Sri Lanka crisis: India, China extend olive branches to the island nation; citizens feel brunt of fuel shortage

Under its ‘Neighbourhood First’ policy, India has extended support to the island nation by giving short-term and long-term loans.
Dejected protesters sit on a street corner after they were evicted by the military from the presidential offices they had occupied for days, in Colombo. (Photo | AP)
Dejected protesters sit on a street corner after they were evicted by the military from the presidential offices they had occupied for days, in Colombo. (Photo | AP)

NEW DELHI: India has extended 8 Lines of Credit (LoCs) to Sri Lanka amounting to US$1850.64 million over the past 10 years in sectors like railways, infrastructure, defence, renewable energy, petroleum and fertilisers, External Affairs Minister S Jaishankar said in a written reply to a question by DMK MP S Ramalingam in the Lok Sabha.

Under its ‘Neighbourhood First’ policy, India has extended support to the island nation by giving short-term and long-term loans. “In January 2022, India extended a $400 million currency swap to Sri Lanka under the SAARC Framework and deferred successive Asian Clearing Union settlements till July 6. A Line of Credit of $500 million was extended for importing fuel from India,” Jaishankar added.
Besides, a credit facility of $1 billion for the procurement of food, medicines and other essential items from India has also been extended.

India has also extended humanitarian assistance in the form of essential medicines worth `6 crore, 15,000 litres of kerosene oil and $55 million worth LoC for procurement of urea. “In addition, the Government of Tamil Nadu has contributed rice, milk powder and medicines worth $16 million, as part of the larger Indian assistance effort,” the minister said.

The issue of Sri Lanka arresting Indian fisherman was also raised in Parliament. Minister of State for External Affairs, V Muraleedharan said 144 Indian fishermen were arrested this year so far allegedly crossing the Maritime Boundary Line and fishing in Sri Lankan waters.

The Indian government secured the release of 138 fishermen of whom 115 have been repatriated and 23 are to be repatraiated soon. At present, there are 6 Indian fishermen in Sri Lankan custody and efforts are on for their early release, Muraleedharan added.

Chinese President Xi Jinping on Friday congratulated Ranil Wickremesinghe on his election as Sri Lankan President and offered to provide support as “his capacity allows” to Colombo, amid Beijing's concerns over billions of dollars of Chinese investments and defaulted loans in the economically bankrupt island nation.

In his message to Wickremesinghe, President Xi said “he attaches great importance to the development of China-Sri Lanka relations and would like to provide support and assistance as his capacity allows to Wickremesinghe and the Sri Lankan people,” state-run Xinhua news agency quoted him as saying.

Terming the two countries as “each other's traditional friendly neighbours” since the establishment of diplomatic ties 65 years ago, he said both countries had set an example of friendly interactions and mutually beneficial cooperation between large and small countries.

Xi said he believes under the leadership of President Wickremesinghe, Sri Lanka will overcome temporary difficulties and push forward the process of economic and social recovery.

The Chinese president said that he hopes the two sides will carry forward their traditional friendship, consolidate political mutual trust and continuously push forward the strategic cooperative partnership featuring sincere mutual assistance and enduring friendship.

Ever since Sri Lanka's economic crisis erupted with the country running out of its foreign exchange reserves causing a huge fuel and food crisis, China's assistance to the country was in focus considering it is the biggest investor with over USD 10 billion investments in the island nation.

Beijing's unproductive projects including the Hambantota port, which Beijing took over on a 99-year lease as a debt swap came under sharp criticism.

While India stepped in with nearly USD 4 billion assistance with a steady line of credits to provide fuel and gas to Sri Lanka, China provided USD 73 million assistance, besides large shipments of rice.

China had maintained silence to repeated pleas from former Prime Minister Mahinda Rajapaksa who opened up Sri Lanka to massive Chinese investments and his brother and former President Gotabaya Rajapaksa, who later fled the country, urging Beijing to roll over the loans and provide bridge finance.

On Wednesday, Chinese Foreign Ministry spokesman, Wang Wenbin sought to dismiss CIA's chief William Burns observations blaming Colombo's “dumb bets” on China's investments as “groundless accusations”.

“The Chinese have a lot of weight to throw around and they can make a very appealing case for their investments," Burns said.

He was quoted in the media as saying that nations should look at “a place like Sri Lanka today -- heavily indebted to China -- which has made some really dumb bets about their economic future and are suffering pretty catastrophic, both economic and political, consequences as a result.

” "That, I think, ought to be an object lesson to a lot of other players -- not just in the Middle East or South Asia, but around the world -- about having your eyes wide open about those kinds of dealings," he said.

The US official's groundless accusation against China cannot hide the truth from people in Sri Lanka and elsewhere in the world, nor can it hold back the deepening of China-Sri Lanka friendly cooperation, Wang said.

As Sri Lanka announced default on over USD 51 billion foreign loans including that of China's, after initial reluctance Beijing has agreed to back an IMF package to bailout Sri Lanka, similar to the international lender's assistance to Pakistan which is also on the brink of an economic crisis.

