In recent years, Sri Lanka has often been depicted as a cautionary tale of debt-trap diplomacy, a country ensnared by substantial foreign loans and ambitious infrastructure projects that have strained its economy.
Be it Hambantota port, often cited as the quintessential case of Chinese debt-trap diplomacy or Norochcholai Power Plant, which has burdened the economy and added health issues to the local community, Chinese investments in Sri Lanka are being closely scrutinised by the Sri Lankan government.
A recent and significant example of this scrutiny is the ban on Chinese-operated sea cucumber farms. On June 17th, Minister of Fisheries Douglas Devanand announced that Chinese nationals will not be allowed to cultivate sea urchins in Jaffna district any more. The announcement comes in after years-long efforts of activists, local fishermen and people of Jaffna who have been raising their voices and concerns regarding the ill-effects of these farms. According to a 2023 report published by South Asia Foresight Network titled ‘The Baneful Existence of Chinese Sea Cucumber Farms in Sri Lanka’, Chinese sea cucumber farms and hatcheries are concentrated in the Northern part of the country, more specifically, along the coast of Jaffna and Killinochchi.
The report notes that Sri Lanka’s sea cucumber farming industry, a once sustainable practice, faces growing challenges with the advent of large-scale Chinese-operated farms. Unchecked exploitation and insufficient regulatory oversight have led to environmental degradation, overharvesting, habitat destruction, and a decline in marine biodiversity. The unregulated Chinese farms are also posing a great threat to local population by blocking their access to traditional fishing grounds by illegally capturing marine areas, depriving them of their primary income source.
Local fishermen are forced to sell their sea cucumber catch at a marginal rate of SLR 1,500 per kilogram, while these are sold by the Chinese operators at an exponential rate of 20,000-30,000 SLR per kilogram. This stark disparity highlights the economic strain on local communities.
The ban comes as a great relief to protesting fishermen who have been relentless in their demand to ban these Chinese sea cucumber farms. At the same time, Sri Lankan government is also actively promoting local and indigenous sea cucumber hatcheries, which are often described as ‘black gold’ for the high prices they fetch. According to an article by EconomyNext, a kilogram of sea cucumber was valued at 20,000-30,000 Sri Lankan rupees last year.
While the Jaffna locals have welcomed this decision, viewing it in the larger context of geopolitics, it is another strategic move by Sri Lanka to distance itself from China. It seems like the island nation is now determined to rewrite its narrative, shifting from the image of a victim to a beacon of resilience and strategic economic reform.
Sri Lanka is actively seeking to counterbalance China’s influence through various strategies that involve diversifying its international partnerships and strengthening its domestic policies. One significant approach is enhancing economic and strategic ties with India, including joint ventures in infrastructure and defense cooperation.
In November 2023, Sri Lanka signed a $553 million agreement with the U.S. International Development Finance Corp. for a port development project in Colombo, backed by India’s Adani Group. Sri Lanka also awarded a Wind Mill Project to Adani Green Energy to build two wind power plants in the northern regions of Mannar and Pooneryn, after scrapping a tender won by a Chinese firm.
In January 2024, Sri Lanka imposed a one-year ban on Chinese research ships entering its ports. Additionally, Sri Lanka is engaging with Japan, which has invested in key infrastructure projects like the Light Rail Transit system in Colombo and provides concessional loans and grants. In May 2024, Sri Lanka and Japan agreed to resume stalled bilateral projects including a $1.5 billion Japanese-funded light railway. Sri Lanka has earlier pulled out of the project in 2020 when it was more closely aligned with China.
Improving relations with Western countries, particularly the United States and the European Union, is another crucial strategy. Potential economic support through the Millennium Challenge Corporation and trade agreements like regaining GSP+ status are pivotal in this regard. Sri Lanka is also participating in regional organizations such as ASEAN, SAARC, and BIMSTEC to foster regional cooperation and economic integration. Engaging with multilateral institutions like the International Monetary Fund, the World Bank, and the Asian Development Bank provides alternative financial support and economic guidance. These combined efforts aim to create a balanced and sustainable approach to foreign relations and economic development, reducing overreliance on China.
In conclusion, Sri Lanka’s proactive measures to counterbalance China’s influence reflect a strategic pivot towards diversifying international partnerships and reinforcing domestic policies. By enhancing ties with neighboring India, engaging with Japan, and improving relations with Western nations like the United States and the European Union, Sri Lanka is striving to create a balanced approach to its economic and geopolitical challenges. The recent ban on Chinese-operated sea cucumber farms exemplifies the country’s commitment to protecting local interests and promoting sustainable practices. Through regional cooperation and engagement with multilateral institutions, Sri Lanka is not only safeguarding its sovereignty but also paving the way for resilient and inclusive economic development. These concerted efforts underscore Sri Lanka’s determination to shift from a narrative of debt-trap vulnerability to one of strategic resilience and economic reform.
