India's Strategic Play: Shifting South Asia's Balance
13th February, 2024
What potential shifts in alignment might occur in South Asia as a result of India's strategic maneuvers in Sri Lanka?
First Layer
In analyzing the potential shifts in alignment in South Asia, particularly due to India's strategic maneuvers in Sri Lanka, it is imperative to undertake a granular examination accounting for deep-seated historical ties, growing economic dependencies, and emergent military and technological collaborations.
India's multipronged engagement with Sri Lanka has been marked by historical cultural connections and a shared colonial legacy, further extrapolated by India's focused regional foreign policies, including the 'Neighborhood First' policy and the vision encapsulated in SAGAR (Security and Growth for All in the Region) initiative. The guiding tenet of these policies has been the integration of economic and security paradigms, aiming to foster a stable and prosperous periphery conducive to regional stability.
The potential shifts in alignment are influenced by factors that encompass and extend beyond the provision of India's immediate material and strategic support. In-depth scrutiny of these factors alongside recent economic crises clarifies just how indelibly intertwined Sri Lanka's political and economic stability is with India's strategic directives.
Financial Entwinement and Political Realignment
Sri Lanka's acute economic distress accentuated by the foreign exchange crisis has precipitated an environment wherein India’s financial interventions are perceived as lifelines. This perception is grounded in substantive actions such as the provisioning of a $400 million currency swap facility and a $1 billion credit line that facilitated Sri Lanka's access to essential commodities amidst economic turmoil. The International Monetary Fund (IMF)'s engagement in Sri Lanka's economy, with India as a key stakeholder and advocate for fiscal and structural reforms within the IMF realm, signals a paradigm of collaborative fiscal stewardship.
Magnetic Impact of Defense Cooperation
Moreover, the Dornier aircraft donation exemplifies India’s strategic generosity, aimed at enhancing Sri Lanka’s maritime domain awareness. However, this overt defense aid is not simply a bilateral endeavor but resonates in creating regional security architectures subtly aligning with India. The aircraft’s ISR (Intelligence, Surveillance, Reconnaissance) capabilities not only serve Sri Lanka’s interests in maritime security but also stand as a testament to India's regional defense diplomacy, reinforcing India’s image as a first responder and a builder of collective security infrastructure.
Digital Diplomacy and Soft Power Sway
India's digital diplomacy efforts, as postulated in its potential digital identity collaboration with Sri Lanka, further epitomize India’s soft power sway. Digital platforms, exemplified by the Aadhaar initiative, have been critical in elevating India's internal socio-economic agenda. The extension of such a framework to Sri Lanka could influence socio-political dynamics by driving efficiency and transparency in governance, thus potentially aligning Sri Lanka closer to India's digital governance model.
Anticipated Election-led Dynamics
Internal political landscapes in Sri Lanka are complex and fluid, especially with the prospective upcoming presidential elections. Potential changes in leadership, signified by the anticipated candidature of President Ranil Wickremesinghe and the rise of the JVP (Janatha Vimukthi Peramuna), demonstrate shifts in political undercurrents which could shape Sri Lanka's foreign policy and engagement with regional powers, including India.
Integration of Local and Regional Factors
Addressing the potential biases in evaluation, it is not a given that the Indian role is unanimously perceived as a stabilizing force within Sri Lanka. Local resistance, exemplified by grassroots movements and political opposition, illustrates a spectrum of sentiment towards Indian involvement ranging from welcoming to wary. The Anti-India sentiment, while not pervasive, is potent enough to create waves of political resistance, and thus cannot be disregarded.
Scenario Probabilities and Realignment Projections
Projecting forward, we posit several discernible scenarios of geopolitical shifts in response to India's strategic activities in Sri Lanka:
Deepened Bilateral Cooperation
Economic assistance from India translates into reinforced political ties and a possible pivot of Sri Lankan foreign policy more favorable towards Indian regional security paradigms.
Titration of Power Balances
Persistent internal political dissatisfaction and opposition towards Indian predominance may compromise the bilateral rapport, yielding space for other regional actors such as China to assert influence within Sri Lanka.
Maritime Security Centric Realignment
Ongoing and future maritime defense grants, coupled with cooperative security engagements, may solidify a security-oriented alliance that acts as a counterbalance to incursions by other major global powers in the Indian Ocean.
