Last month, Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port at an estimated cost of $500-$700 million. The Colombo port which transports almost 90% of Sri Lanka’s seaborne goods and is Southwest Asia’s busiest port remains strategically critical as it connects four key geographies: Europe, the Middle East, Africa and Asia. Sri Lanka hopes to leverage regional economic dynamism to its advantage by enhancing the capacity of this port and regional transport connectivity.
China’s shadow looms large over Sri Lanka ever since the island nation was almost forced to cede control over Hambantota port to China on a 99-year lease after falling into a serious debt trap. Despite political change in the country, it found it difficult to shake off the yoke of Beijing and so it has been keen to involve other regional players, in particular India and Japan, in other key projects. But India’s role in the country continues to generate intense passion with reports emerging last year of a serious rift between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe on the issue of India’s participation in the project. This, despite the project being a trilateral one with the involvement of Japan. Japan’s longstanding economic ties with Sri Lanka ultimately seem to have made the deal palatable to the local polity.
At a time when China’s Belt and Road Initiative (BRI) is reshaping Beijing’s engagement with South Asia, there is a new sense of urgency in New Delhi to formulate an adequate response. India’s engagement with Japan is emerging as a key variable in this matrix and Sri Lanka is becoming a nodal point. Apart from the Colombo Port, the two nations also plan to work jointly in developing the Trincomalee port in eastern Sri Lanka in support of their Free and Open Pacific Ocean and Indian Ocean strategies. India is also working with Japan in developing an Asia-Africa Growth Corridor (AAGC), aimed at linking the African continent with India and countries in South-Asia and South-East Asia.
The US is also keen on giving some belated economic heft to its Indo-Pacific vision by enhancing the financial support that Washington provides to countries in the region through a proposed agency, the US International Development Finance Corporation (USIDFC). In its recently released Indo-Pacific Strategy report, Pentagon has come down heavily on what it terms China’s efforts to “reorder” the Indo-Pacific region to its advantage by leveraging military modernisation and predatory economics to coerce nations even as it describes India as a partner with which Washington shares a “common outlook” about the Indo-Pacific. The report argues that “India through its ‘Act East’ policy, continues to make significant security, economic, and development investments to secure the vision of a free and open Indo-Pacific region.” Taking aim at Beijing, the US is asserting that its “vision for a free Indo-Pacific is one in which all nations, regardless of size, are able to exercise their sovereignty free from coercion by other countries,” and is one “that promotes sustainable growth and connectivity in the region.”
In line with this, the US Acting Defense Secretary Patrick Shanahan in his long-awaited keynote speech at the Shangri-La Dialogue on the Trump administration’s “Free and Open Indo- Pacific” vision strongly argued that the US is “not going to ignore Chinese behaviour.” When he suggested that “perhaps the greatest long-term threat to the vital interests of states across this region comes from actors who seek to undermine, rather than uphold, the rules-based international order,” the target was not lost on anyone. China’s defence minister Gen. Wei Fenghe responded by pushing back at the same platform by underling that“over the years, some have been recklessly hyping up, exaggerating and dramatising the ‘China threat theory,’ partly due to the lack of understanding of China’s history, culture and policies, but more likely due to misunderstanding, prejudice, or even a hidden agenda.”
As tensions between the US and China escalate, regional states in the Indo-Pacific do not have the luxury of time on their side. The US, India, Australia and Japan, while underlining their efforts to maintain universal respect for international law and freedom of navigation and overflight in the region have come out in strong support of an ASEAN-led mechanism to preserve and promote rules-based order in the Indo-Pacific region. This group of nations, known as the Quad, have been slow to get off the ground but now find that they have nowhere else to go but to enhance their collective efforts at managing regional turbulence. Smaller states in the region will be better off as alternatives to China emerge. It is incumbent upon major regional powers such as India and Japan to be bolder and more decisive in offering regional leadership. This is what this moment in history demands from key players in the region.
Professor Harsh V. Pant is Director, Studies and Head of the Strategic Studies Programme at Observer Research Foundation, New Delhi.
