will be as populous as China. Their colonial past forced them to depend on western countries however; situation has changed mainly due to China’s overseas development strategy and foreign policy. As such, the African leaders do not have to choose sides as they did during the cold war and the Africans have many choices to make. Under this context Africa will become the next best evolving market for the goods and services offered by any developed country. The competitors jockeying for a major share in this new market are China, Japan, USA, France, Turkey and India. China leads the pack.
China and many African nations have been partnering investments for nearly a decade. Both parties trust each other without any strings attached. High level contacts of the two sides are made in the Forum of China-Africa Cooperation. At the 2018 China-Africa Cooperation Forum, China announced it would be providing $60 billion in financial support to Africa. It shows the level of commitment of China’s investment in Africa. The collaboration and cooperation has made Africa one of China’s greatest allies in the current global market environment. The investment trend will continue at a steady rate.
Geographic Strategic Advantage
There is no secret behind the primary motivation of China’s push toward increased investments in African nations and Sri Lanka. Sri Lanka’s role BRI is crucial in China’s development and trading strategy in the continent of Africa. Unfortunately, Sri Lankan corrupt politicians driven by short term personnel gains (bribery and graft practices) have failed to understand the long term benefits to Sri Lankan citizens in participating BRI initiative. There is no master plan based on national requirements, both present and past governments have followed shoot from the hip approach.
Source, Hub and Destination
As per national economic strategy, China would like to secure a solid base of raw materials to fuel China’s own rapidly growing economy based on the demands and production capacity of “The factory of the world”. Africa has become the source of raw material and the emerging market for the finished goods. The stakes in Africa are high, many are targeting the continent’s rich abundance in raw materials. For example; Africa is estimated to contain 90% of the entire world supply of platinum and cobalt, half of the world’s gold supply, two-thirds of world manganese and 35% of the world’s uranium. More importantly, Angolahas become China’s third-largest oil supplier. Among the others following Angola are Republic of Congo and South Sudan.
China-Africa trading strategy is also driven by the major growth opportunity presented by emerging market economies in Africa. According to statistics from the General Administration of Customs of China, in 2018, China’s total import and export volume with Africa was US$204.19 billion, a year-on-year increase of 19.7%, Among these, China’s exports to Africa were US$104.91 billion, up 10.8% and China’s imports from Africa were US$99.28 billion, up 30.8%.Under this backdrop, China must secure a safest maritime passage for her cargo ships plying between mainland and African continent to ensure the success of this mega trading arrangements with African governments.
The cargo ships travelling back and forth between Africa and China have to cover a vast distance. For instance, there are about 7500 Nautical Miles between Kenyan port Mombasa and Port of Qingdong, China. It is an enormous distance and there are only three logical ports in the Indian Ocean with enough capacity to berth huge cargo ships either for transshipment to India, replenishment, maintenance or emergency without any detour. All three ports are in Sri Lanka; Colombo, Hambantota and Trincomalee. Hambantota is the first choice. The other option is Port Louis in Mauritius. It is not as attractive as Sri Lankan ports due to its location and very cozy relationship it maintains with India. Hence it is obvious that Sri Lanka is in an enviable position to satisfy one of the parameters of China-Africa development strategy equation which is the “HUB”.
No wonder that Sri Lanka has become the darling of competing trading powers vying to get a big piece of the African economic pie. East-West shipping route lie within the Sri Lankan territorialwaters in the Indian Ocean and passes only six to ten nautical miles south of the country. It is the most cherished and desirable position in the maritime route linking China and African continent that attracts world trading powers and it has no bearing on economic policies or popularity of Ranil, Mahinda or Maithri.
Currently, more than 60,000 ships ply this route annually, carrying two-thirds of the world’s oil and half of all container shipments.
Undoubtedly, Sri Lanka’s geographic strategic location is the key to ensure the only safest maritime route for Chinese vessels. Chinese mega scale investment on Hambantota harbor and Port City Development is closely linked with the China’s strategy in Africa. Despite the claims made by some politicians in Sri Lanka, China has no desire to increase global political influence, very often they (Chinese) have declared that internal politics of any nation is irrelevant to their foreign policy. Mining and drilling oil will remain a primary focus of China’s investments in Africa; however, given the market opportunities Chinese would not fall behind any other nation to extend throughout virtually every market sector, including infrastructure development to food processing.
Finally, Belt and Road Initiative of China is not a plot as some detractors have argued. Also, it should not be considered as a “Sugar Daddy” by the vile local politicians and make predictions without any substance. Sri Lankan leaders must be serious about the economic/social dilemma faced by common man / woman and be honest to transform very valuable national assets taking advantage of BRI. For instance, developing Hambantota district to be another “Shenzhen” of Indian Sub-continent is a great idea whose time has come.