Indo-Pacific Multilateralism
Sri Lanka’s harnessing of India’s regional strategies could result in broader alignment within cooperative multilateral frameworks that augment its geopolitical positioning vis-à-vis the overarching Indo-Pacific strategy.
Each scenario carries stipulated timelines and identifiable causal sequences requiring further evidence-based substantiation to fortify their likelihood. Cascading impacts from these scenarios include alterations in trade, investment flows, and military cooperation levels which demand close monitoring.
Synthesis and Recommendations
In conclusion, the potential shifts in alignment in South Asia due to India's strategic engagements in Sri Lanka could have far-reaching implications not only on bilateral relations but also on the regional security architecture and economic nexuses. It is recommended that India maintain a balanced portfolio of soft power influence through economic, humanitarian, and digital contributions, while adhering to principles of regional sovereignty and non-imposing partnerships. Furthermore, India must continue to navigate the sensitivities within Sri Lanka's political ecosystem, calibrating its engagements with an eye towards enhancing mutual trust and ensuring mutual benefits.
Hence, we project that Sri Lanka's alignment within South Asia may tilt increasingly towards India if economic, defense, and digital engagements continue to provide tangible benefits to Sri Lanka, provided that internal political currents do not significantly impede this trajectory. Indian stakeholders should make time-bound decisions with awareness of evolving political landscapes, internal and external countermeasures, and the dynamic tapestry of South Asian geopolitics to capitalize on the probable realignments.
Second Layer
In contemplating the potential shifts in the geopolitical alignment of South Asia as a result of India's active strategizing in Sri Lanka, it becomes obligatory to dissect not only the overt forms of cooperation and assistance but also the subtle interplays of influence, leverage, and autonomy. The actors in this regional theater manifest multifaceted intentions and capabilities, yielding a milieu where soft power competes, and often intertwines, with hard power realities.
Deeper Analysis of Financial Interventions and Sovereign Implications
The financial interventions rendered by India, such as the $400 million currency swap and $1 billion credit line for essential imports, are more than economic lifelines – they are diplomatic chess moves cloaked in non-alignment guises. While at face value, these engagements serve to alleviate economic distress, they simultaneously enmesh the recipient, Sri Lanka, into a web of fiscal diplomacy where sovereign decision-making can be significantly impacted. The IMF's role, with India as a critical proponent in the fund's deliberations on Sri Lanka’s economic restructuring, necessitates a meticulous unpacking of conditionalities placed upon the recipient country and the ramifications these may have on the greater geopolitical realignment.
Military Assistance: A Tool of Strategic Depth
India's donation of the Dornier surveillance aircraft exemplifies the extension of military capability as a means of forging deep-seated defense partnerships. While bolstering Sri Lanka's ISR proficiencies, such aid also seats India comfortably in a pivotal regional security position. However, there exists the possibility that such gifts of defensive prowess could inadvertently increase Sri Lanka's reliance on Indian military benevolence, which may provoke domestic discomfort among those wary of too-great a dependence on external powers. An extensive inquiry into past defense cooperation outcomes in similar contexts could anchor these suppositions in empirical data.
Transnational Influence via Digital Governance and Identity Systems
India’s proposed development of a digital identity collaboration with Sri Lanka could serve as a pacemaker for a new strand of influence through digital governance initiatives. However, in dissecting these prospective developments, it is crucial to scrutinize the socio-political repercussions beyond efficacy – particularly, the potential for public pushback regarding data privacy, digital surveillance, and the resilience of civic freedoms within an increasingly digitized public administration system. Hence, the promise of digital empowerment must be balanced against the spectral risks of digital disenfranchisement.
A Confluence of Elections and Political Currents
The forthcoming presidential elections in Sri Lanka imbue the regional environment with a volatile political potentiality. With President Ranil Wickremesinghe signaling intent for re-election and the rise of JVP, electoral outcomes will inevitably hold sway over the direction and magnitude of external geopolitical vectors. A granular analysis of election processes, candidate manifestos, and party alignments is essential to elucidate the implications of each possible result on the geopolitical predispositions of the nation.
