Sri Lanka, an indebted country, is on the brink of economic collapse. While Beijing remains reluctant to Sri Lanka’s loan request help, India provided its help on time.
According to Voice of America (VOA), India is taking the chance to regain its South Asia influence. Since January, it has committed about $3 billion in currency swaps, loan extensions, credit lines, medical support, food, and essential goods.
According to the VOA, besides India, Japan, the United States, and Australia are working together to contain China’s power rise in the Indo-Pacific region. India is helping Sri Lanka to receive a bailout from the International Monetary Fund while calling Japan to take action too at the previous Quad summit.
Bhavani Fonseka, at the Center for Policy Alternatives in Colombo, told VOA that India is a true friend for sending urgent humanitarian supplies to Sri Lankans.
According to Fonseka, New Delhi’s image as a “dependable ally” is being strengthened as it becomes one of Sri Lanka’s largest aid providers.
In an interview with Bloomberg earlier this week, President Rajapaksa said his country couldn’t tap a $1.5 billion from the Beijing credit line and that the country has yet to receive a response to its request for a $1 billion loan.
According to president Rajapaksa, even though China indicated that it would help Sri Lanka, Beijing added that “usually they don’t like” people lending more money to pay off old debts.
As the VOA put it, Sri Lanka’s economic meltdown due to many factors, including mismanagement and Covid-19 tourism lockdown; Chinese projects draining public finances while contributing nothing to boost the economy is another big deal.
India and the United States described China’s Belt and Road initiative as “debt trap diplomacy.” Small countries need their weak infrastructure to get modernized. By ignoring India, and the United States’ criticism, many small Asian countries have signed to China’s Belt and Road initiative, including Nepal.
Harsh Pant, head of Strategic Studies Program at the Observer Research Foundation in New Delhi, said that, [quote] “It is also important for other powers such as Western countries or Japan to offer credible alternatives to these countries, because the debate on the viability of Chinese-funded projects may happen, but if they don’t see any alternative, they will go back to China.” [end quote]