View from Sri Lanka | Walking the Tight Rope

Dhanuka Dickwella

Reeling from a painful economic meltdown, with an inexperienced Marxist government in power, the last thing Sri Lanka wanted was to be a part of US President Donald Trump’s tariff war. Unfortunately, Sri Lanka was not just hit hard, but also ended up being one of the five countries with the highest tariffs imposed. The US, the biggest trading partner, has already made Sri Lanka’s situation perilous, with a looming crisis on the horizon. History has proven always that financial crises in small countries make them ever more vulnerable to external influence. It was against this backdrop that Indian Prime Minister Narendra Modi’s Sri Lankan visit took place.

The last financial crisis was so bad that a president elected with much pomp had to flee despite his clean mandate and two-thirds of parliamentary power. Back then, India became the lifeline of the island’s citizens. This time around, too, it may be the same because among many remedies for Trump tariffs, most prominent economists have suggested coupling of Sri Lanka’s economy with its larger, powerful global leader in the making, namely the rising South Asian economic engine, India.

Compared to many South Asian nations that are partners of the terminally ill, South Asian association for Regional Co-operation (SAARC), Sri Lanka, enjoys the status of the most connected economy through transportation with India. Although there is much more room for energy, trading, and other cooperations, Sri Lanka has played it safe for two reasons. One, its historical suspicions of India’s long-term motives, and second, the access and connectivity to the Chinese economy. Sri Lanka does not see it as a strategic trade-off. But times have changed, and the grounds underneath are shifting at a breakneck speed.

It is important to understand the context of what makes Modi’s visit as the first foreign leader under the new government so special. In these tense times where the global balance of power is shifting, to find oneself located in one of the hotly contested, geopolitically important oceans is a challenge itself. Especially when the country is a significant part of the economic cogwheel of great power. Sri Lanka’s close alignment with China thus makes it a direct target of not just the concerned India but also the powerful US. While geopolitical competitions are nothing new, when coupled with an