Re-examining Colombo-Beijing ties
View(s):After years of debate, it has taken one Sri Lankan economist to present a clear perspective of Sri Lanka’s ties with China in all areas of trade, commerce, investment and politics.
The China card vis-à-vis Sri Lanka’s relations with other key trading and political parties like India and the United States has drawn a lot of debate, discussion, rhetoric and conjecture.
But no one, or not in some many words, has the relationship and growing ties between Sri Lanka and China been more explained than Dr. Saman Kelegama’s detailed discourse on China-Sri Lanka trade, commerce, investment and aid ties, when he made a presentation on China’s role in the Sri Lankan economy this week. Ironically this presentation was organised by the Sri Lanka-Italy Business Council, a reflection of how China’s involvement in Sri Lanka – at all levels – is drawing the attention (and sometimes concern) of other economic and political giants in the world.
Dr. Kelegama is Executive Director of the Institute of Policy Studies (IPS) and an expert on international trade and global free trade arrangements and the most interesting part of his analysis was one simple fact, which many have chosen to either ignore or simply missed; ie – that there is virtually no technology transfer from Chinese projects.
The reputed economist doesn’t discuss the politics of China-Sri Lanka relations but many inferences can be drawn from his presentation, which is reported in another section of the Business Times. The process of technological transfer from Japan came in the late 1970s with the emergence of large Japanese-aided projects in Sri Lanka. In recent times, the transfer of technology has also happened with the Indians with Dr. Kelegama citing the example of Lanka Ashok Leyland bus manufacturer and CEAT Kelani tire producers, which resulted in an over-and-above 75 per cent technology transfer.
Unlike Japan or India which attaches conditions like use of their technical expertise to aid-related projects which would result in technological transfers even through an automatic process, the Chinese condition is the use of their unskilled labour – large numbers as seen in projects across the country.
If India and others were grumbling (at the beginning) about the gradual closeness and affinity by Sri Lanka to China, purely based on the fact that China came to Colombo’s rescue (at a price though!) when the US and its allies (in Europe) were screaming about human rights abuses during the last stages of the 30-year old conflict, those concerns are growing by the day; particularly so in India’s case.
India’s worry over any country getting closer, militarily and politically, to Sri Lanka is understandable given that the small island state is on the doorstep of the South Asian giant, and any military-related ties, particularly with a one-time foe (China fought a border war with India in 1962), would be frowned on. China has ousted Japan as the largest provider of development assistance with a commitment of US$1.05 billion though Japanese aid is grant free or on low, concessional interest terms.
China’s influence in Sri Lanka is gauged by the fact that its state-owned companies are involved in a number of infrastructure, communication and port development projects of strategic importance all of which are funded by Chinese loans at commercially high interest rates and short repayment periods. Along with these projects come some technical expertise and large doses of labour.
In the Business Times main story (overleaf), a new kind of cooperation is being mooted between the two countries to take the relationship to a higher level.
To illustrate its support, China is also sending the single largest delegation of 120 businessmen for the Commonwealth Summit in Colombo in November. In the meantime, possibly worried about a shortfall in numbers for the business forum that would run alongside the leaders’ summit, the Government is also reaching out to non-Commonwealth countries like Germany to send business and investment delegations to this conference.
Efforts to firm Sri Lanka-China ties was also evident by the presence of a 20-25-member delegation in Beijing last week to launch a mega promotion campaign by Sri Lanka Tourism to attract thousands of Chinese tourists to Sri Lanka. Colombo is hoping to increase Chinese arrivals to 200,000 by 2016 and 50,000 this year from 16,000 last year. China is the Maldives’ largest tourism source market and Sri Lanka is hoping to do the same.
The China connection has drawn both bouquets and brickbats. On one side, Sri Lanka had few friends in the West during the height of the war in 2008-early 2009 because of allegations of human rights abuses and in desperation turned to India, Pakistan, China, Iran, Libya and a host of other smaller countries. China has provided military logistics support during the war and in the post-war era, won many projects and contracts miffing India in the process. In the corridors of power, the joke is that very soon India will control the north (Jaffna) while China will control the south (Hambantota)!
While China’s support during the conflict years needs to be appreciated, its larger-than-life role in Sri Lanka needs to be re-examined in the context of firmer Indo-Sri Lanka ties which are far more important to the country’s security and economic interests.
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