When Americans bear gifts

Ambassador Mahinda Samarasinghe has had an audience with US President Joe Biden in the Oval Office itself. They are reported to have discussed matters of bilateral interest, and the US has pledged to help Sri Lanka. No sooner had the duo met than a high-level delegation representing the US Department of State and the US Department of Treasury flew to Colombo. The members of the delegation include Robert Kaproth, Deputy Assistant Secretary of Treasury for Asia, and Ambassador Kelly Keiderling, Deputy Assistant Secretary of State for South and Central Asia, according to the US Embassy in Colombo. Why is this flurry of diplomatic activity?

Sri Lanka’s economic crisis cannot be the sole reason why President Biden granted an audience to Ambassador Samarasinghe. The US government says its officials will ‘explore the most effective ways for the US to support Sri Lankans in need, Sri Lankans working to resolve the current economic crisis, and Sri Lankans planning for a sustainable and inclusive economy for the future’. They may do so, but it cannot be altruism that has made them fly all the way here. What’s up Uncle Sam’s sleeve?

Speculation is rife in diplomatic circles that Washington has resumed efforts to get Colombo to sign SOFA (Status of Forces Agreement). About two years ago, the US decided to terminate an offer of USD 480 million as development assistance under the Millennium Challenge Corporation Compact (MCCC) when Sri Lanka turned it down on the recommendations of a special committee President Gotabaya Rajapaksa appointed to look into it. Prof. Lalithsiri Gunaruwan, who headed the four-member committee, told this newspaper in December 2020 that the MCCC, if signed, would undermine Sri Lanka’s sovereignty. The committee report said that although the US compact was categorised as a development programme, if coupled with ACSA (Acquisition and Cross Servicing Agreement) and SOFA, it could pose a threat to Sri Lanka. It is against this backdrop that Washington’s renewed interest in supporting Sri Lanka at this juncture should be viewed.

It is being argued in some quarters that the perpetuation of Sri Lanka’s economic crisis is advantageous to the western bloc bent on taming China, which has Sri Lankan leaders on a string, and that may be the reason why Colombo is not receiving any more financial assistance for fuel imports. The fuel crisis is making Sri Lanka’s economy scream and people riot. The Rajapaksa-Wickremesinghe government was expecting an extension of the Indian credit line for fuel imports, but its hopes have been dashed; it is now willing to do anything for a few million dollars.

Any port in a storm, as they say, and given its sheer desperation for dollars, Sri Lanka may choose to sign any agreement if there is forex in it. It is a case of Hobson’s choice for Colombo thanks to the Rajapaksas, who ruined the economy. The western bloc accused the Chinese of having made Sri Lanka cough up a port by goading it into a debt trap. The country is now apparently in an aid trap, and at this rate it may be left with no alternative but to sign SOFA. One may recall that Ambassador Samarasinghe, who was seen at the White House, the other day, was the Minister of Ports when the Hambantota harbour lease agreement, which was favourable to China, was inked!

The unfolding events lend credence to the Opposition’s claim that the Rajapaksa government systematically ruined the economy and created conditions for the country to become increasingly dependent on the rivals of China, especially the QUAD members, and do their bidding. The opponents of this argument will have a hard time explaining why Basil Rajapaksa, as the Finance Minister, did not care to manage the country’s foreign currency reserves and seek IMF assistance. He even skipped parliamentary sessions after presenting Budget 2022, and did not meet the Central Bank bigwigs for months, according to media reports. He just looked on while the economy was getting into a tailspin, and today a fire sale of Sri Lanka’s strategic assets is on. Maybe he considers his missions accomplished, as his political rivals say.