Analysts see geopolitical designs behind India’s largesse

Finance Minister Basil Rajapaksa’s claim this week that there were no conditions attached to the US$ 1 billion Indian credit line was met with outright scepticism by economists while others called for caution, at least going forward.

“It’s a game of chess and India has checkmated us in such a fashion that we don’t have any moves other than to shake their hand and go ahead with them unless we want our kings killed,” said a retired commander of the Armed Forces and maritime defence analyst, wryly. He did not wish to be named. 

Amidst an unprecedented economic crisis, all options available to Sri Lanka involve varying degrees of pain, said H.M.G.S. Palihakkara, veteran diplomat and former Secretary to the Ministry of Foreign Affairs. The two choices for immediate funding assistance are an apolitical multilateral source like the IMF or bilateral geopolitical sources.

“The latter’s conditions are generally geopolitical in character, often non-negotiable and involve our sovereign assets,” he said. “Parceling out the country to geopolitical creditors could be costly in terms of economic and national security as well as foreign policy interests.”

The IMF’s requirements, however, are negotiable and based on Sri Lanka’s own plan, if there is one. They generally involve fiscal and budget discipline and prudence.

“The need is to consider an apolitical rather than geopolitical source for such emergency assistance, even if it is not politically expedient,” he urged. “ Whether this is too little too late since the authorities have been prevaricating so much for so long, is of course another story.”

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