China’s “String of Pearls” and India's Two Front War Predicament : Analysis

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Maldives: Countering Chinese Challenges in Indian Ocean
 

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India on board with US-Maldives alliance to counter China
COLOMBO -- A defense agreement the U.S. government signed with the Maldives this month is a sign of shifting geopolitical tides in a strategic stretch of the Indian Ocean once dominated by India, South Asia's main power.

Unlike a similar initiative seven years ago, the new framework for cooperation between the U.S. and Maldivian departments of defense went through without objection from India, a leading player in the latest version of the South Asian Great Game in which China, Japan and the U.S. are contesting for influence.

In 2013, New Delhi succeeded in sinking U.S. plans for a status of forces agreement with the Maldives, an archipelago in the Indian Ocean best known for high-end tourist resorts. The agreement was meant to provide a framework for existing U.S.-Maldives defense activities and not to create a "new military presence," Washington said at the time.

The government of President Ibrahim Mohamed Solih has struck a new note from one of its recent predecessors under President Mohamed Waheed. After signing the agreement, the Maldivian defense ministry tweeted: "[It] will add immense value to the excellent #US-#Maldives partnership defined by shared principles and interests in peace and security of #IndoPacific and #IOR amid rising threats like piracy and terrorism."

The message was a nod by the Maldives, South Asia's smallest nation, to the broader context of the agreement. "IndoPacific" referenced the U.S. Free and Open Indo-Pacific strategy President Donald Trump has rolled out for the U.S. in the Pacific and vast stretches of the Indian Ocean. And "IOR", the Indian Ocean Region, is where India has major strategic concerns.

India is also part of Quad, an alliance that includes Australia, Japan and the U.S. They have held security dialogues and military exercises spanning the Pacific and Indian Ocean.

Australian and U.S. naval ships conduct a resupply exercise in the strategically vital Indian Ocean. © Getty Images
According to Alaina Teplitz, the U.S. ambassador to the Maldives and Sri Lanka, the agreement paves the way for the Maldives to join other nations with "a shared responsibility to uphold the rules and values ensuring a free and open Indo-Pacific."

The Maldives National Defense Force (MNDF) will be a direct beneficiary of Washington's push. It has only 20,000 troops, making it one of the region's smallest armies.

"This agreement advances high level dialogues, builds partner capacity, and increases interoperability with our partners in the Maldives National Defense Force," Teplitz, who is based in Colombo, the Sri Lankan capital, told the Nikkei Asian Review.

"MNDF representatives joined more than 20 other partner militaries to enhance humanitarian assistance and disaster relief capabilities during the 2019 Pacific Amphibious Leaders Symposium," she added. "They've trained with U.S. Marines on defense tactics, and conducted emergency medical exercises with the U.S. Air Force."

South Asia analysts reckon that India's change of tack, which made possible the U.S. defense engagement in the Maldives, marks a turn in deepening India-U.S. bilateral ties and New Delhi's "perceptions of an American role" in the Indian Ocean region.

President Ibrahim Mohamed Solih of the Maldives was welcomed by India's Prime Minister Narendra Modi to New Delhi in December 2018. © Reuters
"Deep strategic ties between India and the U.S. are reflected in India's centrality in the Indo-Pacific strategy," said Aparna Pande, director for the Initiative on the Future of India and South Asia at the Hudson Institute, a Washington-based think tank.

The closer military ties and expanding U.S. support for India's strategic interest against Pakistan, its regional nemesis, has "helped assuage Delhi," she told Nikkei. "Now Delhi views Washington's presence in Sri Lanka, the Maldives, Bangladesh or Nepal as aligned with India's strategic interests -- [and] no longer the Cold War era when the U.S. was viewed as an offshore balancer and pro-Pakistan."

China's expanding shadow in a stretch of the Indian Ocean that India regards as its backyard has precipitated this maritime fault line. President Abdulla Yameen tilted the Maldives towards China during his five years in power that ended in 2018. Beijing pumped in millions of dollars to fund an infrastructure spree during Yameen's time in office, leaving the country's $5 billion economy with at least $1.4 billion in debts, according to official estimates. Allies of Solih estimate the Chinese debt to be closer to $3.5 billion, which the Chinese government disputes.

Abdulla Yameen, left, president of the Maldives for five years until 2018, took the smallest nation in South Asia much more into China's orbit. © Reuters
Yameen's years were also marked by an authoritarian turn mirrored not far off in Sri Lanka, which also took on multi-billion dollar Chinese-funded infrastructure projects as part of Beijing's flagship Belt and Road Initiative that also eroded India's influence over the strategic South Asian island.

