18 August, 2022


Sri Lanka’s Sovereignty & Economy Confronting An Impossible Trinity

By Ameer Ali

Dr. Ameer Ali

An India-U.S. geostrategic and neoliberal economic alliance on the one hand and an aspiring-to-be world power China on the other, with a financially empowered neoliberal economic manager, IMF, acting as a third form an impossible trinity that is redefining the political sovereignty and economic destiny of many smaller nations. A debt-burdened but resourceful post-war Sri Lanka with its strategic location in the Indian Ocean is a classic victim of the pressures exerted by this impossible trinity.

When the Sri Lankan army defeated the LTTE in 2009 I described that victory as comprehensive and absolute but Pyrrhic. It was pyrrhic not simply in terms of the enormous losses, both in terms of economic resources and human lives, which were immediate, but more importantly in terms of the long term damage that the war, which was totally unnecessary to start with, was going to cost to the country’s sovereignty and economic future. This may not have been obvious at that time and certainly was not a serious concern for the victors who were physically and emotionally basking in schadenfreude, but now and within less than a decade the real cost of the war is beginning to bite politically as well as economically.

The situation that Sri Lanka is facing now is somewhat analogous, although on a tiny scale, to that of the U.S. and its allies in the aftermath of their Pyrrhic victory over Afghanistan, Iraq and Libya.  Of course to them it is not a question of national sovereignty, which in any case has to be redefined in the face of globalization with porous territorial borders, but rather the problem of domestic security in their countries that has become a nightmare. The imperative demand to secure borders and local population from so called terror attacks which ceaselessly consumes huge amount of unaffordable dollars at the expense of other more vital needs of the society such as education, health care and welfare support to the vulnerable has brought home to policy makers the real magnitude of the high-priced victory. Even though the Western leaders don’t want to admit it openly, yet, the fact remains that the steeply rising security costs are threatening to jeopardise the much touted neoliberal economic model. In that sense at least one of Bin Laden’s promises to “bleed the U.S. to the point of bankruptcy” (he said this in a videotaped speech sent to Aljazeera on 1 November 2004) may be nearing partial fulfilment.

Sri Lanka’s political sovereignty and economic destiny have been virtually compromised by successive governments since the 1980s partly because of growing geopolitical pressures in the Indian Ocean and partly because of financial indebtedness to foreign lenders, both of them are closely linked to the civil war.

In spite of Sri Lankan’s military superiority acquired through costly state-of-the-art weaponry and aggressive recruitment of soldiery that war would have prolonged even further had it not been for the covert but decisive role played by India. Future historians with access to the now secret documents on the war will have more to say on the crucial Indian variable. Delhi was prepared to betray the political support of Tamil Nadu and sacrifice the lives of thousands of Sri Lankan Tamils not because Delhi loved the Sinhalese but because of India’s strategic interest in the Sri Lankan economy and her maritime waters. Similarly, China’s support during the war was also coloured by her own national interest to gain market and add one more pearl to her string of military and commercial facilities along the Indian Ocean. These hard facts are now being openly displayed in the various economic and strategic deals that are being signed between Sri Lanka and India on the one hand and Sri Lanka and China on the other. The actual outcome of these deals are more to the advantage of the foreigner than to the local.     

Economically India is slowly but surely proceeding on her long term mission to convert Sri Lanka into a profitable enclave for Indian capitalists. At the same time, geo-strategically India’s desperation to gain a long term leasehold over the Trincomalee harbour like her leasehold over Mattala airport are measures to counter the growing Chinese influence in the island. The 99-year leasehold over the Hambantota harbour granted to the Chinese government was a payback to Chinese weaponry used in the war and financial support to the island’s infrastructural development. China also has been awarded the contract to redevelop the Colombo Port city. Just as India wants to keep the Indian Ocean Indian in every sense of that name so also Beijing wants to safeguard her trade routes along a new silk road over the Indian Ocean which has now become crucially vital in the face of tensions in the Pacific between Washington and Beijing. In this new geopolitical great game Sri Lanka is bound to face situations when she will be forced to make a choice between two or even three – if one includes the U.S – confrontationists. It will be a cruel choice that will tax Sri Lanka’s diplomatic skill to its extreme. Will that also endanger her sovereignty?

