South Asia and Beyond

‘Different Systems Make Up The Indo-Pacific; Accept That Reality’

 ‘Different Systems Make Up The Indo-Pacific; Accept That Reality’

COLOMBO: The geopolitics of the Indian Ocean is completely different from that of the Pacific, says Sri Lankan President Ranil Wickremesinghe. In an exclusive interview with StratNews Global Editor-in-Chief Nitin A. Gokhale, he said both areas need to be dealt with separately. He also spoke on a range of issues, including the current state of the economy, Sri Lanka’s ties with India and China, the controversy over a Chinese ship docking at Hambantota, etc. Here’s the full transcript of the interview.

Q: Hello and welcome. Sri Lanka has seen unprecedented chaos and headwinds in its economic condition as well as political turmoil in the past five or six months but slowly and gradually the country is coming out of that period of trouble. And leading that effort to bring the country back to normal and bring the economic condition to stability is President Ranil Wickremesinghe. I’m delighted to welcome him on this programme. President, thank you for giving us this time and let me start straight away with where is the economic condition now what is Sri Lanka looking at as far as the solutions to the problems are concerned?

A: We have had discussions with the IMF; we have come to a staff level agreement but now we have to deal with our creditors we didn’t have to do that earlier; we didn’t have this serious crisis but now we have to deal with our creditors. We are unable to service our debts; once we come to a conclusion with the creditors, we will go back to the IMF, to the IMF board. We are implementing some of the prior actions that are required under the staff level agreement and we’ve started discussions with the creditors, the bilateral creditors; once that’s over we will move to the private creditors. I am going to Japan to discuss with the Japanese government their role. They have already started some talks with India but at a lower level. We are just talking starting talks with China we’ll have to go to a high level but we have to now see whether we have to do it before the Party Conference or after. Since we have just started the talks it may have to be just after (the party conference)

Q: You mean with China it may have to be after the Congress

A: Yeah but we first talk with Japan and then we’ll have discussions with India.

Q: How has is India’s aid, if you’ve seen from January to now, of about 3.8 billion or 4 billion dollars helped stabilize the situation?

A: It has helped because we were able to get much needed foreign goods in here but that alone is not enough and for India I think they really stretched it out; Bangladesh also gave 200 million which for them is a big amount. We are thankful to the two countries, especially to India. When I took over I started talking with the IMF and our Central Bank about how much we can find from here. We’ve been able to generate the minimum required amount of foreign exchange but that won’t do.

Q: But you’ve managed to stabilize the situation in the country considerably. The chaos, the anger that was there seems to have subsided. How did you manage to do that?

A: That basically was due to the shortages. First, the whole agriculture economy had collapsed; second was the shortage of foreign exchange, fuel which led to. Actually the first set of demonstrations was really backed by the middle class in and around Colombo.

Q: That’s true. One of the mysteries during this period was that China did not step in with bilateral aid. Why is that because it has been a big friend of Sri Lanka in the past?

A: The mystery is also why we signed the agreement with China when we didn’t have three months’ foreign exchange reserve so that’s something people have not explained. Once we signed that agreement, we got ourselves stuck in this three month foreign exchange rule. My view is that we should not have done that; we should have gone straight to them. There was the outstanding issue of the fertilizer that also played a role (which was rejected here) yes, and the government didn’t agree for a third party to inspect it; if they had agreed, it would have been over. So I think that’s another factor which influenced China’s stand.

Q: You think they will come back to offer you some more bilateral loans?

A: What we want at the moment is agreement among the three creditors as to how they are going to give us debt relief (through IMF?) no, for the bilateral loans; that’s the main issue.

Q: Let me turn to a little more geopolitical issues because you are one of the better known statesmen in this region who understands geopolitics. Just as you took over, the problem of that Chinese ship docking in Hambantota happened and India had its objections. How did you handle that and do you think it could have been handled differently?

