Sri Lanka in ‘One Belt One Road’: Challenges and Way Forward

(This paper  was presented by Ms. Shalika Dias , Jr. Research Associate of the Bandaranaike Centre for International Studies at the International Conference on ‘One Belt One Road’ Initiatives and New Modes of Globalization, organized by the Guangzhou Academy of Social Sciences and Open Times Journal, China, 10th-11th December 2016)

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Background, Principles and framework of ‘One Belt One Road’(OBOR)

The endurance of the global capitalist economic system has been challenged by asymmetrical global development, slowly recovering world economy, the arguable role of multilateral financial organizations, European refugee crisis, and Brexit. Emerging new economies like China, India, South Africa, Brazil, and Russia have to compete extraordinarily to explore new ways in order to protect their economic development and national survival as they are driving their national economies on an uncertain global capitalist economic system. New economies are striving to add new qualities and values to the existing economic system though it is unfeasible to change the existing system entirely. ‘One Belt One Road’ (hereafter OBOR) is an outcome of this significant attempt invented and initiated by China in 2013.

OBOR or ‘Silk Route Economic Belt and 21st Century Maritime Silk Route’ aims to promote the connectivity of Asian, European, and African continents and their adjacent seas. It practices the thousand year-old Silk Route Spirit (values) of peace and cooperation, openness, inclusiveness, mutual learning and mutual benefit. The values of the OBOR make global economic development and world peace interdependent.

By upholding the five principles of Peaceful Co-existence, the OBOR systematic initiative aspires to fulfill the five goals of enhancing intergovernmental policy coordination by coordinating national development strategies along the Belt and Road, facilitating connectivity through infrastructure development, expanding unimpeded trade by removing red tape on investment and trade barriers, developing financial integration through new banks like Asian Infrastructure Investment Bank (AIIB) and finally enhancing people-to-people relations through cultural and academic exchanges.

 Sri Lanka’s partnership in OBOR

Sri Lanka can uphold an enormous role in developing connectivity of OBOR-Maritime Silk Route due to its geographical middle location in the Indian Ocean. Sri Lanka has the potential of connecting the three global regions of Africa, South Asia and Southeast Asia which cover immense global territory and population.  However, the country’s poor infrastructure development in terms of roads and transport, power and energy, ports, airport and aviation has impeded Sri Lanka-OBOR connectivity. Sophisticated infrastructure could facilitate OBOR connectivity through the flow of capital and services.

However, China’s OBOR initiative endeavors to facilitate Sri Lanka-OBOR connectivity to tap mutual benefits by developing infrastructure of Sri Lanka. China is currently developing Colombo port, Hambantota port, Mattala International Airport, several internal highways and power plants in Sri Lanka. Facilitating these infrastructure projects will expand Sri Lanka’s sea and air connectivity, international trade and investments.

Colombo International Financial City is a successful outcome of Sri Lanka-China bilateral attempts in developing Sri Lanka-OBOR relations. Apart from China, many investors and developers from neighboring countries such as India, Malaysia, and Singapore have agreed to invest. This is a sign of the growing Sri Lanka-OBOR partnership.

It is certain that Sri Lanka will have a growing partnership with OBOR in future. Consequently, what would be a concern is how to sustain the relations by identifying the challenges ahead. Since current Sri Lanka-OBOR relations solely depend on Sri Lanka-China bilateral relations, the challenges may dent Sri Lanka-OBOR connectivity as well.  Strategic policy planning for tackling challenges will keep both Sri Lanka-China and Sri Lanka-China based OBOR relations in intact future.

Challenges of Sri Lanka-China and Sri Lanka-China based OBOR relations

  1. Growing overland connectivity

Beijing’s current concern over energy security highlights the importance of Sri Lanka’s location in the Indian Ocean. 2/3 of China’s oil requirements are fulfilled by the Indian Ocean. China heavily depends on Sri Lanka’s ports for bunkering and refueling purposes since the country lies just a few nautical miles away from the super-busy east-west shipping route.

However, China’s energy security has turned into an energy dilemma owing to the non-traditional security threats of maritime terrorism and piracy in the Indian Ocean. These complications have necessitated the Beijing administration to construct two overland oil pipelines and a highway without solely depending on maritime Sea Lines of Communications (hereafter SLOCs).