The IMF, the third of the impossible trinity, is a different kettle of fish. Its sole mission is to train Sri Lanka as an obedient pupil of the neoliberal economic school. As the supreme institution of the neoliberal economic order IMF has invariably become the handmaiden of Washington and the Wall Street. If getting economic and financial assistance from India and China becomes too onerous the only other source available to Sri Lanka is the IMF, but that supremo has its own conditionality attached to its wallet. The so called structural adjustment program and austerity measures assiduously preached by the IMF ultimately benefits the rich at the expense of the poor. Broadening the tax base by shifting from direct to indirect taxes, privatization of state owned or state managed enterprises, operation of an untrammelled free market, freedom for foreign multinationals are some of IMF’s cure for national economic ailment. The recent IMF $167 million tranche to Sri Lanka carries with it some of these conditionality. The usual IMF mantra of short term pain for long term gain has not worked in any of the counties that sought IMF assistance.  If Sri Lanka refuses to play by the IMF rules, then there the international credit rating agencies that are IMF’s subsidiary managers who will punish the nation by down grading its credit rating so that other international lenders will keep away from assisting the nation. 

This impossible trinity which the island currently facing is bound to create discontent if not in the short term but certainly in the medium and long terms. Behind the superficial growth rate of the so called GDP, which is popularly touted by politicians, establishment economists and opinion makers to show how well the economy is being managed lies the ugly facts about widening income disparity, environmental degradation, unchecked corruption, cronyism and an absence of rule of law, to enumerate just a few. The GDP does not anything about these unpleasant facts which are bound to create open resistance. To cover this ugly reality, governments can periodically distract community’s attention away by keeping the ethnic issue burning. This is why the country is still not enjoying the peace dividend promised after the 2009 victory. The anti-Tamil campaign of yesterday has turned into today’s anti-Muslim campaign. Divide and rule is not necessarily an imperialist or colonialist ploy. It can also be used as a handy weapon by power hungry rulers in multi-ethnic societies. However, the pernicious nature of the economic and political reality facing the country will soon dawn on the national conscience of the people. The public outrage that will result from this awakening will be truly national in character. When that happens the political sovereignty of Sri Lanka will be severely tested given India’s and China’s strategic hold over parts of Sri Lanka’s economy and territory.                                                   

 *Dr. Ameer Ali, School of Business and Governance, Murdoch University, Western Australia  

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Latest comments

  • 7

    An excellent analysis .

    • 4

      Dear Ana Pararajasingham,

      I agree, although I know little of either Dr. Ameer Ali or you. It is not easy formulate the sort of overview that he has been given here. We desperately need to have people from all backgrounds to come together and force our supposed leaders to face up to reality.

      I have clicked on the author’s name and come across other articles by him that show that the sweeping generalizations given here are based on solid facts given in a number of articles (some not by him) listed there by Colombo Telegraph. This is one:



      It is very important that we should have Sri Lankans who are able to rise above the petty and the parochial, and force our political leadership to give us citizens “the country is still not enjoying the peace dividend promised after the 2009 victory.” The claim is that the COUNTRY was saved in 2009, but little is done to assure the minorities that we will ensure that they, too, will benefit?

      The moment I write in this way, there are those who question my identity, as here:


      What citizens think appears to matter little, so thanks, Dr. Ameer Ali.

  • 4

    Most of points here are either correct or reflecting the reality. But two or three distract the facts.
    An India-U.S. geostrategic and neoliberal economic alliance on the one hand and an aspiring-to-be world power China on the other, with a financially empowered neoliberal economic manager, IMF, acting as a third form an impossible trinity that is redefining the political sovereignty and economic destiny of many smaller nations.

