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Home Opinion

Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis

China is trying to strengthen its ties with Sri Lanka by sending financial aid in its worst-ever economic meltdown.

Sakshi Gupta by Sakshi Gupta
April 22, 2022
in Opinion
Reading Time: 3 mins read
Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis
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The situation in Sri Lanka remains critical as the country is witnessing its worst economic meltdown ever. The president of Sri Lanka, Gotabaya Rajapaksa, has lost his parliamentary majority. At the same, there is a strong demand from the opposition members and former allies for the government to step down. The Opposition is trying to form a joint coalition to come into power in the island nation and solve the economic crisis that has turned into a big humanitarian crisis. It has resulted in high inflation, shortage of essentials and Long power outages. 

Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis
Image Source: thegaurdian

Inflation has increased the price of essentials to such a high rate that the common man has become unable to purchase them. For this reason, the common people have taken to the streets to protest, which has become violent over time. The government has been using armed forces to curb the protests and we can only expect the situation to become more grave in the coming days leading to starvation. 

Table of Contents
  • The Public debt
  • India will have to be ready for tackling China
  • Stabilising its Economy

The Public debt

Sri Lanka has lost the foreign reserves that it had to pay to its lenders and it has only nearly $2 billion in its treasury now. As per an estimate the country has to pay $7 billion this year to lenders and more than half of it belongs to the International Monetary Fund (IMF). 

Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis
Image Source: bloomberg

The primary cause of the immediate financial crisis is the lockdown forced by the pandemic that reduced the revenue from the tourism sector in the Island nation. At the same time, the Easter bombings had also impacted the tourism sector earlier. Even the food production has been reduced by 75% due to the government’s decision to ban the chemical fertilisers and forced the farmers to use organic fertilisers.  

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But, the problem is not something that has been triggered recently because the nation’s public debt grew at a gigantic speed in the last decade and there have been no arrangements to repay it. 

India will have to be ready for tackling China

The influence of the Rajapaksa family in the public sphere of Sri Lanka increased due to the Easter bombings that brought victory to Gotabaya Rajapaksa. Consequently, 5 members of the Rajapaksa family are holding prime positions in the government of the island nation which has brought the nation to the verge of starvation. The president of Sri Lanka has negated the suggestion to approach the IMF while the situation began to decline earlier. Now, after the situation has turned worse, the country is trying to approach the IMF in the coming days. 

Sri Lanka had to give away its Hambantota Port and 15,000 acres to China. As a result, China has initiated a power project in the Indian Ocean becoming a threat to India. China has lent more than 1.5 billion dollars to Colombo. On the other hand, India has given humanitarian aid of $1 billion for food and essentials to India. India needs to take an active step to reduce the chances of Sri Lanka teaming up with China in its financial crisis because it could have adverse security and military consequences on India. 

Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis
Image Source: indiatoday

Stabilising its Economy

Another concern of India is the chances of Tamil Insurgency in India which could be a problem for India at this point because it cannot sustain them now. From an economic point of view, the Indian government is concerned because Indian goods are still halted at Sri Lankan ports for days now as there is no labour and fuel. 

However,  the visit of the External Affairs Minister of India at the March end of this year has been a reassuring gesture along with India announcing a line of credit for the island nation.  It has sent a message among the Sri Lankan masses that India is trying to help them. India can play a key role to support the tourism and tea industries in Sri Lanka which will enable them to stabilise and rebuild their economy. So, India’s role shortly to help Sri Lanka will be significant to note. 

Insurgency and China: The Arising Problem for India amidst Sri Lanka Crisis
Image Source: orf

At the same time, the Sri Lankan government has a responsibility to maintain law and order in this grave situation of economic collapse. Even India has to take steps in helping Sri Lanka avert the humanitarian crisis and keep China at bay in the situation. 

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