A: Firstly, Hambantota is not a military harbour; we have not given it out for military purposes. This ship had been approved earlier, just at the very end of President Gotabaya Rajapaksa’s tenure and it had come in as a research ship. That’s how it had been okayed; we are inquiring into how this happened so fast. We had said no objections and I had taken over. If we were to change that decision, we needed some basis; if that had been forthcoming, we could have studied it and taken a decision but that was not available and we couldn’t get into an argument which we were going to lose. We did delay its coming in here and by that time the ship was virtually in our waters. It was a difficult decision but it was in keeping with a policy that once we give permission, there must be some reason for us to withdraw permission. We could not find the reason; we asked your government also and the ship had virtually come in but they said that they are not going to do anything harmful to India in our waters. Outside that, if they had equipment and they wanted to spy on India, they could have done it. We could only assure that as long as it didn’t take place (in our waters) and we are confident nothing took place like that. Now we are looking at reclassifying civilian ships, non-military ships. The problem is that any non-military ship can be used for military purposes; a cruise line can be used to bring in troops. How do you ensure that it doesn’t get there? That’s what we are looking at now, to work a new system out.

Q: Did you have a very frank dialogue with India at that point in time?

A: Yes, I told them. I don’t think they were happy but they accepted the situation.

Q: Are there any new protocols that you are looking at? You said that you will now reclassify ships but India says that there should be some red line, some assurance.

A: Reclassification we have to work out; it’s not easy. And then any ship that comes in as per the new classification we would hold back and inquire into the matter. What we have told India is that we will not do anything that will jeopardize the security of India; so far we haven’t done that and we have been very, very careful.

Q: I’ve heard you saying this at the National Defense College lecture also that we are not here to jeopardize India’s security. I think you also used a very interesting term: don’t use Hambantota as a punching bag

A: That’s true; we are getting hammered for Hambantota, directly or indirectly, everywhere. (Because China goes to Indian Ocean in many ports) In 2003, I agreed with Prime Minister Vajpayee that they could come and develop Trincomalee because under the letters of exchange in the 1987 agreement, we had to first talk to India about the oil tanks. We wanted to use the oil tanks; I spoke to Prime Minister Vajpayee and he said yes they are interested, we’ll work something out. Then I said why don’t you look at the Trincomalee Port itself? Of course, we went out of power and nothing happened. We are the ones who asked for a power station and President (Mahinda) Rajapaksa had given permission for it to be moved to Sampur from where we had originally selected. So this has been going on and we were developing Trincomalee; it is a question of when and how. (So now what’s the position?) We are looking at how we are going to develop it and we are working on it, then we talk with India. (Also, Kankesanthurai) India was going to help us to develop that; it’s a small port which looked at smaller ships from India but the important one is Hambantota that will service the whole of Bay of Bengal.

Q: That brings me to the geopolitics of Indo-Pacific and Indian Ocean. I think you mentioned that there is Indo-Pacific and there is Indian Ocean and the two oceans are joined by ASEAN countries. How do you see this contest in Indo-Pacific?

A: ASEAN countries said Indo-Pacific is two areas unlike the earlier one which went on Prime Minister Abe’s statement itself. The geopolitics is different. In the Pacific, the hub and spoke system worked. In addition to hub and spoke we must remember that China and the U.S. also worked together for a long time; that is the system that worked there. In the Indian Ocean, there was no hub and spoke system but we had an understanding among ourselves and some of us regarded India as a net security provider so anyway within it we were able to manage without tension. My idea was to develop the freedom of navigation to reduce tension there while in the Pacific the tension is in the ocean, in Japan, Taiwan and up to Vietnam. Actually there’s not much tension that way in the Indian Ocean, your tension is in the Himalayas where three nuclear powers meet and then what is happening in the Horn of Africa where there’s a struggle going on. So it’s completely different from the Pacific; our view is to treat this separately. We are not the same but we have to work together. From time immemorial, China has been coming into the Indian Ocean and ships from Arabia and India have been going to China and the influence of both have spread, that’s why you have Indo-China. So when we call it Indo-Pacific, accept the reality that there are two different systems.

Q: Sri Lanka being at a very strategic location geographically, how do you see yourself in the coming years not just in terms of geopolitical contest but also in terms of connectivity and trade? What is going to be Sri Lanka’s role in your view?

A: Sri Lanka has a big role to play in connectivity and economic base. Also, if you look at it strategically the two channels eight and nine are important for us as much as it’s important for India because all the shipping must go through that but we also have separate access to Trincomalee into the Bay of Bengal. We can be a logistics point. There is no logistics centre in the Indian Ocean; between Dubai and Singapore, there’s a vacuum and that itself is useful. It can service part of the Bay of Bengal and also India.

Q: You’ve also spoken about upgrading the existing FTA, making it a comprehensive economic partnership with India. In that respect, what is the work going on?