    1. This is not internationally acceptable phenomena. This is based on the Lankawe’s current reality. America is the most indebted nation to China. All Western countries to some extent indebted to China. India not widely known for investing in other regions, though wants to compete with China in Lankawe. Almost all the income of Lankawe is coming from America and EU. There is little bit from Middle East too. Other than tourist, practically I do not know to point one income from China. There is no loan burden from India or America or EU. American GSP+ not attached any strings. MFC donation has Human Right requirements. EU’s GSP+ has human rights requirements. Yes, GSP+ requirements are applicable internationally on all poor countries, but only voluntary. There is no Indian loan pressure. ETCA can give a wider market if wisely used. The only loan Pressure here is from China, but even, most of it is rather than from war, mainly pocketed out $18 billion. In that corrupted situation blaming China to demand to return the money is only unfair to China. Further locally the looters honored as hero but in China looters will be hanged.

  • 3

    2. IMF is an international Body. Lankawe and other poor countries, who are members, are equally share responsibility to its economic policies. IMF directly attaches economic overhaul requirements to its extremely cheap loans instead of allowing like China to swindle by the dictators of the poor nations. As China has been purposely allowing them to loot the loan money, for long time, it was campaigned in CT that China loans are trouble free. We vehemently denounced China all the way from the very start. It is all over everywhere in CT’s essays. Now after being forced to sell Colombo Pong Cing, Hangbangtota, Maduru Oya and the nation’s road ways, there are essay staring to appear that there is no free lunch from China.
    3. So the hardship Lankawe facing is described properly, the trinity framing does not really exist, neither internationally or locally. To some extent economic writers who oppose West, connect the IMF- World Bank with West and treat them as Western institutions. One can see that feature in Siri Gamage’s essays in CT. Shylock China is a new phenomenon.
    4. Bangladesh too has GSP+ and invites China to develop. It is in the string of Perl of China. India’s pressure there too to cut down the contacts with China. Pakistan devastated Bangladesh like Lankawe did to Tamil Eelam. But Lankawe was left unaffected by the war unlike Bangladesh. India fought the entire war for Bangladesh. But Bangladesh technically, artistically and diplomatically managed from being assimilated by India. Lankawe bought pnly arms from China; but now engrossed by China.

  • 2

    4. Bangladesh will be overtaking one nation every year until 2050 in its growth ladder in GDP. Though it faced similar or worse war in 1970s, it too is corrupted and it suffered long term army rule until West forced out, like Old Royals was chased out of Temple Tree House, but it is not suffering like Lankawe in its loan burden. Because the Bangladesh rulers are not brave like Lankawe’s rulers to loot such massive amount in the daylight.
    5. Lankawe loan is mainly from looting of Old Royals. Central Bank robbery aggravated the burden. In fact Lankawe is not really struggling to come up economically as pointed out in the article. Main problem Lankawe trying manage now is to neutralize UNHRC’s request to investigate the Genocide. To escape from this, Lankawe rulers are pawning and selling more parts of Lankawe to China, hoping to use its veto in UN SC when UNHRC refers its case to UN SC.
    6. Lankawe got into trouble with India. It dodged the Katchativu from Indira Gandhi and invited Pakistan army to use Colombo Passenger airport to military use. This made Mrs. Gandhi to participate in rebels’ training. JR signed a pact for join defense. Colombo hugs China and allows its military vehicle use Lankawe’s facilities because of its commission on projects. This makes India nervous. This makes India nervous. This in turn has made India to withdraw the ETCA, a Lankawe bent trade fact, highly beneficial for Lankawe. Now all India’s pressure over Lankawe is about defense and practically nil on the economy.