"China does provide a different context to security in the Indian Ocean," Nilanthi Samaranyake, director of strategy and policy analysis at the Center for Naval Analysis, a Washington-based think tank, told Nikkei. "The fact that India is now supportive of [the U.S.-Maldives security agreement] is a distinct change due to its increased threat perceptions of China."

She expects the security framework to pave the way for a more comprehensive bilateral defense and security dialogue between the U.S. and the Maldives: "The U.S. generally seeks to advance defense cooperation with non-allied partners and build incrementally."

Washington's foray in the Maldives has not gone unnoticed in China.

"Great powers should no longer engage in setting their spheres of influence," Long Xingchuan, a senior research fellow with the Academy of Regional and Global Governance at the Beijing Foreign Studies University, wrote in a commentary in Global Times, an English-language mouthpiece for the ruling Chinese Communist Party. "In the 21st century, countries should adhere to free, equal and mutually beneficial cooperation."
 

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Maldives and Japan signs Exchange of Notes on the assistance to be extended to Maldives Coast Guard​

The Maldives and Japan today signed the Exchange of Notes under the Economic and Social Development Programme of the Government of Japan, for a grant aid of 800 million Japanese Yen (USD 7.6m) to be extended to the Maldives Coast Guard and the Maritime Rescue and Coordination Center.


At the ceremony held today at the Ministry of Foreign Affairs, the Exchange of Notes were signed on behalf of the Government of Maldives by His Excellency Abdulla Shahid, Minister of Foreign Affairs, while Her Excellency Keiko Yanai, Ambassador of Japan to the Maldives signed on behalf of the Government of Japan.


The grant aid will be utilized to further strengthen the capabilities of the Maldives Coast Guard, the Maritime Rescue and Coordination Center, Sub-Regional Centers and Vessels. This includes the provision of communications equipment, professioanl search and rescue dive equipment to be used by the Maldives Coast Guard during search and rescue operations.


While speaking at the ceremony today, Minister Shahid highlighted the close relations the Maldives enjoys with Japan, and the need for coordinated action in collaborating more closely on combating piracy, countering violent extremism and narco-trafficking, and to ensure a free and open Indian Ocean that would bring about peace and prosperity to the region. Minister Shahid also thanked Ambassador Yanai for her committment to further enhance the close relations between Maldives and Japan, and expressed his gratitude to the Government of Japan for yet another important gesture of goodwill and generosity to the Maldives.


Senior officials from the Ministry of Foreign Affairs, the Maldives National Defence Force, Japan International Cooperation Agency (JICA) and the Embassy of Japan attended the signing ceremony today.


The signing of the Exchange of Notes symbolises the close ties and coordination between the two countries on rescue services and crisis management. In October last year, Japan donated 21 paremedic ambulances to the Maldives health sector in value of USD 1.4 million, which were distributed to 21 islands in 15 atolls.
 
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Govt. to sign swap deal with China for US$ 1.5 billion; India deal unlikely​

Sri Lanka will next week sign an agreement with China’s Central Bank — the People’s Bank of China — for a swap arrangement amounting to US$ 1.5 billion.

The move came as the Government is looking at measures to bridge the gap of another US$ 1 billion. The Sri Lankan Central bank was expecting this from India, but it is now unlikely, a senior Central Bank official said.

Under the swap arrangement with China, the funds are expected to be made use of to maintain the foreign reserves and for imports from China, the official said.

The money is to be paid back within three and half years.

A currency swap is a transaction in which two parties exchange an equivalent amount of money with each other but in different currencies. The parties are essentially loaning each other money and will repay the amounts at a specified date and exchange rate.

Sri Lanka’s request to the Reserve Bank of India for a currency swap of US$ 1 billion has so far drawn no response and the facility was unlikely to be received now, the official said.

He said that in view of the shortfall, the Central Bank was taking other measures including negotiating similar swap arrangements with other countries while continuing with other measures such as reducing imports.

Vehicle import restrictions were among the measures and will be continued until further notice, he added.

The Chinese swap arrangement would be useful to maintain a balance throughout the year, he said.

Meanwhile, Sri Lanka plans to review eight trade agreements including two which have been stalled midway.

The controversial Indo-Sri Lanka Economic and Technology Cooperative Agreement (ETCA) and the China-Sri Lanka Free Trade Agreement which were stalled would be reviewed with the objective of renegotiating them, Trade Minister Bandula Guanwardena said.

The China FTA talks were halted in 2017 after six rounds of discussions while the ETCA was suspended in 2018 after 12 rounds of discussions.

