[PreludeSH]

End of Civil war and peace was supposed to help the country. But looks like its gone in the opposite direction. Not sure if economy was an issue in electing the representatives or other reasons.

China will not help, they can only offer loans at high interest (thank god). Its in India's interest to help them not just for strategic value but also for human values.

Also sheds light on having only tourism as your main revenue source !

[dragracer567]

Honestly, the Sri Lankans brought it upon themselves. They elected the Rajapaksa family to power because they wanted a ruler with an iron fist. With COVID, their FOREX reserves had already dried up and that’s when the Sri Lankan president brought the sweeping declaration that only organic fertiliser will be used (and not phased in as recommended) which devastated the tea exports, further reducing FOREX.

Sweeping declarations aren’t uncommon in our neighbourhood, our own DeMo is an example but India had the economic muscle, relatively strong institutions and a very diversified economy to weather the storm, something Sri Lanka doesn’t have despite it being twice as rich as India per capita.

Also, to be noted that Sri Lanka has never really seen poverty like our own northern states for example, so food shortages are actually new to the majority of the Lankan population.

Overall, it’s really depressing, I’ve some very close and good friends in Sri Lanka and it’s a very beautiful country reminiscent of Kerala. I hope Sri Lanka will remember how China snubbed them (for returning bad quality organic fertilisers) while India helped them at a time of crisis. India has a stake there, apart from being our neighbours, we just spent $2.4 billion bailing them out while Bangladesh sent another $100-300 million (can’t remember the exact amount).

[padmrajravi]

This is really troubling. The Indian government does not have a choice but to help Srilanka here. Otherwise, China will just make Srilanka one of their province just like Hongkong. The Chinese invasion is now a very big threat to our future generations. They have control over all our neighboring countries.

[omranga98]

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[Electromotive]

Diplomatically, this seems like a re-run of the Iran scenario and India lost a nice chunk of investment in Iran. Fact of the matter is India cannot match the economic and military might of China. India might offer its paltry help but China can swoop in any time with bigger gifts and win Sri Lanka's loyalty. Similar issue with India's plans in the Indo-pacific.

Given how quickly our trade deficit with China is swelling, China might not even have to use military tactics to conquer territory, our govt. might just let them take/keep it.

[Dhillon]

Originally Posted by srini1785

Simple math:

Tax revenue : 7.3B$
External Debt : 35B $ ( Total Debt 2021)
GDP : 80B $ (GSD figures 2021).

Debt to GDP ratio : 101.

Am I missing something here? Debt to GDP ratio is = Total Debt/ Total GDP

So 35/80 comes to about 44%
Sorry but a bit confused.

[srini1785]

Originally Posted by Dhillon

Am I missing something here? Debt to GDP ratio is = Total Debt/ Total GDP

So 35/80 comes to about 44%
Sorry but a bit confused.

I believe the term is correct.

https://tradingeconomics.com/sri-lan...nt-debt-to-gdp

I am not big on economics and from what I understand its not as simple as Total Debt/ Total GDP.

[Dhillon]

Originally Posted by srini1785

I believe the term is correct.

https://tradingeconomics.com/sri-lan...nt-debt-to-gdp

I am not big on economics and from what I understand its not as simple as Total Debt/ Total GDP.

Thanks! Well, its actually this simple only.
Googled a bit and the total debt stands at 81 Billion USD.
Quoting from the article :- "Sri Lanka's debt profile reveals its economy -- valued at $81 billion of gross domestic product in 2021"

Source - https://asia.nikkei.com/Economy/Sri-...mestic-economy

[sierrabravo98]

Originally Posted by Electromotive

Diplomatically, this seems like a re-run of the Iran scenario and India lost a nice chunk of investment in Iran. Fact of the matter is India cannot match the economic and military might of China. India might offer its paltry help but China can swoop in any time with bigger gifts and win Sri Lanka's loyalty. Similar issue with India's plans in the Indo-pacific.

Given how quickly our trade deficit with China is swelling, China might not even have to use military tactics to conquer territory, our govt. might just let them take/keep it.

Comparing the Iran compromise (which is what we did for all practical purposes) with the Sri Lankan situation is like comparing the merits of seat ventilation to that of air-conditioning. While both are steps in the same direction (superior passenger comfort), the utility is vastly different. Sri Lanka is an extension of Tamil Nadu (apologies to any Sri Lankans reading this but this is the bitter truth) for us for all practical purposes insofar as security from China is concerned. We may as well hand over Rameshwaram to China (a bit much but that is the seriousness of the issue at hand). We simply cannot allow China to "swoop" in and win the loyalty of the Lankans.

