Col. Ajay K Raina, SM
This article is based on a few facts and safe assumptions that stand lined up in the following prose. The facts being referred to are: 1. Sri Lanka is sinking; 2. China and India are two powers that have conflicting interests in Sri Lanka to manage their security more effectively; 3. Many currencies in the world have been pegged with the US Dollar; 4. A credit line is much better than a loan when it comes to sincerely bailing out a debitor. And the assumptions are: 1. India has historically never been an expansionist and is not likely to be in future; 2. Between a power that creates conflicts and wars in this world and a power that helps others, the latter is a just one; 3. Greater or Akhand Bharat, in view of the real geopolitics, means India’s positive influence rather than the capture of territories now under the control of others.
Sri Lanka, our neighbour with thousands of years of relationship with mainland India, is going through a very tough phase. It won’t be wrong to say that the island nation is well past its tipping point. Reasons for the crisis have already been spoken about and written about by many. This article aims to suggest an unorthodox solution and a way forward for India, which has offered a significant amount of credit-line to Sri Lanka. With the Chinese PLA guarding their assets in Hambantota port and airport, our tiny neighbour is firmly stuck inside the infamous Chinese debt trap. Interestingly, however, while the Chinese share in the outstanding loan in the balance sheet of Sri Lanka is only 10%, its rate of interest and related conditions are majorly responsible for the port, the airport and the eastern corridor passing into the hands of the Chinese. As is well known, the Chinese are trying to set the well-known string of pearls around India.
As Sri Lanka entered the crisis, India was the first to respond. Surprisingly, the historical exploiters and debt trappers that the Chinese are, Dragon seemed to look the other way! In retrospect, it appears that China’s own reported financial instability was possibly the reason behind such a hesitation. As a result, the vacuum created offers an opportunity for India while the Chinese have been shying away. So, what can India do to exert itself and start its journey to become one of the world’s future superpowers (just one on that)?
It is well appreciated that credit lines can’t be eternal and monetary help, in isolation, will take Sri Lanka nowhere. Our other neighbour, Pakistan, is an example of the fact that loans don’t help beyond a point.The way forward being offered is a radical solution and will need strong political decision-making in India and Sri Lanka. In fact, Sri Lankan political leadership will have a tough time selling the idea to its public, and yet this bitter pill is one of the most assuring ways for Sri Lanka to get out of the sinkhole in which it finds itself today.
Broadly speaking, the plan will involve taking over the economy and defence of Sri Lanka without casting an eye on the sovereignty of that tiny nation whose total population is less than many individual districts of India. The first step will be pegging Sri Lankan currency with that of the Indian Rupee. It could be done by fixing a small range of one decimal place, as is the case with many currencies that concerned nations have pegged with the US Dollar. Such a step will stop the free-fall of the Sri Lankan Rupee and stabilise it. However, this step in isolation will not help if the Sri Lankan government begins to print more cash, thus, creating unwarranted tress on India’s currency! By implication, therefore, India will have to step in and take over Sri Lanka’s monetary and fiscal processes.
One major expenditure by Sri Lanka is on its defence and external security. If India takes over that responsibility, a lot of Sri Lankan resources can be diverted to kick-start their economy. Such a move, if implemented, will help India strengthen its maritime security and the area of influence of India’s Andaman and Nicobar Tri-Services Command. The sphere will extend much deeper into the Indo-Pacific. Some may see such a move as one adding on to own defence-related burden, but then this is how nations grow militarily. This is the cost a nation has to pay to haul itself up to another level in the global hierarchy. This is a call Indian leadership needs to take and weigh the pros and cons of filling up and sealing the vacuum or leaving it open for someone else to fill it up and occupy a point very close to India’s underbelly!
While economics and defence-related matters may remain with India, Sri Lankans will be free to run their country the way they want to run. Sri Lankans are proud, hard-working people and they are capable of pulling their country out of the crisis in half to one decade if it becomes a protectorate of India, similar to Bhutan (which has its own economic freedom too). With time, India can then handover economic affairs back to Sri Lankans and continue to protect it militarily.
If someone were to ask why such a step is necessary? Sri Lanka is not the only neighbour that is under stress. Myanmar is not too far, and Bhutan’s external debt to GDP equation is not very healthy either. Pakistan is on the verge of an economic and political collapse, but rather than getting involved directly, I2U2 (read UAE) and Saudis can take care of that unfortunate nation. Afghanistan, Nepal and Maldives may need India, too, and not too far in the future.
India, if it wants to realise its dream of a just superpower and achieve a much-misunderstood ambition of Akhand Bharat, actually has no option but to take a call now. All the goodwill earned through vaccine diplomacy needs to be taken to the next level. It is understood that the opposition parties in India will cry hoarse. But India, with more than 600 Billion USD as its foreign reserves and an economy that continues to grow despite some of the most adverse conditions around the world, can afford to do it. If the news about the internal issues of China (financial, industrial, power generation and fault lines inside the CCP) is correct, such an opportunity may never come again. To be honest, it may be now or never.
What has been outlined in the preceding paragraphs is just a macro-level suggestion. With the kind of domain experts that are available with the concerned ministries, actual execution can be done smoothly. Similarly, the political aspects in both countries will need some deft handling for such a plan to get implemented without any major friction.
History carries many lessons for future generations. Both during the times of prosperity and adversity, intelligent and far-looking entities rewrite their fortunes. During turmoil like the one witnessed globally today, an upwardly mobile, ambitious and assertive India needs to join the party. Sooner the better!
(The author is the Founder- Trustee of the Military History Research Foundation ® India.)
Follow our WhatsApp channel