  • 0

    I say your analysis is wrong. Probably, yiou are not reading from many sources and your readings are only from one group. WhatI hear is very different. The west is still very ruthless. they do and dastard thing in order to acheive what they want. YOu can read about all those countries you mentioned and how they suffer, what is happening in Latin america, what is happening in some Asian countries. Sri lankan doe snot have any escape. Sri lanka is part of their system for decades now. I read in some articles many amazing things how they fund these campaigns etc., Most definitely, your analysis is missing lot of facts. On the other hand, Sri lanka doe snot have very good visionary leaders. They are from the same group and their only wish is to stay in power and become parasites to the system. with respect to Tamils, it is wrong to say that India gave up Nadu and supported the Sri lankan govt. Why did not give facts to prove it. with respect to muslims, I remember you came screaming about something done by BBS’s Venerable ghanasara. in Kurunegala. but, Later Judge had scoled the police, I heard, because of political influence Sally, police had set up that youth saying he had thrown petrol bolb or something actually, it looks it was Sally who had done it to fix the monk.

    • 1

      Dear Dump sorry
      what is wrong with your head ..
      you have been sparking badly about Tamils of Sri Lanka. do you know Tamils are original people of this island..we came to Sri Lanka long before Sinhalese came..
      go and read about Srilanka before 3000 years ago.you name from North East India but we came from South India ..which is near to Sri Lanka. 5000 years back Sri Lanka and India are one. so now you see and

  • 2

    Dear Dr Ameer Ali,
    Brilliant analysis. Thank you for your “Intellectual Honesty ” and your multi frame views. What I mean by multi frame is Local, Regional, Global, Indian, Chinese, Sinhalese, Tamils, Muslims , and others ,and so on. The list goes on.

    I wonder what will be the reaction of PhD holders like GL Peris, DJ, Rohan.G, Rajeeva W, Wijeyadasa R & many other players like them !.

    Dr.Ali, do you honestly think that Mahanayakes with one voice will call Fr.Augustine Fernando and
    other eminent religious leaders like Fr. Augustine Fernando to Maha Nuwara and make a joint appeal to the masses that ” not only Low Politics Retard Sri Lanka but it will also Destroy Multi Racial, Multi Religious SL for Ever ” or some thing along that line.

    PS : No special invitations tp President, PM, Ministers, MPs, , Armed forces personbel Chief Ministers, councillaors , governers.and the likes.
    Who ever wants to attend must do so except the Police and neutral media personnel.

  • 1

    There are some pressure by some nations and organizations on Lankawe to move forward on human rights. Mishandling that can lead one day this to be translate into IC’s economic sanctions. That could be still a long distance tsunami. But other than those related war and genocide crimes, which are politically provided with internal impunity, so far there is nothing has been singled out that doing an IC’s request may kill Lankawe’s Economic, geo-political, cultural or any other ID. Then, why Lankawe put extreme effort and dodge those requests is not clear. One possible explanation seems to be, the Sinhalese’ minority complex, which is not simply letting them to corporate with Tamil, but not allowing to get along with IC either. They feel carrying out something recognized at international level, for the request of International Community, is lending to infringement of their sovereignty. A classic example is EU had placed a request to reform MMDA. Many learned Muslims took risk on their lives and rallied behind that idea. Beyond EU’s request, there are Muslims who opposed MMDA from the inception of it too. To evaluate political risks associated on it, in Lankawe Muslims are under 10%, but in India above 10%. Indian Supreme Court Knocked down the 3 Talaq law that is now deep into their culture. It appears, the Sinhala Mahajan, who decides who rule, is earnestly indifferent to MMDA and completely ignorant of the risk associated of ignoring MMDA. But ultra-smart Aappa Diplomatic Yahapalanaya outsmarted EU and dodged it. The regressive MMDA had been used from DS’s time to devastate Muslim women’s freedom, to wedge between Tamil and Muslims and thus taking the support of unscrupulous Muslim politicians, who are outstanding criminals and their criminal cases on courts are put on halt by Sinhala Political leaders.

