Rented umbrella in rain, or free charcoal in snow?

By N Sathiya Moorthy

Notwithstanding the statutory denial by the Chinese Embassy in Colombo, the British media reports of plans to construct a High-Frequency Short Wave (HFSW) radar station at Dondra Point, the country’s southern-most end, needs independent verification.

According to the report, the radar, with a 180-km range and 12-degree coverage, will help Beijing monitor the Indian Ocean.  Whether the report is true or not will be known once the construction work on the specified project site is completed, but if it does come up, it will be able to monitor ship-movement, including the navies of other nations, in the Indian Ocean, but the US, for long, may have blocked aerial surveillance of the Diego Garcia military base – supposed to be a fixed target for the new radar.

It is surprising that China is considering a radar station outside of the ‘occupied’ Hambantota territory, which is only 80 km away. As with Hambantota, China is said to be obtaining the Dondra Point territory, too, on a 99-year lease. It means that China will be around in these parts a few years more than the Hambantota deed permits, purely owing to chronological reasons. The general belief in such matters is that the lease deeds would also carry an extension period, or a non-closure period of a decade or so. It means that if neither side initiates moves to end the lease, it would be automatically extended for a term mentioned in the parent document.

The radar deal is said to be a part of the academic and research exchanges between the South China Sea Institute of Oceanology, Chinese Academy of Sciences and the University of Ruhuna in southern Sri Lanka. Much of the collaboration work is not discussed in the public domain, unlike most other things involving the nation’s academia.  It only implies that the collaborative project(s) is/are as much sensitive as they are secretive.

Back in business

That post-Covid China is back to business, and in this country in particular, became even clearer, when China Merchants Group chairman Miao Jianmin met President Ranil Wickremesinghe in April and reviewed the prospects of some large investment proposals. “We will further strengthen cooperation with local and foreign companies, and contribute to the nation’s economic recovery,” he told the President. Accordingly, the group is investing on building South Asia’s largest logistics hub in the Colombo Port, with a $ 393-million stake, taking its ‘accumulated’ investments (possibly including interests on past commitments) in the country to $ 2 b.

The logistics hub, when ready, is seen as a fall-back option for ocean liners, which at times find the transhipment ports in Singapore and Dubai, on either side of Colombo, congested. As may be recalled, making the nation’s reliable alternate maritime-hub, along with those for international air traffic, technology and IT, has always been an economic goal. So complete was the belief that candidate Mahinda Rajapaksa made it all a part of his ‘Mahinda Chintanaya’ election manifesto in his maiden outing in 2005. Of course, he was elected President that time and the next – though not for the stated objectives and committed promises.

During Jianmin’s visit, the two sides signed up for 15 projects in shipping, logistics, warehouse, duty free, fuel oil sales, construction, yachts manufacturing. The projects were identified two years ago, and Sri Lanka’s neighbour, Maldives, is involved in some of them. Incidentally, the grand signing ceremony, was held not in capital Colombo, but in the Hambantota territory, which is the possession and enjoyment of the investor-group – a symbolism, this?

Also around the time, the Chinese embassy announced that the eight-storey, 50,000 sq-m, out-patient department (OPD) building at the Sri Lankan National Hospital, has since been handed over to the host government. When opened to the public, the new block is expected to provide treatment facility to 6,000 patients a day.

All of it meant as much when Jianmin reportedly told host-government leaders that they (China) preferred ‘providing free charcoal in the snow’, not ‘rented-umbrellas in the rain’.  So generous and altruistic, it is, yes. Only that the visitor forgot for a minute that it does not snow in Sri Lanka, but only rains heavily – and a rented umbrella alone would serve the purpose, and not his free charcoal, which would also soak in the rains and floods.  That is to say, the lender continues to offer what the debtor has no real use for, like all those white elephant projects.

Having the cake…

Clearly, China seems to have linked the new projects to Beijing agreeing to bilateral debt-restructuring that is at the centre of the nation’s ability to receive the $ 1.9-billion IMF facility, which in turn is expected to pump in another $ 10-b in external aid and investments in the first round. That is to say, China wants to have its cake and eat it too, though it should have been the other way round, especially when Sri Lanka is hungry and Sri Lankans are angry – though mainly with themselves and their nation’s leaderships, both political and bureaucratic.

In real terms, it is much more than cakes, whether or not one gets to eat them. The Chinese ploy now implies that for Beijing to agree to restructuring on past borrowings, Sri Lanka will have to borrow more, and possibly on earlier terms that were among the causes for the nation’s current state of debt-driven economic despair and desperation. Barring the Chinese interest attaching to the radar project, there is a need for a closer study of the possible success rate for the other projects signed in now.

The reasons are not far to seek. After all, when Hambantota Port was constructed, Sri Lanka and Sri Lankans believed that they would make pots full of dollars by the hour for them to be able to clear the Chinese debt first and make even more dollars for the nation and its development. After all, no one could complain of the Covid pandemic or Zakahran’s Easter serial blasts at the time.

Yet, when it came to paying back China, like the proverbial village lender and his usurious ways, China ended up grabbing Sri Lankan territory. There was nothing that the nation and the nationals could do about it. After all, their South Asian traditions forbid them from thumbing their noses at the global debtor. That way, not just Hambantota, but even the nearby Matala international airport, named after Mahinda Rajapaksa, then President who had led the nation’s victorious war against the LTTE terror organisation, too continues to be a white elephant, for which the government obviously continues to repay China with market interest – at least on the books.

But then the question remains. Are the new Chinese investments going to bring jobs and family incomes to the country, unlike from Hambantota and the rest through the past years? The forgotten and equally controversial Colombo Port City (CPC) at least promised a high number of jobs for ‘skilled’ locals, but no one defined what skill sets were required. Anyway, the erstwhile Gotabaya Rajapaksa government promised to train local boys and girls for skilled jobs, but with that government gone, no one is talking any more either about the CPC or about the skilled jobs then on offer!

(The writer is a policy analyst & political commentator, based in Chennai, India. Email: sathiyam54@nsathiyamoorthy.com)