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China to the Rescue in Sri Lanka

Beijing first stepped forward to assist Colombo, a move with geopolitical ramifications.

By Rathindra Kuruwita for
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China to the Rescue in Sri Lanka

Sri Lankan police officers stand guard at a check point during a curfew imposed to stop spreading of a new virus in Colombo, Sri Lanka, Sunday, April 12, 2020.

Credit: AP Photo/Eranga Jayawardena)

While countries like Sri Lanka have the capacity to implement a pandemic lockdown, they need technical assistance to test the extent of the spread of the novel coronavirus and to determine when it is safe to lift imposed restrictions. They also need funds that can help them weather the economic recession forecasted in the coming months. The World Bank expects a recession in Sri Lanka in the coming months with forecast growth between -3 percent to -0.5 percent for 2020 while PricewaterhouseCoopers (PwC) expects Sri Lanka’s economy to grow under 2 percent in 2020 if the country manages to contain the COVID-19 pandemic by the middle of the year.

To open up the economy in addition to ensuring that there will not be an outbreak after curfews are lifted, Sri Lanka and others in similar situations need technical assistance to contain the spread of the virus and a model to can follow. China is willing to offer both.

China to the Rescue?

Like many developing nations with extensive government structures, Sri Lanka has responded to COVID-19 with aggressive quarantining, imposing a partial lockdown and by promoting social distancing. Currently, Sri Lanka has entered the fourth week of curfew mandating that Sri Lankans, apart from those engaged in essential services, remain home. While this has ensured that the spread of the disease is low (233 cases by April 15) the country needs to greatly expand its testing capacity and it also needs masks, ventilators and personal protection equipment (PPE), which are in short supply. 

This is a situation faced by many nations in the developing world that have organized quarantines, but lack the technical capacity to ensure that an adequate number of people are tested. Testing is important to diagnose those with the virus and to work out how far the virus has spread in the country; this in turn will allow nations to decide when to lift their lockdowns and to attempt to bring about normalcy. Sri Lanka carried out around 150 PCR tests on average between March 25 and 30 and it has increased that up to 300. However, the Government Medical Officers Association (GMOA), a professional body comprising of Sri Lanka’s doctors, insist that the country has over 42,000 people who have had contacts with those who have tested positive for COVID-19 and that at least 1,500 tests need to be carried out daily. Moreover, Sri Lanka suffers from a lack of resources and organizational skill to scale up testing. The inability to scale up testing has caused tensions between the GMOA and the Ministry of Health. Given the situation, the Sri Lankan government has turned to the international community for aid and technical assistance. 

China first stepped up. Between late March and early April, the Chinese government and companies that are involved in major projects in Sri Lanka have donated a large amount of masks, PPE, and test kits. Among these companies are China Merchants Port Group (CMPort), the parent company of Colombo International Container Terminals (CICT) and Hambantota International Port Group (HIPG); CHEC Port City Colombo, the company behind the project building a financial centre on 269 hectares of land reclaimed from the sea; Metallurgical Corporation of China (MCC), which has won the contracts to build a number of infrastructure projects, including an airport highway; China National Aero-Technology International Engineering Corporation (AVIC-ENG), which built infrastructure projects from highways to water supply projects and Huawei; and a telecommunications giant with an office in Colombo.

China has also granted Sri Lanka a concessionary loan of $500 million, upon request, to aid its efforts to combat COVID-19. Chinese Acting Ambassador Hu Wei earlier presented Sri Lankan Minister of Health Pavithra Wanniarachchi a document that details lessons learned in China’s handling of COVID-19, which could be used by Sri Lankan authorities in their own battle against the pandemic.  Sri Lanka also received 20,064 detection kits (PCR-Fluorescence Probing) for COVID-19 from Jack Ma, whose foundation is currently donating 1.8 million masks, 210,000 test kits, 36,000 protective suits, plus ventilators and thermometers to Afghanistan, Bangladesh, Cambodia, Laos, Maldives, Mongolia, Myanmar, Nepal, Pakistan, and Sri Lanka. 