A: We’ve restarted it; we are looking at the domestic end here and once we finalize it, we’ll talk to India.

Q: Also I heard you saying ease of doing business needs to be introduced into Sri Lanka. You have a special emphasis on that right now?

A: We have emphasis; we want to have a business ministry, maybe attach it to some other commercial ministry. Today we haven’t got to think of sectors we have in this industry or that come naturally but it has to be ease of doing business which we haven’t had so far.

Q: Redeemable energy and connectivity with India is one of your focus areas. How is that going?

A: We have started now; with Adani, there has been one agreement; there’s another agreement on renewable energy with another Australian company. We are going ahead; it’s not merely renewable energy but I think it’s also green hydrogen; there’s potential on both sides of the Palk Strait; there’s a big potential for wind energy also.

Q: One of the important factors in Sri Lanka’s economy would be tourism and a maximum number of Indians come to Sri Lanka. How are you going to boost it further?

A: We have to do it. I told the tourist board that I am not satisfied. If there are over a billion people (in India), you must ensure at least three, four million people come here.

Q: One of the proposals I heard that you’ve said is that Indian currency will be made acceptable here.

A: Yes, we are doing that

Q: One of the factors in the recent chaos was the high prices of energy and that has happened because of the Russia-Ukraine war. How do you see the war panning out and what is the effect going to be on Asia, not just Europe?

A: One issue was also that we were subsidizing energy and that was one of the big reasons for the crisis that took place. Subsidizing energy meant that the electricity board couldn’t pay its dues to the petroleum corporation that was not servicing the banks. I think energy, as far as we are concerned, will go up again. Sometime from maybe December till about April, prices will be up; that’s basically the impact of the Ukraine war.

Q: How do you see the war panning out? Is it sort of creating a new world disorder if not a world order?

A: Militarily it’s a fight going on in Ukraine. At one time, it favoured Russia; now it has favoured Ukraine. Again, will it favour Russia? I don’t know but more than that it has created disorder in the oil markets and the food markets. That is a problem. I personally think that both sides and the West should get down and come to some agreement because the rest of us are feeling the pressure.

Q: Do you think India can play some role there in trying to resolve that issue?

A: I think India can play a role.

Q: What about taking the India-Sri Lanka partnership to the next level? What would you propose? There was a very close bonding in the past seven, eight months; the help India gave hopefully without strings. How are you going to assure India that you will continue to be with India and look at your own interests as well as India’s interests?

A: We’ve been working and we have to discuss some of the issues because sometimes India will work within the Quad, we work outside the Quad; that’s one issue. I mean it has to be at different levels from what I can see. The Indian Ocean is developing separately and how we interact with each other, not only with India. Second is the presence of China and the Belt and Road Initiative. We consider the Belt and Road initiative as commercial; if it had any defence or military implications, we won’t be there. Of course, with that China is expanding its presence in the Indian Ocean. For India it’s a question of how fast you are growing; that’s an internal issue. India didn’t go to RCEP for its own reasons but I think it will gradually come in there. China is there today with Japan. Over there, our interest has been commercial and economic with China. We can’t go to war with anyone; we want freedom or navigation here. We’ve got to work the relationship out just as much as India is working its relationship out with the U.S. while having relations with Russia. All of us have the same problem.

Q: One of the thorny issues in India-Sri Lanka relations is the fishermen’s issue. There have been proposals about joint fishing zones or look at some new Innovative methods. Would you encourage that from your side?

A: I don’t think the northern fishermen will accept it; they want their fishing zone to be theirs. When I was prime minister they agreed that in two or three years, Indian fishermen will be persuaded to go for deep sea trawling. That has not taken place yet. It’s not a question of the Sri Lankan Coast Guard, some of these people will decide to take matters into their own hands. I remember in 2002 or 2003, LTTE caught them and shot some of them. We don’t want that to happen but if Sri Lankan fishermen feel that Indian fishermen are coming further and further into the area, there’s going to be a natural pushback. We have to come to some agreement on that.

Q: Talking about northern areas, what is your vision for development of the northern areas?

