'Sri Lanka’s China ties don’t detract from special relations with India’: GL Peiris
Sri Lankan foreign minister GL Peiris said the overarching theme for his three-day India visit is the transformation of the India-Sri Lanka relationship from a transactional relationship to a strategic one
NEW DELHI: Sri Lanka’s foreign minister GL Peiris said on Monday that the overarching theme for his first visit to India since assuming office last year is transforming bilateral ties from a transactional relationship to a strategic one based on closer integration in key sectors such as energy, tourism and manufacturing. In an interview, he also said India-China rivalry is a factor that Sri Lanka has been accustomed to living with, and Colombo’s ties with Beijing do not in any way detract from the “special quality of the relationship” with New Delhi. Edited excerpts:
Q. Minister, you’re visiting India at a time that is crucial for your country. What is the latest on the financial crisis confronting Sri Lanka and how is your country coping with this problem?
A. There is, of course, financial stringency at the moment, both in fiscal terms and in foreign exchange terms. But we are already seeing the light at the end of the tunnel. The reason why I say this is that the principal causes of the present problem are being dealt with in a manner which is helpful, and which would ensure that the crisis does not remain for us any longer than is necessary.
Now, for instance, one of the principal contributory factors was the collapse of the tourism industry, which is worth approximately $5.1 billion a year for Sri Lanka. What happened at the height of Covid-19 is not just the income from tourism was reduced but that it dried up altogether. It came down almost to zero. Obviously, that had a devastating impact on our economy, particularly on the foreign exchange situation.
Then, one of Sri Lanka’s principal sources of foreign exchange are the remittances that our people send from abroad, something like $6 billion to $7 billion a year in total. Now naturally, our people working abroad were eager to return to their own country when the pandemic set in, and Sri Lanka did everything in our power to do it. We arranged for special flights, accommodation, arrangements. We spoke to the governments in question, especially in the Gulf region. All of that meant that those remittances were drastically diminished. The third main source of foreign exchange is Sri Lanka’s exports. There, we were not so badly affected. In fact, as far as some exports are concerned, there was even an improvement. But overall, the economy took a hit because of the combined effect of all these factors. Now it is easing. Not that the problems have disappeared altogether. But the tourists are coming back. We have 35,000 to 40,000 tourists sometimes coming every day. It is a modest beginning and the situation is steadily improving. We have a large number of tourists from India. Before Covid-19, about a third of the tourists coming into the country were from India because we have excellent connectivity with Indian airports. Now, Sri Lankans working abroad are going back. So that source is also being revived. So it is improving, and we are giving some thought to the restructuring of debt. So, the prospects for the future are reasonably good. We are going through a difficult phase – there is no point in underplaying that. It is a very difficult time, probably the most difficult time that we have had since independence and the support of India is very greatly appreciated.
Q. During Sri Lankan finance minister Basil Rajapaksa’s visit to India in December, the two sides discussed a “four pillar” package to help Sri Lanka’s economy. What more are you looking at from India?
A. India’s assistance has helped immensely to tide over this period. The details were arranged during a very fruitful visit which my colleague, finance minister Basil Rajapaksa, paid to New Delhi a few weeks ago. During that visit, the finance minister of Sri Lanka met the finance minister of India, Nirmala Sitharaman, and the foreign minister S Jaishankar and a package was worked out. It consisted of four pillars as it was called. The first was a $1-billion line of credit to be used for the purchase of essential food items and pharmaceutical products. Then, $500 million from the Exim Bank of India, which was a revolving fund for the purchase of oil, and very important for us. The third element was support towards the balance of payments and there was a deferral of a payment that was due from Sri Lanka to the Asian Clearing Union, that was approximately $515 million, and the Saarc currency swap, that was $400 million. The fourth pillar was infusion of substantial capital by Indian private sector industry in Sri Lanka in designated sectors such as the hospitality sector, into which there is considerable Indian investment [by ITC and others]. That has helped very considerably. In fact, the finance minister of Sri Lanka is planning to make a second visit to New Delhi in about two weeks’ time.
And he’s been in touch constantly with regard to the implementation of this arrangement. And we are very appreciative of India stepping in at this time. Basically, it’s not the first time that India has done it. I mean, with Covid-19, India stepped in first with 500,000 vaccines, Prime Minister [Narendra] Modi set up a Covid fund in about March 2020. There was support through Covax and in other ways, and then when a maritime disaster occurred, India helped to douse the flames of the ship that was burning in our territorial waters. So there is a feeling in Sri Lanka that whatever the problem, India is there to step in, to help us when required – the feeling is very strong.