Another trade agreement with Thailand would also be reviewed.

The India-Sri Lanka FTA effective from 2000 and the Pakista- Sri Lanka FTA effective from 2005 are among other agreements to be reviewed.

Mr Gunawardena said the objective of reviewing the agreements was to ensure that Sri Lanka benefited from the agreements currently in place as well the proposed agreements.

“If there are clauses which are not beneficial to the country, we need to revise them,” he said .

The minister said a Commerce Department team along with an expert committee would review the agreements.
 
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Sri Lanka opposition, civil society mount legal challenge to Chinese-backed Port City Bill​

Filing about a dozen petitions at Sri Lanka’s Supreme Court on Thursday, opposition parties, civil society groups, and labour unions challenged a recently-gazetted Bill on the Chinese-backed Port City in capital Colombo, arguing it “directly affects” Sri Lanka’s sovereignty. The cases are scheduled to be heard by the top court on Monday.

The ruling Rajapaksa administration tabled a Bill, titled Colombo Port City Economic Commission’, in Parliament last week, outlining proposed laws for the $1.4 billion-Port City being built on reclaimed land at Colombo’s seafront.

Constitutional validity​

However, Sri Lanka’s Opposition parties Samagi Jana Balawegaya (SJB or United People’s Front), Janatha Vimukthi Peramuna (JVP), the United National Party (UNP), Colombo-based NGO Centre for Policy Alternatives, and labour organisations have challenged the constitutional validity of the proposed legislation for the Port City, touted by the government as an investment hub for foreign capital.

SJB legislator Harsha de Silva said while the party wants the Port City project to succeed, for its potential to “catalyse” the next stage of fintech and high-end knowledge services-driven growth in the country, “a solid legal framework” was key. “For this long-term project to succeed it must be consistent with the Constitution of Sri Lanka. It must not be discriminatory…we see multiple clauses that are inconsistent with the Constitution,” he told The Hindu.

Senior lawyer and SJB Legal Secretary Thisath Wijayagunawardane said the Bill seeks to set up a Commission whose powers — in regard to registrations, licensing and authorisation — “interfered” with the provincial authority, and allowed for a team of foreigners, “accountable to none other than the President”, to effectively run the Port City.

“The clauses prohibit investment in the Port City in Sri Lankan rupees, which will keep out Sri Lankans…it will be like a forbidden city within Colombo,” he said, adding: “The government claims it stands for ‘one country, one law’, but the Bill allows for running the Port City like a foreign country with special laws.”

Terming the project as one of “national importance”, the UNP said the Bill was “inconsistent with Parliament’s control over public finances, allows for the abuse of power and fails to ensure a transparent system of checks and balances”.

Eyeing investments​

The Port City was launched by President Xi Jinping during his state visit to the island nation in September 2014, during former President Mahinda Rajapaksa’s second term in office, months before his poll defeat. The successor government, led by President Maithripala Sirisena and PM Ranil Wickremesinghe, vowed to develop the site into an “Indian Ocean financial hub”, despite an election promise to scrap it, and amid protests from environmentalists and fisherfolk.

Following their return to power, the Rajapaksa administration promised to expedite the project, that it says would attract $ 15 billion in investments, and emerge a “leading business, retail, residential and tourist destination in South Asia”.

Sharp criticism​

However, in addition to the legal challenge, the government also faces sharp criticism from some of its backers, including sections of Sri Lanka’s influential Buddhist clergy. “We will not allow Sri Lanka to become a Chinese Colony,” Chief Incumbent of the Abhayarama Temple in Colombo, Ananda Muruththettuwe Thero, said on Thursday. “It is clear the country is heading on the wrong path,” he said.

Months ago, Buddhist monks, among others, fiercely opposed Indian involvement at the East Container Terminal at the Colombo Port, forcing President Gotabaya Rajapaksa to go back on his announcement that the Adani Group would invest in the project, along with the Sri Lanka Ports Authority. Subsequently, Colombo offered the West Container Terminal to the Group.

Meanwhile the Ceylon Federation of Labour voiced concerns over the Bill exempting employers operating within the Port City from compliance with Sri Lanka’s labour laws. The Union had fought and won a case in the late 1970s when the J.R. Jayawardene government tried to deny labour law protection to workers at the newly established Free Trade Zone.

The country’s hard-won labour protective legislation had come under threat again, Federation General Secretary T.M.R. Raseedin said in a statement, cautioning that: “Should this Bill be enacted, we will be going back to an era when ‘hire and fire’ ruled employer-employee relationships.”