1.1     Pakistan-China Overland Oil Pipeline

Beijing and Karachi administrations expect to transport crude oil from Gwadar port to China’s Xinjiang Province through Azad Kashmir. The geographical location of the Gwadar port is making Beijing’s ‘Overland Oil Pipeline Dream’ possible. Gwadar port is located 72 km further apart from the Iranian border and 400 km away from Hormuz Strait which transports China’s crude oil from the regions of Africa and the Middle East.

1.2     Myanmar-China Overland Oil Pipeline

China started the construction of parallel oil and natural gas pipelines between the Kyaukpyu deep seaport on Burma’s Arakan coast in the Bay of Bengal and Kunming in China’s Yunnan Province and probably beyond.

1.3     Bangladesh-China Highway

China is constructing a highway from Bangladesh to Kunming through Myanmar parallel to the construction of Chittagong port as well as the reconstruction of the Sonadi port. Beijing expects to export oil from Chittagong Sonadi ports to Kunming through Myanmar by utilizing the newly constructed highway.

Overland oil pipelines and highway can devalue Sri Lanka’s geographical middle location in the Indian Ocean. Sri Lanka’s small island capabilities in developing network and connectivity of Maritime Silk Route heavily depends on the number of cargos crossing Sri Lanka’s ports. Pipelines, highways as well as China-Pakistan Economic Corridor and Cargo train (Silk Route Train) from China to Iran may increase overland transportation and connectivity while giving less significance to Sri Lanka’s ports.

  1. Geopolitics of India

Power politics of India in the Indian Ocean Region (hereafter IOR) have resulted in the appearance of new challenges for Sri Lanka-China bilateral relations. India is practicing new approaches in power politics in the IOR, owing to China’s new presence in the region.

China’s presence in the IOR is evident in the construction of port facilities in littoral states of the IOR, Hambantota-Sri Lanka, Gwadar-Pakistan, Chittagong-Bangladesh and Kyaukpyu- Myanmar by supplying loans, materials, technical assistance and Chinese laborers. Energy security and economic development are key objectives of China’s new presence in the IOR particularly in Sri Lanka.

Although China is constructing ports by covering major oil shipping routes, it has naturally covered India since these ports are located in neighboring countries like Pakistan, Bangladesh, Myanmar and Sri Lanka. India is concerned that China will build naval bases in the ports that they are currently constructing particularly in Sri Lanka and deploy naval forces and nuclear weapons by obstructing sea lines of communications in order to weaken their economic and military sea power.

This new challenge has directed Sri Lanka to shield existing Sri Lanka-China relations while balancing relations with neighboring India, since balanced and transparent relations with both India and China can ensure the survival of peaceful OBOR.

  1. Deficient of Coordination Mechanism

Although Sri Lanka-China bilateral relations are widening, very few people are aware of the outcomes of these relations due to deficient internal mechanism in making people aware. People have the ability to gather basic information about diplomatic visits, number of treaties signed but have deficient information on their long-term outcomes. No committee has been appointed to follow up on the renewal process of treaties according to the time and present context. Politicians, entrepreneurs and journalists analyze these relations according to narrow individual perceptions which they develop through electronic media. In this backdrop, civil society can distrust Sri Lanka-China bilateral relations. It is time dependent and context dependent.

This challenge is growing day by day and it can even result in a negative perception of OBOR too, since Sri Lanka has a China based OBOR partnership.

Long-term sustainability of Sri Lanka’s partnership in OBOR profoundly depends on public awareness. Apart from a few government policy planners, entrepreneurs, academics, students and journalists, OBOR is an unknown phrase to many Sri Lankans. It is unfeasible to sustain OBOR partnership without having a national will and national voice for it. Sri Lankan academics and journalists should play a bigger role in order to widen the awareness on OBOR. However, their writings are quite deficient due to broadening lack of sources to collect in-depth facts.

Conversely, small scale entrepreneurs have the ability of expanding Sri Lanka-China trade and as an extension developing Sri Lanka-OBOR trade relations. However, lack of information on setting-up new businesses with China and other OBOR partners, information on their interests, capabilities and reliability have turned into barriers. Obviously, Sri Lanka-China-OBOR relations would sustain if there is a qualitative coordination mechanism.

Ms. Shalika Dias , Jr. Research Associate

Bandaranaike Centre for International Studies (BCIS)

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