  • 1

    This is how the Sinhala Politicians are creating economic stress in other communities too. By refusing for one minority community’s one gender sector a simple provision to seek relief from mistaken marriage, which practically enjoyed by the entire world, Lankawe is desperately seeking nationwide economic blockade from EU by withdrawing GSP+.

    It is joked that Jagath Jayasuriya appeared in Brazil Airport with black and brown shoes. He abandoned his highly lucrative diplomatic business in the middle of his term and ran back to Lankawe. His personal appearance to any media to accept or deny Yasmin Sooka’s accusation did not come on any media. But Lankawe president, ex-president, the Army Chief of Staff and some media had given their verdict on this case, which has been filed under international law,- “Not Guilty”. Until a child cries out (May be Yasmin Sooka) that these Lankawe war Heroes are naked criminals, the entire political machine of Lankawe is trying to stand on its claim that “The Old King’s New Cloths are the most wonderful dress ever made”. Appe Aanduwa position is, if a Tamil is killed by the Sinhala governments’ acolytes, the Sinhala Only Jury verdict will be “Not Guilty”. Lankawe is trying to establish this at any cost. (With the criminal history of Jagath, one may have to question how the illegal drugs showed in the Brazil sugar containers, which are put on hold for Import.) By creating political and legal friction at international level, Lankawe creates nation’s economic problems.

    The opportunity for fame of future is shifting towards honest Workers for Humanity. The brutal murderers, who themselves designate them as Smart Patriotic Heroes are more and more left behind. Chaves, Castro, Stalin ……are no longer Heroes. In America there is a revolution is taken place after the last election.

  • 1

    The reason may be that the Americans may not want to be identified them as World War II Germans. This has provoked many Confederate Memorabilia removed from public display on prominent places. A very interesting development is, it is not coming from crowd gathering, highly contested Sothern War Heroes’ statue removals. It is coming from North, in multi-racial city New York. New York has recently proposed to remove Dr. J. Marion Sims’ statue from Central Park. Dr. J. Marion Sims researches & services are about women. The Central Park statue is there to honor the doctor as “The Father of Modern Gynecology”. But there is a much degraded accusation on him as he used slave women for his achievements, without providing proper medical care. This accusation, which is coming after 150 years of the doctor’s death is forcing his achievements go disgraced and his statue is being removed. One may have to remember here that UNHRC HC Navi Pillay, when she visited Lankawe, questioned the morality of having Don Stephen’s statue in National Freedom Square as the “Father of the Nation”. Father of the Nation DS, who schemed to deport 8 Lakhs of Tamil from their living places, is no different in the eyes international human right activists, in any manner, from Dr. J. Marion Sims, who is the Father of Modern Gynecology.
    Running out of Temple Tree House or running out of Switzerland or running out Brazil is not going to solve Lankawe economic problems. The time to accept for the emperor that he is naked is approaching slowly but steadily. Unless Lankawe is prepared to have tattooed in florescent red on the forehead of the criminals as “Rapist-Murderers” it cannot settle its accountability & Economic crises with the fast moving IC.

  • 1

    Sri Lanka is sandwiched between geopolitics of India and China..Sri Lanka needs both countries. Sri Lanka can not angry India in support of China and it can not anger china in support of India..
    MR did favour china it cost him his post and RW prefer India but he can not ignore china or anger china ..it would cost him dearly. it would mean china will put pressure on him. so compromise is made between two..still china has got stake in Sri Lanka now.
    it’s 99 years lease in SO. It control 15000 thousands Acres of land ..
    so it can use it for any purpose to.dump its chemical waste …
    many more things ..india too want to.have tricomalee sea port .

  • 1

    There is an alternative nobody wants to talk about. We will lose our so-called sovereignty . But we will gain accountability , an independent judiciary, freedom from debt, cheap food , cheap labour, better educational opportunities, a stable currency among other things. How?

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