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By P.K.Balachandran
Colombo, February 19 (Counterpoint): Donald Lu, US Assistant Secretary of State for South and Central Asia, has advised South Asian countries to follow India’s leadership in Indian Ocean affairs and has proffered the view that these nations will get a better deal from China if there is a competition from other countries such as India and the US.
Lu said that the US is a “big force” in the Indian Ocean region but India is a “much bigger force” there, according to a Washington datelined report in Hindustan Times.
The US official was speaking at a high-powered panel along with other officials from the State Department, National Security Council and Pentagon to mark two years of the Joe Biden administration’s Indo-Pacific strategy at the US Institute of Peace in Washington DC.
“You have to work with Indians and make sure what we are doing is consistent with the direction they are moving in with respect to the Indian Ocean. They are historically the big player,” Lu said.
Sri Lanka Hailed
He held out Sri Lanka as an example of the success of the US administration’s Indo-Pacific strategy in collaboration with partners like India.
“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”, Lu recalled. “But 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. This turnaround happened with a little help from friends,” Lu said.
The Indo-Pacific strategy is based on the premise that US and like-minded partners would try to offer a better proposition to the developing nations in the region, the official said.
In the case of Sri Lanka, this meant that at the beginning of the crisis, what the island state needed was humanitarian assistance.
“What we saw was countries like India coming up with concessional loans that allowed Sri Lanka to bring in vital supplies during the most difficult time. USAID, during the same days, provided hundreds of millions of dollars in agricultural inputs, fertilizers and seeds, so farmers could grow their own 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 amounting to US$ 553 million to develop a deep water shipping container terminal in the Port of Colombo, a project which has India’s Adani group as a key partner. This is a loan that doesn’t balloon debt but a private sector investment for a profitable project.
In a hint at Chinese threats in the region, Lu said that a part of what Sri Lanka “really needs” is “for all of us to be there to support its sovereignty”.
In the context of security, Lu referred to the Indo-Pacific maritime domain awareness initiative.
“This is a complicated way of saying we are going to provide free, near real-time, commercial satellite data in countries around the region, including in South Asia, through the Indo Pacific Information Sharing Centre that the Indians have created. This is going to be transformative and will help countries defend themselves against piracy, drug trafficking and illegal fishing,” he said.
Maldives’ Lurch Towards China
Referring to the Maldives’ lurch towards China, abandoning earlier ally India, the US official said that the Maldives should realise that China offers better deals if it knows there is “real competition.”
“Maldives is a place where China, US, India, lots of countries are competing for influence. The way we will prevail is by offering a better proposition. My view is that China will be a good partner when there is genuine, actual competition. If there isn’t competition, what we have seen over and over again is China offering unsustainable debt for unsustainable projects”.
Pointing out that Maldives faces serious challenges including debt, if Maldives doesn’t get debt restructuring, he said that it will owe more than US$ 1.3 billion in debt payments, more than the government’s budget.
What Maldives needs according to him is “sustainable, profitable, private sector led investment.”
Commenting on the security challenges in the Maldives, Lu said: “Maldives is a chain of 1200 islands, encompassing territorial waters of 53,000 sq. kms, roughly the size of France. You think of Maldives as tiny. But it is actually enormous in terms of defence. How do you protect the sovereignty of a gigantic part of the Indian Ocean? This can happen through technology, training, and real time commercial satellite data.”
The US, he said, recently committed four patrol boats and is in discussion about aircraft. “They are going to need that and more”.
Lu also pointed to the climate challenges in the Maldives and said it is for the US and other friendly nations to provide technology and financing to ensure it is not submerged.
Bangladesh and Myanmar
On Bangladesh and Myanmar, he said that the Rohingya refugees from Myanmar, who are in Bangladesh, will affect the security of Bangladesh and India too.
The US he added works significantly with Bangladesh to support the generosity Dhaka has shown towards over a million people who have been living in the country for years.
“I had a chance to visit the Cox Bazaar, the biggest refugee camp in the world, to see the tremendous generosity but also the willingness of the international community to work together to find solutions to house these refugees until it is safe enough to go back,” Lu said.
The situation in Myanmar is not getting better and what worried the US official was that the refugee crisis and the security problems it was creating for Bangladesh and “potentially for India”. This could get deeper in the coming days, he feared.
“It is something we have to watch out for and enable our partners in the region, in this case Bangladesh and India, to cope with those stresses,” Lu said.
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