Probing Beneath the Surface: Grassroots Movements and Nationalist Sentiments
Sri Lankan grassroots movements—reminiscent of the “India Out” campaign—coupled with nationalist undercurrents, unravel a narrative that reflects more than fleeting anti-Indian sentiment. Probing these factions will necessitate a delicate examination of national consciousness that may contest or accommodate the span of India’s influence. There remains a critical need to adopt diverse linguistic analyses and sociological methodologies to dissect these populist sentiments and their implications on national policy perspectives.
Subtle Complications and China’s Counter-balance
The complexities introduced by China's entrenched position within Sri Lanka, through investment in key projects like Hambantota and Colombo Port City, require a more nuanced assessment. China's strategic persistence and tendency to recalibrate its mechanisms of influence in the face of competing powers need to be comprehensively analyzed. This presents a premise where India’s maneuvers must be contextualized within a competitive landscape where Chinese commitments have already laid substantial groundwork.
Appraising Unexplored Facets: Climate Assessments and Small-State Agency
Examining less visible factors such as the impact of climate change on small-state strategies or the acknowledgment of technological sovereignty requires a paradigm where antecedent conditions do not predetermine future geopolitical narratives. Investigating diverse scenarios such as the potential for non-traditional alliances, including smaller regional actors or parametric non-state influencers, must be undertaken.
Concluding Synthesis: Directed Complexity, Alignment Foresight
To forecast the geopolitical shift, a conclusion extrapolating from the myriad deliberations posits the following scenarios: Firstly, a scenario wherein bilateral cooperation and soft power affirmations result in a steadfast alignment between the island nation and India, partially attenuating China's momentum. Secondly, an outcome marked by an exacerbation of nationalist fervor in Sri Lanka, pushing it into a protective retraction from external influences yet paradoxically rendering it susceptible to diversified international overtures. Thirdly, an emergent possibility that despite hardened geopolitical lines, a novel construction of a digitalized, climate-resilient, and economically sovereign South Asia could take precedence over traditional alignments, fostering innovative multilateral engagements.
A completion of this layered assessment dictates that India's current strategic actions, if unipolarly pursued, could insidiously encroach upon the sovereign agency of Sri Lanka. Therefore, a prescriptive consideration advocates for India to consciously pursue a modus operandi that synthesizes domestically empathic navigations with a structural, multilateral diplomacy that serves the interests of independent statehood, resilient regional integrity, and the composite South Asian commonwealth.
NA Preparation
Material Facts
In conducting a detailed analysis of the geopolitical influence and financial clout of India in the context of Sri Lankan politics and economic stability, it is critical to evaluate a spectrum of tangible and data-driven material facts. These facts form the backbone for understanding the nuanced interplay of India’s strategic initiatives and their potential cascading effects on regional alignments in South Asia.
The 'Neighbourhood First' policy and the Sagar initiative epitomize India's commitment to regional stability and collaboration. India's security assistance, notably the donation of a Dornier surveillance aircraft to Sri Lanka, is a strategic embodiment of this policy. The surveillance aircraft, with its specific technical capabilities for intelligence, surveillance, and reconnaissance (ISR), enhances Sri Lankan maritime domain awareness and has a multiplier effect on its military capabilities. This technical bolstering of Sri Lanka's military may subtly recalibrate regional security dynamics and perceptions of India's influence on the island, laying the groundwork for possible realignment.
India's diplomatic strategy involves positioning itself as a first responder in times of crisis. For instance, India's swift reaction to the Maldives during the water crisis in 2014 through the dispatching of freshwater supplies cemented its role as a dependable ally. Similarly, humanitarian endeavors and defense cooperation, such as the supply of maritime security and counterterrorism equipment, solidify bilateral relationships and trust, which can have profound long-term implications for regional alignments.
The economic dimension is equally telling. India's financial interactions, for instance, through credit lines and assistance to Sri Lanka during economic hardships, such as the offer of a $400 million currency swap facility in 2020 and a $1 billion credit line in 2022 for essential imports amidst the economic crisis, underpin its role as a strategic partner. Conversely, China's substantial commitments toward infrastructure in Sri Lanka, specifically the investments in the Hambantota and Colombo Port City projects, create a dichotomy of influence and pose challenges to India's analogous efforts within the region.