A: We are getting a plan together, especially the development of Trincomalee and renewable energy that has a lot of scope for the northern economy. (So on the west you’ll have the renewable energy projects perhaps and in the east the port project for the north?) It also depends on how Tamil Nadu develops because all your industrialization is in the north of Tamil Nadu. Are you going to push down to the south of Tamil Nadu? If you want to overtake Maharashtra, you have to come down. We can become the ports for southern Tamil Nadu. What you need initially is a good ferry service. It’s a win-win situation if Tamil Nadu pushes down; they can get the ports and our benefit is the logistics of it.

Q: India insists on the 13th amendment being implemented and then there is the second issue here internally for you, the president’s powers to be diluted or whittled down, where is that in parliament first if you can tell me about the president’s powers being diluted is separate from the third thing completely separate I’m saying two issues but

A: About the 13th amendment, we have been talking with Tamil parties; I think we can come to some arrangement. On the President’s powers, for me the most important is the electoral system because all the corruption comes out of that. Unless you tackle the election system first, you will not have a good government because you have this preference system in which you are fighting your own candidates, cost of election is about four times, so you are dependent on others to help. We need the PR system; the question is whether we want to have a list system without a preference or whether we have the dual system. I think we have to sort that out, the quality of candidates. People are selected to Parliament now, this is the core issue. We are ducking that because all the parties are coalitions; the smaller parties want one system and the larger parties want another. But the country doesn’t want, that’s the main issue. Once you address that, a new Parliament selected accordingly can decide on the presidential system also.

Q: And about the presidential system, you are talking about the Indian insistence on northern areas development; that assistance has helped?

A: Northern areas development is something new which I have taken on after I became president; that will go ahead which will need India’s help and others’ help also.

Q: And what are the Tamil parties’ views on the current situation; are they helping you, cooperating with you?

A: Some of the members cooperate, others don’t (so are you faced with some kind of resistance in Parliament because it’s quite chaotic like in any other democratic country). If Parliament doesn’t want to pass it and it is something that the people want, I’ll tell the people—look they are not doing it.

Q: You acted very tough on the protesters. After the protests subsided a little bit, you said action must be taken on those who have taken law in their hands. Has that been a bit of a concern for civil society here or have they accepted it?

A: For the country they have accepted. I came in because a large number of people wanted law and order maintained. When you try to take over Parliament, what are we going to do? Are you going to wait if they try to take over Lok Sabha? We also wouldn’t wait; the country wanted it. There were some activists from the civil society who joined these violent groups; they thought the government was going to fall and then they were trying to see what role they had. Some religious dignitaries, some political parties tried to take a free ride right; the whole thing collapsed. I was asked to send my letter of resignation; otherwise, they’d burn down the house. They burnt down the house and then they wanted to take over parliament. Can any of this be justified?

Q: What about inquiries into some of those incidents?

A: They are inquiring.

Q: And you will act accordingly?

A: Yes.

Q: I’ve always found you interested in geopolitics. How do you see the world in the next five years?

A: There’ a big question mark over the next five years but I don’t think the big challenges are going to come in the next five years unless we force it upon ourselves, like what happened in Ukraine. Another big challenge is Her Majesty Queen Elizabeth who held the Commonwealth together. Can Britain and the others hold it together or will it disappear? Then it will create another vacuum; at least a value system was being transferred by the Commonwealth, so it’s in a very uncertain situation. China’s military won’t be in a position to take on the U.S or be a threat for at least another 15 years. So are you trying to accelerate it and we do cause conflict because of that? What happened in Ukraine? Miscalculations on both sides and then no one can get out of it, neither the West nor Russia; it’s become a trap. There are so many points that are coming like that which are dangerous. New politicians now appeal to different segments of the electorate. The disappearance of traditional parties, replacement with new parties on different interests (Does the region need a BIMSTEC; can BIMSTEC work as a counterbalance?) BIMSTEC has been slow.(You would like it to get accelerated?) I can’t see that happening. We have to have the administrative infrastructure and the economic infrastructure which we haven’t got for trade integration. We are looking at working together with RCEP also, so if we have agreements with India and Bangladesh, then from India up to Japan we are covered. What is going to happen in the Indian Ocean is a big question.

Q: Does the security of the Indian Ocean worry you?

A: There are no tensions; we can manage it because I can’t see a major issue coming up, even the number of warships, Chinese and otherwise, is minimal. It’s the future threats that are worrying everyone.

Q: Any message to India or the Indian people who are looking at Sri Lanka with a lot of concern?

A: Two words: Thank you.

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