Table of Contents
The Cautionary Warning
Donald Lu, the US Assistant Secretary of State for South and Central Asia, has praised Sri Lanka for being a successful example of the administration’s Indo-Pacific strategy, which was developed in partnership with countries such as India. However, he has also warned both Delhi and Dhaka that the security situation resulting from the Rohingya refugee crisis and the overall instability in Myanmar will continue to worsen and have implications for neighboring countries.
At a recent panel discussion at the US Institute of Peace, Lu, a State Department official, discussed China’s potential partnership with Maldives and the need for competition from other countries. He also acknowledged India’s leadership in the Indian Ocean and upcoming discussions between India and the US on joint efforts in littoral states in Africa, marking two years of the Biden administration’s Indo-Pacific strategy.
Sri Lanka’s dramatic recovery
A year-and-a-half ago, Sri Lanka was in crisis with “mass riots on the streets, lines for petrol and food… the seizing of the President’s home, protesters swimming in his swimming pool”. But, Lu added, “If you have been to Sri Lanka lately, it is a very different place. Currency is stable. Goods and fuel prices are stable. They have gotten reassurances on their debt restructuring. And IMF money is flowing.”
The top official on the South Asia desk at the State Department recently explained how Sri Lanka was able to turn around its economic crisis. He mentioned that this was due to the support of the US and other like-minded partners. The Indo-Pacific strategy is based on the idea that countries can work together to provide a better alternative to Chinese influence in the region. In Sri Lanka’s case, this meant that they needed humanitarian assistance during the crisis. India offered concessional loans, which allowed Sri Lanka to bring in essential supplies. Additionally, the USAID provided hundreds of millions of dollars in agricultural inputs, fertilizers, and seeds to help farmers grow their crops.
On the debt side, Lu said the creditor community led by Japan, France and India, negotiated for months to find a formula to allow Sri Lanka to restructure its debt in a sustainable manner. “That formula put pressure on the Chinese to go along with those debt reassurances. That opened up IMF funding and changes in the economy you witness today.”
Lu also referred to the US Development Finance Corporation loans worth $553 million to develop a deep water shipping container terminal in the Port of Colombo, a project which has the Adani group as a key partner, as evidence of a loan that doesn’t balloon debt but a private sector investment for a profitable project.
The official also highlighted the importance of supporting Sri Lanka’s sovereignty. He hinted at the Chinese threats in the region and said that the US government is providing patrol boats to the Sri Lankan military to help with security. He also mentioned the Indo-Pacific maritime domain awareness initiative, which provides free, near real-time, commercial satellite data to countries in the region, including South Asia. The initiative is intended to help countries defend themselves against piracy, drug trafficking, and illegal fishing. The Indians have created the Indo Pacific Information Sharing Centre to facilitate the initiative, which is expected to be transformative.
The Myanmar Challenge
Lu briefly touched upon the friction in the region, mentioning the ongoing India-China border conflict and the long-standing conflict between India and Pakistan. However, he emphasized the implications of the situation in Myanmar on the South Asian region, stating that he spends a lot of time analyzing the effects of instability in Burma on Bangladesh and the Rohingya refugees living there.
Lu praised Bangladesh for its tremendous generosity in hosting over a million refugees and said that the international community must work together to find solutions to house these refugees until it is safe for them to go back. He had personally visited the Cox Bazaar, the largest refugee camp in the world, to witness the situation firsthand.
Lu expressed concern that the situation in Burma was not improving and that the refugee crisis was creating security problems for Bangladesh and potentially for India. He stressed the need to monitor the situation closely and support our partners in the region, particularly Bangladesh and India, to cope with these stresses without it leading to instability within their countries.
On India’s Projection of power in the Indian Ocean
In acknowledging the US’s internal governmental challenge regarding the Indian Ocean region, Lu highlights the difficulties that arise from its division into different agencies and departments.
Lu believes that India is a much bigger force in the region than the US, and for the US to succeed, it must work alongside India. This means ensuring that their actions align with the direction India is moving in, particularly regarding the Indian Ocean.
To achieve this, the US and India are currently in talks, including ones launching this month in Africa. The goal of these talks is to explore how the US and India can work together, particularly in the littoral states of Africa that border the Indian Ocean.
By collaborating with India, the US can become a major player in the region and achieve its goals in the Indian Ocean.