India's domestic political narratives, particularly the Hindu nationalist undertone under PM Modi's government, exert influence on its external engagements. The cultural-political significance of events such as the Ram temple construction in Ayodhya transmits an assertive ideological statement, with potential effects on India's religious diplomacy and its sway over countries in the region with significant Hindu populations or close cultural ties.
Japan's financial dialogues and renewed engagement with Sri Lanka suggest a nascent alignment with India, potentially tempering China's solitary economic dominance by fostering an Indo-Japanese cooperative stance in the region's multipolar contours.
As for the shifting economic tides influenced by US-China trade tensions, the estimated reduction of US$7.4 trillion in global economic output due to heightened trade barriers holds particular relevance. With India’s strategic alignment with the US, a coalescence of economic and security affairs is evident, with the decoupling from China impacting trade flows and investment scenarios in South Asia.
Elections within the region also serve as inflection points for potential alignment shifts. For example, the competitive landscape of Sri Lankan politics, with stark contrasts between the incumbent president and opposition forces like the Marxist JVP, underscores the mercurial nature of India’s strategic ingress subsequent to changes in leadership. More broadly, the suite of elections set for 2024 in South Asia could introduce a new spectrum of domestic policies, which could reshuffle India’s ability to project power and influence regional nexuses.
In synthesis, the canvas of South Asian geopolitics is textured with India’s intricate strategies that range from defense contributions and economic aid to sociopolitical and ideational interplays. These multi-dimensional material facts offer critical insight into how India’s maneuvers in Sri Lanka may precipitate shifts in the geopolitics of the region. A granular net assessment necessitates parsing through these empirical details and their interconnectedness to unravel the probable trajectories of South Asian alignments.
Force Catalysts
In the intricate geopolitical tessellation of South Asia, with India's regional maneuvers potentially inducing alignment shifts, it is imperative to undertake a multi-dimensional dissection of Force Catalysts. This detailed examination will consider the breadth of leadership paradigms, the depth of resolve in strategic posturing, the variability of initiative in domestic and international policy-making, and the entrepreneurship evident in the pursuit of innovative geopolitical strategies.
Leadership
The leadership dynamics in India and Sri Lanka involve a complex interplay of domestic ambitions and foreign policy imperatives that translate into stratagems with regional ramifications. Prime Minister Narendra Modi's leadership—characterized by assertive diplomatic outreach, a pivot towards technological empowerment, and a bolstering of defense capabilities—aligns with India's objective to emerge as a pivotal power broker in the region. It is informed by his political ideology nurtured by the Rashtriya Swayamsevak Sangh (RSS), combined with his tenure as a Chief Minister and experiences during key regional events, such as the 2001 earthquake in Gujarat, which have ingrained a penchant for decisive action and strategic agility in Modi's leadership ethos.
The evolution of Sri Lanka's leadership, amidst shifting politico-economic landscapes, must be assessed in light of the antecedent political experiences and socio-economic background of its leaders, which have historically swayed between nationalist assertion and pragmatic cooperation. The likely ascendancy of Sajith Premadasa, noted for advocating a progressive democratic agenda and greater inclusivity, against current President Ranil Wickremesinghe's establishment-backed stance, presents a dichotomy that could significantly skew Sri Lanka's foreign policy and strategic alignments. A deeper exploration of the prospective leaders' psychological makeup and their administrative proclivities is critical in postulating future orientations, particularly in response to India's initiatives like the proposed economic and technical partnerships.
Resolve
Resolve, as manifested in the realm of international conflict and alliance formation, is a reflection of a nation's adamantine commitment to its strategic goals amidst adversity. India has demonstrated unyielding resolve in establishing itself as a resilient regional partner, a pivot underscored by its response to the Maldives' defense and Sri Lanka's economic needs. This resolve is enshrined in doctrinal shifts such as India’s ‘Neighbourhood First’ policy. Meanwhile, Sri Lanka's engagement with varied international stakeholders, including the United States, Japan, and China, illustrates a gravitation toward multi-vector foreign policy shaped by economic imperatives and the exigency to navigate a turbulent domestic political milieu. Sri Lanka’s maritime security conversations with Admiral John Aquilino, alongside its receipt of security aid, epitomize a recalibration of strategic resolve in the face of internal and external security challenges.
