Jubilant Cabraal and despondent citizens

If Cabraal and the Government think that they could totally avoid IMF partnership in the search for a long-term solution, they would only be fooling themselves

The currency swap deal with China for $ 1.5 billion has boosted Sri Lanka’s dollar stock to exceed $ 3 billion and made CBSL chief Nivard Cabraal jubilant. He is confident of further injections from other sources in addition to introducing higher interest rate for forex deposit accounts, a measure welcomed by the banking community. 

Among the other sources, India’s $ 1.9 billion assistance of which $ 400 million by way of currency swap, $ 500 million credit from EXIM bank to finance petroleum imports and the balance one billion for food and medicine imports, is the most significant. In the meantime, Bangladesh also has given a three-month extension on its $ 200 million currency swap that was to mature by 31 December 2021. 

However, no one knows the conditions attached to the Chinese swap and presumably it would imply that it would have been tied mostly to imports from China. This would be one way of dumping into the Sri Lankan market unsold and substandard products made in that country – a dragon’s gift. The saga over the ship that carried bacteria mixed natural fertiliser is still fresh in peoples’ mind. Yet, can a beggar be choosy?

Even then, these are all palliative measures and not solutions to cure the disease permanently. If Cabraal and the Government think that they could totally avoid IMF partnership in the search for a long-term solution, they would only be fooling themselves. It appears that they have left the door ajar and not fully shut. The trade minister is reported to have said that if people would be willing to bear the consequences, Government would be ready go to IMF. 

This minister with underutilised cerebral capacity (there are a few more like him in the cabinet) who, only a few months ago, claimed that Rs. 7,500 per month would be enough for a family of three to live comfortably, and is now advising those families to grow vegetables in the backyard, should remember that it was not the people who caused this tragedy in the first place. It was the corruption in and mismanagement of his government plus whimsical decisions on unachievable goals by the President that brought this economy to virtual bankruptcy. 

All that the regime achieved so far is to produce a new class of plutocrats headed by one family. This Government has betrayed the trust placed upon by those who elected it. It is time that it packs up and leaves allowing people to choose an able and uncorrupt leadership that would first make the current managers and looters accountable for what they have done, before embarking on a mission of repairing and restructuring the entire administration and economy. 

Be that as it may, the Indian and Chinese rush to offer economic and financial assistance to a beleaguered Rajapaksa regime took place in the background of tit for tat actions between the two regional giants, and the regime being caught in the middle trying to satisfy both masters. 

Although the Indo-China rivalry in Sri Lanka has a long history, the recent manoeuvres started with China suspending its Sino Soar Hybrid Technology plan to build a hybrid energy system in the northern islands of Analaitivu, Neduntivu and Nainativu, because of alleged ‘security threat’ from a ‘third party’, implying India. China is now building 12 solar power plants in the Maldives. This happened in the middle of negotiations between India and Sri Lanka to create a joint venture corporation between the two to restore and operate the oil tank farms in the strategically important Trincomalee waters. 

Finally, the recent visit by the Chinese High Commissioner and his team to Jaffna, where they paid visits to the rebuilt Jaffna Library after it was burnt out in 1981, a seafood factory in Mannar built with Chinese investment, and took a boat ride to the legendary Adams Bridge closer to Indian shores before going barefooted with open chest while wearing veshti and carrying flowers and camphor to pay obeisance to the Hindu deity Kandaswamy in Nallur temple. 

This drama was obviously staged to irritate India. Otherwise, where was this love towards Tamils all this time? All this was obviously intended to irritate India. One should not be surprised in this context if the same ambassador decides to visit a mosque accompanied by the ACJU chief, just to annoy a Muslim hating Narendra Modi! Finally, to cap everything the Chinese Foreign Minister Wang Yi is expected to visit Sri Lanka in early 

January 2022. 

Sri Lanka’s economic bankruptcy is pushing its government deeper and deeper into foreign policy difficulties. Both are the regime’s own creations. COVID only aggravated the troubles. While the Government refused to listen to experts on economic, financial and health matters and left them in the hands of the Viyathmaga cabal and military, its foreign policy was left to amateurish politicians to handle. It was this amateurism that caused the debacle in Geneva 

in 2020. 

While Prime Minister Mahinda Rajapaksa flew to Tripathy to seek help from Lord Venkateshwara to save his regime, the Chinese Ambassador travelled to Jaffna, may be to seek assistance from Lord Kandswamy in Nallur to bring the Prime Minister and his Government closer to China and away from India. In the middle of all this a despondent population is clueless to find a new leader who could release them from the clutches of an excruciating economic misery.         

(The writer is attached to the School of Business and Governance, Murdoch University, Western Australia.)