If anyone has gained from Sri Lanka’s devastating pro-democracy protests, it must be India. And some, like Sri Lanka’s main opposition leader Sajith Premadasa, are ready to acknowledge this. He said, “India has played a very crucial role, especially at this critical juncture… India has come forward and supported us.” Since Sri Lanka’s bold embrace of China’s BRI and leasing China the Hambantota Port in 2017, India and the Western media have excessively demonised the Rajapaksa regime for falling into dept-trap diplomacy with China. But before we jump to China, it would be interesting to browse Sri Lanka’s history a little.
Sri Lanka has been a victim of a civil war from 1983 to 2009, which means that it has been a war-zone for almost 26 out of the 35 years it has gained independence — back in 1948. This war was initiated by a faction of Sri Lanka’s Tamils that comprise about 11.2% of the country’s population, whereas the majority of Tamils — approximately 88.4% — live in the Indian province of Tamil Nadu. As it happened, the Liberation Tigers of Tamil Eelam (LTTE) was covertly backed by India, and some of its several training camps were situated in Uttarkhand, Himachel Pradesh and Tamil Nadu. Ironically, the 1991 assassination of Rajiv Gandhi by an LTTE operative took place when LTTE leader Prabhakaran became a skeptic of Rajiv’s loyalty with his group.
India’s initiation of the war in 1983 has some important precursors that led it to believe that it could perform a successful venture in Sri Lanka: India has kept land-locked Bhutan as a client state whose foreign policy was in its hands since the 1949 Friendship Treaty; Sikkim’s sovereignty was snatched and it was made a part of India in 1975; Pakistan was broken into two by India’s backing of Mukti Bahini in 1971. So, India was in the air of victory, and it thought that it could break Sri Lanka too. But it was wrong and LTTE was defeated.
After the war, Sri Lanka’s economy started booming. The tourism-based economy thrived, bringing in jobs and revenue of billions of dollars — as did the IT and textile industries — and at the same time the country saw several mega infrastructure projects. However, between 2010 and 2020, Sri Lanka started accumulating large piles of foreign debt. According to an estimate, about 18% of this debt is owed to China while the rest of the 82% is owed to India, Japan, ADB, World Bank and to market borrowing. The biggest share, almost 50%, is from market borrowing via issuing sovereign bonds. And according to Reuters, US-based BlackRock, Inc. and UK-based Ashmore Group Plc. are two major lenders that have taken Sri Lanka’s sovereign bonds. This means that although China’s debt may be just as bad, the real reason for Sri Lanka’s predicament may be residing on other continents.
This all tells us that taking loans on interest is a bad idea, and if the market is being too generous in lending you so much money, then there is something very wrong. The alarm bells should ring immediately; a conspiracy is brewing to send you down the spiral that ends in default.
This is exactly what IMF, World Bank and other international lenders want, for you to take their money, default, and sell your whole country to them in its place. This storyline is not new, we have seen, within the decade, several states including Greece, Ireland, Portugal, Spain and Cyprus collapsing under severe sovereign debt crises. Yanis Varoufakis, former Finance Minister of Greece and an ardent opponent of Capitalism, has equated the bailouts given by the Troika — IMF, the European Commission, and the European Central Bank — as permanent ‘prisons’, from which these countries won’t be able to escape because of the spiraling and slippery nature of the prison. Similar is the case with all most developing states; they are offered loans from western institutions, and many times even forced into taking them.
Coming back to Sri Lanka. The solution that has come to the fore is again to renegotiate with IMF, have the previous loans restructured and be in a position to take more loans — a recipe for permanent slavery. And between all this chaos, what is India doing? It has been offering around $3.5 billion as loans, credit lines and currency swap — meaning remain enslaved, just change the masters. IMF and India are both making it clear to the Sri Lankans that more business with China will not be tolerated. What India and the US could not do with tons of diplomacy in the last two decades, they have perhaps done successfully with a combination of pulling a few debt-stings and a sprinkle of ‘colour revolution’.
Yes, several analysts have already akin Sri Lankan protests to a Colour Revolution. It is being said that the same time Pakistan’s Imran Khan faced a no-confidence motion, the Sri Lankan rupee was crashing, losing 70% of its value. This propelled a dollar shortage and ensued soaring cost of living including fuel and food shortages. Several months earlier, rating agencies had been downgrading Sri Lanka’s credit rating, which in turn made it difficult for the government to roll over the 7 billion debt payments to sovereign bond traders. This led to a default, in turn forcing renegotiations with IMF and shifting Sri Lanka from the socialist camp to the capitalist camp.
But if it does, if it leaves China for the US, will it regain the prosperity it had reached 2-3 years ago? Or will they be triggered with austerity measures and asked to open their markets to FDIs, who can freely exploit them and later forsake them with impunity when they are done. If all this is true, then those behind the Sri Lankan protests have been successful in attaining a Full Spectrum Dominance (FSD) and in remotely conducting an Over the Horizon (OTH) operation thereby achieving excellence in hybrid warfare, destroying a country with no-boots-on-ground, and snatching from the people the means of their livelihoods.
Published in The Express Tribune, July 29th, 2022.
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