Q. What are the main issues you are hoping to raise during your visit and what will be the focus of your discussions?
A. I would say the overarching theme is the transformation of the relationship. That is the thread that will run through all my interactions in New Delhi. That is, it is no longer a transactional relationship, focusing on this transaction or that transaction. There have been many which have hit the headlines, like the Trincomalee oil tank farm [deal] and the [deal for the] West Container Terminal [at Colombo port]. Adani Shipping is a principal player and dredging [for the terminal] is expected to commence within the next two or three months. Important as they are, that is not the sole or even the principal focus today. The principal focus is the essential character, the inherent quality of the relationship, which is being elevated to a completely different plane, a strategic partnership in every sector.
Now, for example, ports and shipping are very important for us. In our ports, the major business is trans-shipment. So trans-shipment is 70% of the business, and about 80% of it is India-oriented, and many of these ports are Adani-held ports. So, if we are to develop Colombo and Hambantota as a trans-shipment hub, a digital hub, a manufacturing and knowledge hub, for all of this integration with India is crucially important, a higher degree of integration. That is a way forward for both countries and it is a win-win situation for both. Take the electricity sector, Sri Lanka produces about 4,300 MW and the NTPC alone more than 60,000 MW. In Manar district, we have the capability of developing wind power to the extent of about 5,000 MW. So again, if there is greater integration, both countries will benefit. The Trincomalee oil tank farm’s storage capacity is useful for India, for Sri Lanka, the investment and energy security which is crucial for our industries. So the point I’m making is that it is mutually beneficial to contemplate a closer integration in all these sectors – oil, petroleum, gas, electricity, tourism, manufacturing, and most of all people-to-people contact.
And the pivot is Buddhism, which is India’s greatest legacy to my country. The fund that is to be set up of $15 million – a personal initiative of Prime Minister Narendra Modi – for the development of temples and other places of religious and historical interest in Sri Lanka. So it is not just a relationship confined to the corridors of power between New Delhi and Colombo, but something that percolates down to the grassroots.
Q. Some have suggested there was some sort of a transactional aspect to the relationship, with issues such as aid being linked to the deal for the Trincomalee oil tank farm. Is that a correct perception?
A. How can that be a correct perception? Because during the last 15 years, there were no fewer than 11 lines of credit which we received from India, much of which was for the development of railways. We’ve got about $700 million as recently as January this year. We started the Colombo- Kankesanthurai train with diesel units supplied by India. So there has been continuity about it. It is not that everything suddenly sprang into action post-Trincomalee oil tank farm, and the suggestion that there was arm twisting on the part of India and some kind of bargaining – nothing could be further from the truth.
We have not had that kind of pressure exerted on us by India with regard to any matter. It is a relationship based on candour, equality and mutual goodwill, not direct or oblique pressure.
Q. Is Sri Lanka concerned about getting caught up in the rivalry between India and China?
A. That is a fact of life, in the Indian and Pacific oceans. But it is by no means, a new phenomenon. It’s something that we have been accustomed to living with for a long time. We do not get involved in the differences of opinion between and among countries, all of whom are our friends. As you know, with China, we have the Belt and Road Initiative, from which there have been tangible benefits to Sri Lanka, largely in terms of the development of our infrastructure. Our highways, our railroad system, our ports and harbours and so on – all of that is correct and we acknowledge it and we appreciate it. And we have a very good relationship with China. China has consistently supported us in international forums, such as the UN Human Rights Council on a very principled stand – that is human rights should not be used as a political tool for intervention in the domestic affairs of countries.
So, there has been consistency in that position, which has been a source of strength to us. However, none of that detracts from the special quality of the relationship between Sri Lanka and India, it is a special relationship partly because of circumstances relating to history, geography, economy...we are tied together.
That’s our fit, but we have developed that consciously and deliberately. And some of the current initiatives are an example of that. We have consciously considered in what ways the two countries could collaborate more closely for their mutual benefit in each of the sectors which I have spoken about.
Take the pharmaceutical sector. Sri Lanka has three investment zones which are producing pharmaceutical products, one in Kandy, one in Anuradhapura and one in the deep south in Hambantota. Now, Indian investment into pharmaceutical production in Sri Lanka will be very useful for both countries. Sri Lanka may be able to achieve self-sufficiency in certain kinds of drugs. Then, the tourism sector – the Ramayana trail, as many as 52 potentially important tourist sites are being developed. So, when you’re talking of the Trincomalee oil tank farm, the storage capacity will be important to India, the investment and the energy security will be important to Sri Lanka. These are complementary, that’s the important point. It is not a benefit accruing to one country at the expense of the other, that is far from being the truth. The difference is that there is an increasing realisation of this reality. And that is the main impetus for the current initiative to elevate the relationship to a different level, no longer transactional, no longer ad hoc, but imbued with confidence. That’s the difference.