Initiative
The capacity to independently seize opportunities and effect autonomous decision-making, initiative is keenly evidenced in India's recent strategic deployments. The augmentation of its digital and infrastructural framework, seen in the implementation of the Aadhaar biometric system, exemplifies an initiative that meshes technological integration with socio-political objectives. Concurrently, Sri Lanka's independent policy reverberations, as observed in its endeavors to manage economic upheaval manifested in initiatives such as the National Fuel Pass system, suggest an evolving nationality, which engages with incumbent global power structures, while navigating complex geopolitical relationships.
Entrepreneurship
Entrepreneurship within the context of geopolitical dynamics encapsulates a state's prowess in innovation and risk-taking within the ambits of international relations. India's engagement in multi-lateral groupings and defense coalitions, evident in its participation in the Quad-plus dialogue and broader initiatives like the Indo-Pacific Economic Framework, unveil an entrepreneurial spirit that seeks to establish new norms of regional cooperation. Sri Lanka's receptivity to such coalitions, and its own strategic partnership choices, such as the alignment with the Japanese economic model recognized in Speaker A's remarks, will indubitably impact its alignment within the region.
Implications and Forecasting
An extrapolation of these nuanced force catalysts portends diverse scenarios:
Modi's established leadership and the potential rise of a concordant leadership in Sri Lanka may herald strengthened bilateral cooperation, with regional ramifications on the engagement scale with China and other global actors.
The Indian resolve, in combination with Sri Lanka's strategic evaluations amidst economic reform and reconstruction efforts, could be critical in realigning the countries under a shared security and economic vision.
The Indian initiative, demonstrated through proactive engagements in supply chain security and digital transactions, may serve as a paradigm if mirrored by Sri Lankan policy adaptations in these sectors.
Entrepreneurial exertions by India, epitomized by its agile approach to security architecture and economic integrations, pave pathways for Sri Lanka and other regional actors to follow suit, potentially culminating in a reconstituted regional alignment.
In the final analysis, a robust application of force catalysts accounts for individual leadership tendencies, societal motivators within each state, domestic constraints, and the wider geopolitical milieu. It also acknowledges the non-static nature of international relations and integrates predictive models that reflect the fluidity of geopolitical alliances. Factoring in India's assertive economic and defense posturing, as well as Sri Lanka's strategic agency, this in-depth examination proffers a granular forecast of the complex geopolitical choreography across South Asia, underscoring the transformative potential of strategic maneuvering between these pivotal nations.
Constraints and Frictions
in India's Role in Sri Lankan Politics and Economic Stability
Considering the net assessment within the context of South Asia, particularly focusing on India's role in Sri Lankan politics and economic stability, several constraints emerge that may shape India’s ability to project influence in Sri Lanka.
Economic Constraints
India's economy, despite being one of the fastest-growing major economies global, faces constraints that could limit its strategic outreach. The constraints include the need for continued structural reforms, financial sector reforms, diversification of the economy away from a dependence on certain services and manufacturing sectors, and removal of trade barriers that hinder export-led growth. Additionally, capital allocation efficiency, sector-specific weaknesses such as the banking sector's non-performing assets, and the agricultural sector’s vulnerability to climate change could impair India's financial capacity to support foreign initiatives. There may also be budgetary constraints imposed by domestic priorities that compete for the same resources as external aid and investment programs, thus, shaping India’s diplomatic ventures.
Technological Constraints
India's digital initiatives with Sri Lanka must consider technological constraints related to infrastructure and cybersecurity. While India has made significant progress in the digital domain, it is also essential to consider the absorption capacity of Sri Lanka, including issues related to interoperability standards, cyber threat resilience, and the degree to which Sri Lanka's technological ecosystem can integrate with India's digital infrastructure without undermining its sovereignty or creating dependencies.
Military Constraints
India's commitment to maintaining a strategic presence in Sri Lanka also encounters constraints in the form of resource allocation to defence budgets, which must reconcile with domestic and broader regional security needs. India’s military modernization programs, efforts towards blue-water naval capabilities, and maritime surveillance and counterterrorism support must be calibrated against competing defense requirements along its own vast borders, particularly in light of the Indian-China border tensions.
