Following top Chinese diplomat Yang Jiechi’s meeting with President Gotabaya Rajapaksa of Sri Lanka earlier in October, U.S. Secretary of State Mike Pompeo arrived in Colombo on October 27 for a two-day visit. After signing the last of four foundational agreements for military ties with India, Pompeo warned the pro-Chinese administration in Colombo that “the Chinese Communist Party is a predator” while “the United States comes in a different way — we come as a friend and a partner.” Notably, Pompeo’s visit piggybacked off of the “2+2 Ministerial Dialogue” in India, which was also intended to curb Chinese influence in South Asia by strengthening U.S.-India military and diplomatic ties.
Despite Sri Lankan Foreign Secretary Jayanath Colombage’s commitment to a “neutral” and “India First” approach to tensions among India, China, and the United States, the pro-Beijing Rajapaksa administration’s actions speak louder than its words. Pompeo may want Sri Lanka to “make difficult but necessary decisions” to reject Chinese aid in favor of economic partnership with the United States; however, Sri Lanka has repeatedly chosen China for its economic and development needs. Pompeo’s visit did little to sway the Rajapaksa administration from China’s power of the purse and its history of Buddhist diplomacy.
SOFA, MCC, and China’s COVID-19 Diplomacy
Since the United States failed to renew its Status of Armed Forces Agreement (SOFA) with Sri Lanka and fell short of finalizing its $480 million Millennium Challenge Compact (MCC) accord in February, China has successfully amplified its efforts to cement economic relationships with Sri Lanka. Through a financial “art of war,” China has become Sri Lanka’s unfailing economic and diplomatic partner in need.
China first provided a concessionary loan of $500 million for COVID-19 relief at the urgent request of the Rajapaksa administration in March 2020. Shortly thereafter, in May, Sri Lankan officials approved a decision to borrow $80 million from China to improve road infrastructure. China then pledged another $90 million grant to the island nation for medical care, education, and water supplies soon after Yang’s visit. The two partners are currently negotiating terms for a $1.5 billion currency swap and a new $700 million loan, marking Colombo’s fourth loan request to Beijing this year.
China has also cemented its Sri Lankan foothold through health care donation diplomacy and the Belt and Road Initiative (BRI). In early June, China established the “China-Sri Lanka Belt and Road Political Parties Joint Consultation Mechanism” intended to strengthen “exchanges on governance.” By late June, China sent its third round of medical supplies to Sri Lanka, including 30,000 PCR testing kits, 30,000 disposable coveralls, 600,000 surgical masks, and 30,000 medical goggles.
In comparison, the United States has provided a mere $5.8 million grant and 200 ventilators to Sri Lanka for COVID-19 relief. India finalized a $400 million currency swap, and is considering an additional $1.1 billion swap to help with the economic fallout from the virus. To date, India and the U.S. lack a dollar-to-dollar competitive advantage in Sri Lanka that would have made Pompeo’s visit effective in steering the island democracy away from Chinese partnership.
With Sri Lanka owing over $5 billion to China, President Rajapaksa has faced pressure to distance Colombo from Beijing’s debt trap tendencies. However, he has rejected debt trap claims, stating that Chinese-funded projects “will help improve the living standards of the people.” The Rajapaksa administration is well-aware of its financial decisions, arguing that “in different times in world history, different countries have been the ones who have had the most amount of cash. And now it happens to be China.”
Beijing Consensus in Colombo
Even if internal pressure to reject China continued, Rajapaksa’s recent sweeping power grab allowing him to appoint top officials and dissolve parliament means that his decisions regarding China will go unchecked. The Parliament overwhelmingly approved the 20th Amendment to the Sri Lankan Constitution, concentrating absolute powers under the president and reversing reforms made to curb authoritarianism. The amendment lifted a ban on dual citizens holding office, which will allow “a sibling who is a U.S. citizen to enter Parliament, further strengthening the Rajapaksa family’s hold on Sri Lanka’s political power.” Currently, Rajapaksa’s older brother, former President Mahinda Rajapaksa, serves as prime minister and another brother and three nephews are lawmakers. This consolidation of power will leave the pro-Chinese Rajapaksa family in charge for years to come.
Moving forward, Pompeo must reopen dialogue about the MCC accord and shelve SOFA discussions for the foreseeable future if it hopes to counter China. Washington urged Sri Lanka to choose the United States over China to “secure its economic independence for long-term prosperity.” However, the MCC accord originally failed because Sri Lanka saw through its attempts at masquerading as a means of “economic independence,” while the strings-attached threat of SOFA hung in the air as a “very serious infringement on the country’s sovereignty.” If SOFA is replaced with a less invasive attempt at securing military and economic cooperation, Pompeo’s future dealings with Sri Lanka might be more successful at providing a “transparent” alternative to China’s less-than-pure economic intentions in the island nation, which is strategically located along major Indian Ocean maritime shipping and air routes.
As it stands, Sri Lanka has become a major target of Beijing’s tributary foreign policy and growing influence in South Asia. Given President Rajapaksa’s recent seizure of power and his family’s penchant for Chinese economic assistance, Pompeo’s mission to persuade Sri Lanka away from its strategic alliance with Beijing will continue to fail without major financial and military concessions for the pending MCC and SOFA accords from Washington.
Dr. Patrick Mendis, a former American diplomat and a military professor in the NATO and Pacific Commands, is a Taiwan fellow of the Ministry of Foreign Affairs of the Republic of China and a distinguished visiting professor of global affairs at the National Chengchi University (NCCU) in Taipei.
Dominique Reichenbach, an American David Boren scholar, served as a research intern and teaching assistant at NCCU. Their views expressed in this analysis do not represent the official positions of the current or past affiliation of their institutions nor the respective governments.