Q. Saarc has obviously taken a hit because of the problems between India and Pakistan. Is that the reason why Sri Lanka is looking more towards Bimstec (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation)?
A. It is not the case that we have abandoned Saarc. It is not that we have come to some kind of conclusion that Saarc is a thing of the past and that it can no longer be developed or reinvented in some way as an institution that can still perform a valuable role. We haven’t come to that kind of pessimistic conclusion, but we also have a realistic assessment of the issues that prevent Saarc from realising its full potential. And also, one must not forget the achievements of Saarc, limited as they are. They’re not without significance, but particularly with regard to links in the education sector, the cultural sector, among business communities, among academics, the Saarc University in New Delhi. So it has played a role, it has served the member countries in many ways.
We do not see Bimstec as an alternative or a substitute for Saarc, but Sri Lanka is playing a critical role in Bimstec. Sri Lanka is currently the chair of Bimstec and we are going to have a summit in the near future at which Sri Lanka will handle over the chair to Thailand. We hope that Shri Modi will be able to attend that summit. The dates have been set, the last few days of March. We are contemplating a hybrid format. Some leaders will attend in-person and we do hope that Sri Modi will be among the leaders who will attend personally because if he does come, there’s much that can be done during his presence in Colombo. Therefore my own view is that such a visit will be opportune because of the tangible achievements of the last few months and the many other MoUs which are now in the pipeline and which will come to fruition in the near future; some in the defence sector, like the purchase of two Dornier aircraft, the 4,000-tonne floating dock. Then in the cultural sphere, the $15-million agreement for the development of temples that I told you about, an agreement between the Sushma Swaraj Institute and Bandaranaike Institute for international training, the national identity card project...It would certainly be a very visible manifestation of the growing closeness of the relationship, it is an intuitive closeness which is now receiving a very visible manifestation.
Q. Two issues that invariably crop up in India-Sri Lanka relations are the issue of the fishermen and the devolution of powers in the Tamil areas of Sri Lanka. India has asked for the full implementation of the 13th amendment to Sri Lanka’s Constitution and there have been reports from Sri Lanka about the drafting of a new Constitution. How do you see these two issues playing out?
A. The fisherman’s issue, I would say, is the only real constant irritant in the relationship between our two countries and it is really crying out for an early solution at this point. We can’t leave it as it is. It is not a satisfactory approach to the situation simply to concentrate on what to do after an incident happens – by the release of fisherman, what to do with the boats and so on. It is a perennial problem constantly repeating itself. Now there really needs to be a stable and lasting solution. There have been various suggestions and discussions among cooperative societies on the two sides, training of Indian fishermen for deep-sea fishing techniques and so on. But that is something that we need to take up seriously between the two governments and arrive at a satisfying solution in the immediate term.
On the second matter with regard to devolution, there is now an experts committee that is preparing a draft of a completely new Constitution. After all the present Constitution was promulgated in 1978, almost half a century ago and devolution of power will no doubt be one of the matters that will be addressed in the context of that overall exercise.
But I want to stress this - whatever is done, if it is to be implementable on the ground, will have to be backed up by a national consensus. There really has to be agreement, at least with regard to the basic contours. That is necessary. And that is the lesson to be learned from the negative experiences of the past – whatever one tries to do from the top and impose it on the rest of society, it simply does not work on the ground.
Q. Was the 13th amendment one of those negative experiences?
A. No, no. I’m not saying the 13th amendment was negative. The 13th amendment is part of the Constitution of Sri Lanka, it is very much there. There’s no debate about whether to put it in or not. It is there. The Constitution is a paramount law of the country, it is the highest law and the 13th amendment is an integral part of it. I don’t mind adding parenthetically – who abrogated the 13th amendment? The Tamil nationalists themselves, right? Because they gave their 16 votes in Parliament to help the previous government to call off the electoral process with regard to provincial councils, the elections have not been held for the last two years or more. So as we speak, there is not a single elected representative in any provincial council in the island, including in the north. So what has happened without legislating one word, the 13th amendment has been rendered a dead letter. So we want to change that situation, but who created that situation?
The Tamil National Alliance is addressing letters to Shri Modi but it is now not a question of greater power or lesser power, whatever power was devolved in terms of the ninth schedule to the 13th amendment has reverted to the hands of the Centre because of the conscious and deliberate act of the Tamil National Alliance in supporting the previous government to indefinitely postpone elections in the northern and eastern provinces. So that is part of the recent history of the matter which must not be forgotten. Now, of course, we are the present government. We have a responsibility, it is no good pointing fingers and blaming people for what happened in the past. We have to move on from here. And that is what we are endeavouring to do. But as a collective collaborative exercise in which all stakeholders will be consulted and all of them will be involved in a consensus that will make the arrangements work on the ground.