| Global Times | 2012-10-31 20:30:06
By Asanga Abeyagoonasekera
As India and China tussle for the future of the Asian century, the Indian Ocean has become a new locus for competition. Sri Lanka has strong bilateral relations with both China and India intermingled with historic ties.
In the recent past, with the changing global power dynamics, Sri Lanka's increasing relations with China have attracted a lot of attention in the context of the Sri Lanka-China-India relationship.
Even though formal diplomatic relations between Sri Lanka and China run deep into the history, as early as 1957, there is a marked acceleration in the China-Sri Lanka interactions after 2005.
Likewise Sri Lanka-India relations too have a rich diplomatic history which dates back to 1948. To quote the late Sri Lankan foreign minister Lakshman Kadirgamar, relations between India and Sri Lanka are "so ancient that they are lost in the mist of time."
After the end of a three-decade long conflict with the Tamil Tigers, Sri Lanka is focused on expanding and building the much needed infrastructure for economic development. The realist motives are the key to understanding Sri Lanka's relationship with both Asian giants.
China has in the recent past provided Sri Lanka with $5 billion in economic, military and technical assistance. During the recent visit of Wu Bangguo, Chairman of the Standing Committee of China's National People's Congress, 16 bilateral agreements on tourism, telecommunications and transport were signed.
China has become one of the main trading partners of Sri Lanka. The Hambantota Port development and $209 million airport, Norochcholoi coal power plant, Colombo Port expansion project, and irrigation and power projects running into the millions are just some of the projects in which China is involved.
Sri Lanka is greatly appreciative of China's assistance. Sri Lanka's hopes of becoming another Asian miracle will involve increasing trade with both India and China as well as exploiting various opportunities created by the growth of the Indian and Chinese economies.
China's growing ties with Sri Lanka are seen by some as part of Chinese expansionism, and consequently as a threat to the Indian strategic position.
Nevertheless, policymakers, analysts and scholars should take notice of Sri Lanka's needs as well, which include becoming more competitive in the region and accelerating economic development.
In the case of India, South Indian politics play a key role in determining relations with Sri Lanka, and as a result Sri Lankan-Indian relations have been seen as asymmetrical. The lack of a political solution to ethnic disputes and the rehabilitation process is a bone of contention in Sri Lankan relations with India.
However Sri Lankan-Indian trade relations have been strong with the signing of the largest foreign direct investment deal yet, worth $4 billion, for an industrial zone in Trincomalee, and investments made by private companies such as Airtel amounting to $1 million.
India has also invested heavily in rehabilitation and development in the north, with grants amounting to $1.7 million for the development of industrial zones in the region last year, and India committed $850 million for rebuilding the northern railway and to upgrade other infrastructure projects. Sri Lanka has also put more focus on a free trade agreement with India.
With the reality that Sri Lanka is traditionally considered India's backyard, the traditional ties between the nations are not in jeopardy as a result of the heavy Chinese investment.
Sri Lanka envisions a future role of being a strategic hub in five different ways; knowledge, commerce, navigation, aviation, and energy.
It is with these ambitions in mind that Sri Lanka is leveraging the commercial and trade opportunities that result from the growing economies of China and India. The island and the two great powers can work together to help maintain regional peace, stability, and growth.
The author is executive director of the Lakshman Kadirgamar Institute for International Relations & Strategic Studies in Sri Lanka. email@example.com
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