Diplomacy Editors' Picks Politics

Waking up to the debt trap

Image Source: The Economist

This post was originally written on December 23, 2018, in answer to the question “Why is it that both Sri Lanka and the Maldives have done political somersaults regarding ties with China and India?”

When in May 2018, the 93-years old Mahathir Mohammad came to power in Malaysia the first thing he did was to visit China. His message, in the words of ‘The Economist’ magazine, was something like this :

Lovely projects, but since coming to office we’ve discovered we can’t afford them. We can’t afford them because we now know how inflated the costs are, and how skewed the deals are in China’s favour — or plain fishy.

In my opinion, there are three main reasons behind this change in the position of both Sri Lanka as well as the Maldives with respect to India & China.

  1. The two countries, among many others, have finally woken up to the dangers of China’s debt trap diplomacy.
  2. Monumental mistakes by pro-China leaders in both countries.
  3. India’s changed attitude towards its neighbours from acting as a Big Brother to a more matured position wherein the neighbours are seen as partners.

China’s Debt Trap Diplomacy

Just like Malaysia, other countries too are finally waking up to the dangers of the Chinese debt traps. “We do not want a situation where there is a new version of colonialism”, Mahathir Mohammad said on his visit to China. About a month ago, Sri Lanka reversed a $300 million deal Chinese housing deal. Sri Lanka has been organizing conferences calling for a free & open Indo-pacific which is another way of saying, “We don’t want the Chinese military around Sri Lanka.”

As Solih comes to power in the Maldives, he too has promised to reduce the Chinese debt obligations. There have been talks about India giving assistance to the Maldives to pay off their debt to China. While the $1 Billion dollar assistance news has been denied by the Maldives, India will help the Maldives in whatever way possible.

Chinese people have started to question BRI. They question why China is spending so much outside the country when the country itself needs all that money. As expected, the voices have been silenced. But It must be realized that China has deep pockets & the countries need that money.

Domestic Factors In Sri Lanka & Maldives

Rajapaksha could have come to power in the next election but he chose an undemocratic route for coming to power.

Similarly, the blatant dictatorial tendencies & the utter disrespect for democracy that Abdullah Yameen showed in the past year contributed to his defeat in this election. Both Rajapaksha & Yameen are pro-China. And their rivals, Wickramasinghe & Solih are pro-India. Both the pro-China leaders have acted in an authoritarian fashion & subsequently faced ire from the people. In a way, the problems have solved themselves.

India’s Changed Attitude

We cannot really say that this is a permanent shift in India’s attitude. For long, India has been accused of being insensitive towards its neighbours. It has been accused of having a ‘Big Brother’ attitude. Most countries in South Asia are dwarfed by its large neighbour & they fear not only geostrategic dominance by India but also cultural dominance. Hence, most countries define their nationalism not in terms of some unique identity but in terms of being “Not-India”. This also helps the authoritarians & fundamentalists in those countries to win power through anti-India rhetoric. India, which sees itself as the successor to the British Raj in South Asia, looks at South Asia as its domain where foreign powers are not allowed entry.

The Gujral Doctrine asked India to make unilateral concessions to our smaller neighbours in order to win their trust. “Just help them. Don’t expect a give and take.” While India has slowly improved its image in South Asia, it commits blunders once in a while — like the Nepali blockade in 2015. Such a policy helps China get a foothold in South Asia.

And China has deep pockets too. So, when India didn’t pay attention to a country’s needs, China would say, “Oh, just take the money. And I don’t care if you are a dictator.” Just like India got aid from both USA as well as USSR during the Cold War by threating to switch to the other side, countries in South Asia are using the same tactic with respect to China & India. They have become the new “clever calves that suckle from two cows”.

While India censured Yameen’s violations of democratic norms & the proclamation of emergency in the Maldives, it knew its limits this time. Many experts asked India to intervene militarily. When the Maldivian government refused to continue providing the visas to Indian nationals in the Maldives, India did not protest, saying that it was their internal matter. And thank god, things turned well in the end & Solih is in power now. Similarly, when Oli came to power in Nepal, India was quick to send Sushma Swaraj to Nepal even before Oli’s swearing-in ceremony. Even for Solih swearing-in ceremony, Modi made a point by his attendance.

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Source URL: Medium

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