As it is, the Lankans are well aware that China is not in the habit of distributing free money. China will take both your kidneys and lungs (along with your heart if need be) in lieu of the money it gives (just look at Pakistan and the amount territory/public property mortgaged to the Chinese for that monetary sinkhole of a project called CPEC). The Sri Lankans are not nincompoops. They will play the fine game of balancing both India and China in order to extract moolah (in proportion to the economic strength of both nations) and then run to India for deliverance at the first sign of Chinese hostility. They know that we would have no option but to rescue them as the alternative would be to give up the control of our Eastern seaboard to the much superior PLAN. The Chinese already have bases in Myanmar (that whole Charlie-Foxtrot requires a seperate dedicated thread).

P.S: Trade Deficit and Debt Trap Diplomacy are apples and oranges insofar as the context of
current discussion is concerned. We can turn off the former at will (at great economic costs to the Indian economy of course) while the same is not true about the latter. You cannot escape repayment of Chinese money. Also, Imports from China will only increase in the short term as there is no other source to satiate the exploding consumer demands of Indians. The recent policy initiatives taken by the GoI to ameliorate the situation will take time to show results.

[alpha1]

India will do well to understand that China already has its tentacles deep in Sri Lanka, as many other forum members have posted - a journey which has taken China pretty long.
Economic support for political/sovereign strategy.

Chinese naval ships are observed with alarming regularity on Indian coast within the exclusive economic zone, and their submarines even closer.


Also as per common knowledge Chinese have mapped the large tracts of sea floor of Indian ocean - a knowledge which is extremely useful for tactical maneuvers and operations of sonar.

Now, in view of this I believe the interest free support offered by Indian Govt ($500 million) is a step in right direction. We simply cannot afford a satellite of China snapping at our heels.

[Electromotive]

Originally Posted by sierrabravo98

We simply cannot allow China to "swoop" in and win the loyalty of the Lankans.

We simply aren't strong enough to prevent it. Already happened with Nepal.

Originally Posted by sierrabravo98

The Sri Lankans are not nincompoops. They will play the fine game of balancing both India and China in order to extract moolah (in proportion to the economic strength of both nations) and then run to India for deliverance at the first sign of Chinese hostility. They know that we would have no option but to rescue them

You are not factoring in corrupt politicians who will sell their tiny island nation. It is only a matter of time. Only thing India can do is induce political unrest and stage a coup to transfer power but China will probably execute it better and they already have the politicians in their pocket. So, no, Sri Lanka ain't running to India for anything.

Originally Posted by sierrabravo98

P.S: Trade Deficit and Debt Trap Diplomacy are apples and oranges insofar as the context of current discussion is concerned. We can turn off the former at will (at great economic costs to the Indian economy of course) while the same is not true about the latter. You cannot escape repayment of Chinese money. Also, Imports from China will only increase in the short term as there is no other source to satiate the exploding consumer demands of Indians. The recent policy initiatives taken by the GoI to ameliorate the situation will take time to show results.

A ballooning trade deficit can lead to a debt trap but India can attract investments and there is always the world bank and IMF. Make in India has barely achieved anything except a few assembly plants and leeches trying to abuse the PLI scheme. The bitter truth is our economy and military are hilariously weak and policy makers are blissfully incompetent. A lot of China's foreign policy is directed at making sure India either becomes an ally or becomes a submissive non-threat. And China would love nothing better than to demonstrate its new found military might, preferable on a weaker nation such as ours.

[GTO]

Mod Note: Soft reminder of our rules, guys. No political discussions please.

[libranof1987]

OT:

Originally Posted by M.Dua

i am travelling to Srilanka in March end with family and friends, will you guys recommend otherwise? i just have ticket cancellation charges to bear as of now. This looks like a very sorry state

Please go. Tourism is unaffected. Sri Lankans are one of the warmest hosts I have encountered and SL is a very beautiful country. Absolutely worth a visit.

[2000rpm]

Originally Posted by iamahunter

I understand the part of "help thy neighbors" but at what cost!?
!

You need to understand the geo-political landscape friend. If we wont help, China will. And we will be cornered from all sides.

[EV NXT]

Countries going bankrupt. No oil, no gas, no food, no water..is this a possible post Covid future?

India helps Srilanka with $500 million when Srilanka hasn’t yet repaid China’s debt and has given China a port or two in return.

Does India really think Srilanka will ever repay the money?

Or is India looking for a port or two in return like China?