In the realm of strategic endeavors, frictions often arise due to unforeseen variables that affect the execution of plans and the realization of objectives. The case of India-Sri Lanka relations is no different with various sources of friction that could influence outcomes.
Political Frictions
One notable friction is the grassroots-level resistance within Sri Lanka to India’s predominant role, embodied in the "India Out" campaign, which encapsulates local fears about Indian intervention in domestic matters. Such resistance has the potential to constrain India’s maneuverability, particularly as it may align with or spur Chinese counter-influence measures.
Public Sentiment and Sociocultural Frictions
The impact of internal political dynamics in India, such as sectarian divides, on its foreign relations is not straightforward. Although one could postulate that such divides may inhibit constructive engagement abroad, there are instances where sectarian tensions have not significantly influenced external relations. Yet, it would be imprudent to ignore the possibility of adverse impacts on bilateral relations if such domestic frictions escalate or are manipulated by external entities to strain ties with Sri Lanka.
Geopolitical Frictions
India’s strategic maneuvers in Sri Lanka also exist within a broader geopolitical contest, notably with China, creating frictions as each power leverages economic and military alliances. This is evidenced by fluctuations in the alignment of Sri Lankan leadership towards either India or China, contingent on the prevailing political scenery in Colombo. Quantifying this could involve measuring economic engagement indicators such as aid, investment flows, military cooperation levels, and analyzing public sentiment through opinion polls about the external powers.
Economic and Trade Frictions
Furthermore, the economic power play, including the use of investments in infrastructure as a means for influence, has led to friction when such projects do not meet the host country’s economic aspirations or engender debt sustainability concerns. This is palpable in Sri Lanka's experiences with regional powers, emphasizing the criticality of ensuring economic engagements are perceived as mutually beneficial and sustainable.
Informational Frictions
The circulation of misinformation and disinformation is an emerging friction that can disrupt cooperative efforts. Strategic communication and strong bilateral information-sharing norms are essential in mitigating the risks associated with informational frictions.
The Net Assessment of India's Role in Sri Lanka's politics and economic stability, accounting for these constraints and frictions, is instrumental in guiding the strategic paradigm. This is a dynamic process, requiring continual reassessment to integrate new developments and trends. Concerted efforts must be made to refine analytic methods to anticipate and mitigate constraints and frictions, thereby enabling strategic foresight to be as accurate and actionable as possible in this complex geopolitical environment.
Alliances and Laws
Alliances
India-Sri Lanka relations
The historical ties and the current political overtures by India, as mentioned in the ongoing engagements and potential signing of an economic technical partnership, suggest a pivot towards reinforcing bilateral cooperation. This is compounded by India's 'Neighbourhood First' policy and the Sagar initiative, which prioritize Indian Ocean regional cooperation.
Maldives-India Security Cooperation
The information about Maldives considering India as a first responder implies an alliance framework where India may expand its influence and offer security assistance, potentially at the cost of straining Maldivian ties with other powers.
China-Sri Lanka relations
With reported Chinese financial engagements such as the investment in Hambantota and Colombo Port City and the support of comprehensive strategic cooperative partnerships, alliances between China and Sri Lanka are pertinent. The potential return of China-sympathizing leaders could shift Sri Lankan alliance leanings away from India.
Quad and other minilateral groupings
The collaborative efforts involving India, such as the Quad (Australia, Japan, US, India), AUKUS (Australia, US, UK), and India-France-Australia partnership indicate a security alliance network relevant for regional stability and strategic restructuring.
BRICS
Discussions of over 40 states interested in joining BRICS, as well as its current member nations' focus on dispute resolution and economic independence, play into the broader geopolitics potentially affecting India's role in the region.
ASEAN's multilateral engagement
ASEAN's role in trade and a multilateral approach to regional conflicts, notably through agreements like RCEP and the ASEAN-European Union Free Trade Agreement, offer a context in which India's regional strategy must operate.
Laws
International laws concerning debt restructuring
With Sri Lanka facing financial crises and seeking a $2.9 billion IMF bailout, international financial laws and policies guiding debt restructuring will be crucial. This includes the G20's Common Framework, which could shape economic stability in Sri Lanka and, by extension, affect India's influence.