Chinese analysts say that the fall of Rajapaksas could be a blow to China's close ties with Colombo besides its extensive investments stretching to over USD 10 billion in Sri Lanka.

Observers opine that Beijing, whose expansive Belt and Road Initiative projects, costing billions of dollars in Asia and Africa is increasingly getting cautious with forecasts that economies of several developing countries may face similar collapse as that of Sri Lanka.

The US on Friday denounced Sri Lankan security forces' overnight crackdown on anti-government protestors as its envoy met newly-elected President Ranil Wickremesinghe and expressed grave concern over the “unnecessary and deeply troubling" escalation of violence.

Sri Lankan security forces raided the main anti-government protest camp at the President's Secretariat, arresting nine people and injuring several others, as the protesters continued to occupy the sensitive area despite the resignation of Gotabaya Rajapaksa as president.

The decision to evict the anti-government protesters came a day after Wickremesinghe was sworn in as president after ex-president Rajapaksa fled the country last week.

Unbowed, the protesters vowed to continue their efforts to change their leadership.

US Ambassador Julie Chung, who met Wickremesinghe to express grave concern over the “unnecessary and deeply troubling escalation of violence against protesters overnight”, said that the President and the Cabinet have an "opportunity and an obligation" to respond to the calls of Sri Lankans for a better future, a statement said.

“This is not the time to crack down on citizens but instead to look ahead at the immediate and tangible steps the government can take to regain the trust of the people, restore stability and rebuild the economy," she said.

In a mid night operation, the security forces removed the protesters from the presidential secretariat and cleared the gate they had occupied since April 9.

Sri Lanka's bar association said two lawyers were also assaulted during the raid.

It said nine protesters, including a lawyer, arrested by the police during the crackdown at the presidential secretariat have been granted bail by the Colombo Fort magistrate this evening.

A large number of lawyers were present at the court.

The protesters had vacated the President and Prime Minister's residences and the Prime Minister's office earlier after capturing them on July 9, but they were still occupying some rooms of the President's secretariat at the Galle Face.

The protesters returned to Colombo on Wednesday after Parliament voted in six-time Prime Minister Wickremesinghe as the country's new president.

They refused to accept Wickremesinghe, 73, as the new president, holding him partly responsible for the country's unprecedented economic and political crisis.

The protesters, who had been camping at the Secretariat's gate since April 9 when they started their anti-government protest which resulted in Rajapaksa's resignation as president last week, posted on social media on Thursday that they were planning to end their protest by 2 pm on Friday.

“There was a debate that we should respect the Constitution and stop this protest," said a spokesman of the group.

However, the main protest group which blocked entry to the President's Office since April 9, said they would continue their struggle till Wickremesinghe resigned.

Two men died in cash-strapped Sri Lanka on Friday while waiting in serpentine queues to purchase fuel as widespread shortages and soaring inflation levels continue to heap misery on citizens.

The two deaths were reported on a day when newly-elected President Ranil Wickremesinghe on Friday appointed Dinesh Gunawardena as the Prime Minister in a bid to restore political stability and mitigate the worst economic crisis that has virtually bankrupted the island nation.

The 59-year-old man had left his motorcycle for over two nights near a filling station in Kinniya, a town located in Sri Lanka's Eastern Province, collapsed on Friday, according to news portal Lanka First.

The victim's body was shifted to the Kinniya Base Hospital for post-mortem examination, it said.

A 70-year-old man also died after collapsing while waiting in line for fuel at a filling station in Mathugama, in the country's Western Province.

Fuel was delivered to the filling station after 10 days, and there was a rush to obtain fuel due to the absence of a proper system of distribution, the report said.

The man collapsed during the rush and was admitted to the Meegahatenna Regional Hospital where he was ruled dead upon admission, it added.

This is not the first time that a person has died while waiting for fuel in Sri Lanka.

Similar incidents have been reported since the beginning of 2022, with some even dying of exhaustion brought about by severe heat.

Last week, Power and Energy Minister Kanchana Wijesekera introduced a National Fuel Pass for the citizens to obtain fuel through regularising distribution, according to news portal Economy Next.

The new fuel pass will allow each motorist to obtain a minimum quantity of fuel on a weekly basis, Wijesekera said.

Despite these measures, filling stations are going dry and frequent clashes are being witnessed near filling stations across the country.

Sri Lanka received the first of three fuel shipments last week, Wijesekera said, the first shipments to reach the country in about three weeks.

Meanwhile, Sri Lanka's inflation firmed up in June as the country's broader measure of consumer prices jumped by 59 per cent from a year ago, accelerating from 45.3 per cent in May, according to the country's National Consumer Price Index.

Sri Lanka's newly-elected President Ranil Wickremesinghe, has been leading crucial talks with the International Monetary Fund, last week said that negotiations were nearing conclusion.

Sri Lanka needs about USD 5 billion in the next six months to cover basic necessities for its 22 million people, who have been struggling with long queues, worsening shortages and power cuts.

(With PTI Inputs)

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