The United States promised $1.3 millionto help protect healthcare workers and slow the spread of the virus with infection prevention and control support.” The European Union (EU) said it will provide a 22 million euro ($24 million) grant to support Sri Lanka’s COVID-19 response. These pledges came on April 9, long after Chinese assistance began flowing.

Winning the PR War

This also follows favorable media coverage about the manner in which China tackled the COVID-19 epidemic. In recent weeks Sri Lankan doctors and security officials, two groups that have won admiration from the general public for the role they play, have continuously praised the decisiveness of the Chinese government and the discipline of the Chinese people. Thus the methodologies China used to tackle COVID-19 in Wuhan are seen as a model Sri Lanka can follow; this is a situation that can be observed in many countries that have received Chinese assistance. With continuous aid, which makes China seem like a friend in need and the positive coverage of their COVID-19 response, many people no longer see China as the origin of the virus but a model which is to be emulated

As earlier mentioned, what countries in the third world lack are the technical means of dealing with COVID-19, from PPE to test kits. In a discussion with Italian Prime Minister Giuseppe Conte, Chinese President Xi Jinping suggested a new “Health Silk Road,” through which China will share the lessons learned in combating COVID-19 with partners around the world. China was the first country to respond to Italy’s calls for aid; as such, China won a major PR victory in a country that has been the most open EU nation to the Belt and Road Initiative (BRI). Similarly, Chinese Acting Ambassador to Sri Lanka Hu Wei already shared the Chinese experience with Sri Lankan authorities, even before Sri Lanka imposed a lockdown. This approach has been also used in Serbia, where Chinese specialists have de facto taken charge of their containment efforts. The Chinese assistance turned Serbia from a potential coronavirus hotspot to a relative success story. After the arrival of Chinese specialists, testing is being massively increased and the  Serbians are now also using hospitals to house people with mild symptoms, to prevent them from infecting their families. Sri Lanka is also aggressively separating those who have been potentially exposed to COVID-19 into detention centers. All steps taken from China’s playbook. 

Foreign Aid and Geopolitics 

There is a school of literature that highlights the role of aid as a foreign policy tool. Bernhard Reinsberg in 2019 demonstrated that a number of countries had used aid as a part of campaigns to become a temporary member of the United Nations Security Council (UNSC). This is neither a new phenomenon nor one practiced by one country. In their Introduction to the Geopolitics of Foreign Aid, Helen V. Milner and Dustin Tingley claim that the richest states in the world have used “transfers of goods, services, and funds as a means of interacting with other countries” and that while “it is hard to pinpoint which goals aid actually achieves. But aid has always had geopolitical ramifications.” 

Foreign aid and loans have been a substantial share of the total government budget of Sri Lanka for decades. Especially in the years following the civil war, Sri Lanka has increasingly turned to non-traditional development partner financial disbursements and government and sovereign bond sales. According to various reports Sri Lanka’s 2017 market borrowings, which included International Sovereign Bonds and Sri Lanka Development Bonds accounted for 53 percent of foreign debt, up from just 3 percent in 2000. 

While Sri Lanka has a reputation for honoring its loans, given the economic slowdown following the 2019 Easter Sunday bombings and the impact of COVID-19, Sri Lanka urged its debtors to give it more time to pay back its loans. It will be difficult for Sri Lanka to access funding from international markets, given the high interest rates; it is likely that the country will seek assistance from donor nations. Given the economic impact of COVID-19, very few nations are likely to be in a position to assist Sri Lanka and so far only China has offered a concessionary loan of $500 million, to be paid in 10 years. As the country struggles to keep its economy going, a large number of companies have announced cuts to salaries and staff. Sri Lanka’s export sector, especially garments and tea, are expected to suffer heavily and, with a large number of migrant workers losing jobs, it is not unrealistic to expect that Sri Lanka will increasingly fall into China’s orbit.

Rathindra Kuruwita is a journalist and a researcher from Colombo, Sri Lanka. He holds a MSc in Strategic Studies from S. Rajaratnam School of International Studies, NTU, Singapore. He writes on security and international relations to several publications and has written extensively on Sri Lanka – China relationship.