Domestic laws regarding security and civil liberties
The introduction of a digital online safety bill in Sri Lanka, with the potential to curtail civil liberties, can have a substantial impact on the political landscape. This impacts India's influence, as domestic stability and governance impact the ability to engage in international partnerships.
Maritime laws
Given the significance of maritime security highlighted by former foreign minister Abdulla Shahid of the Maldives and the regional focus on maritime capacity building, international maritime law and agreements are highly relevant.
Potential Shifts in Alignment
Considering these alliances and legal frameworks, potential shifts in South Asian alignment due to India's strategic maneuvers in Sri Lanka could include:
A closer India-Sri Lanka partnership could result from economic assistance and technical cooperation, shifting Sri Lanka's allegiance more towards India and away from China.
Conversely, internal opposition in the Maldives and Sri Lanka to government stances on India and possible Chinese strategic inroads, like the BRI projects, could diminish India's influence, resulting in a realignment towards China.
Enhanced regional minilateral security alignments involving India might result in a stronger deterrence against other major power incursions, thereby solidifying India's role as a security provider.
Depending on domestic political developments around the upcoming elections in South Asia, new governments may establish priorities that either align more closely with Indian objectives or diverge, seeking alternative partnerships.
Ongoing international law and policy developments related to debt restructuring and financial stability in the region could also sway smaller states between India and other prominent lenders like China based on the terms and reliefs offered.
These potential shifts would rely on the successful management of internal political, economic, and social challenges faced by South Asian countries, as well as India's ability to project soft power and provide economic and security benefits that align with neighboring countries' interests.
Information
- Individuals agreeing to terms and conditions and privacy policy by registering.
- Last month, Muizzu met with Admiral John Aquilino, US Indo-Pacific Command, focusing on strengthening the Maldivian defence force's capacity building.
- Muizzu is interested in maintaining ties with the US and Maldives received maritime security and counterterrorism equipment from Washington.
- Tensions between India-Maldives are under scrutiny but the Maldives acknowledges the need for Delhi's partnership.
- Maldives may request security help from India due to its maritime capacity needs.
- Former foreign minister of the Maldives, Abdulla Shahid, emphasizes the importance of maritime security for the island state.
- India's ‘Neighbourhood First’ policy and the Sagar initiative prioritize Indian Ocean regional cooperation.
- Opposition within Maldives to government's anti-India stance may affect internal stability which India wouldn't favor.
- Maldives opposition parties are concerned about the government's anti-India stance, calling India a long-standing ally.
- India is making efforts to be a 'first responder' and preferred regional security partner.
- Political challenges continue as neighbors choose between China and India.
- India contributes to Mal's human resource development, security, infrastructure, healthcare, disaster and humanitarian relief.
- Indian Navy described as the "preferred security partner" for capacity building in friendly maritime nations.
- High-level India-Maldives talks highlight issues over troop withdrawal following negative comments about PM Modi by Maldivian ministers.
- India-Maldives relations become strained after disparaging remarks about PM Modi.
- Modi's promotion of Lakshadweep potentially diverting tourists from the Maldives.
- Maldives-China relationship reinforces with a commitment to a comprehensive strategic cooperative partnership.
- Maldives sometimes elects China-sympathizing leaders, but India focuses on regional peace and prosperity.
- President Maithripala Sirisena of Sri Lanka did not file for reelection, Gotabaya Rajapaksa gains support.
- A record 41 aspirants for Sri Lanka's presidential election, but only 35 remain after withdrawals.
- Sajith Premadasa emerges as a strong candidate, promising a path-breaking democratic program.
- Ethnic minority discontent possibly leading to protest votes in Sri Lanka.
- India-China border tensions result in troop amassment; China seeks normalized ties.
- India's unease with China's Belt and Road Initiative, China's construction in disputed territories viewed with concern by India.
- Investigations show Sri Lanka's debt repayment issues stem from governmental borrowing decisions, not just Chinese loans.
- China invests in Hambantota and Colombo Port City in Sri Lanka though its sovereignty is questioned.
- Sri Lanka's economic crisis casts doubt on Colombo Port City's future.
- Small inter-government groupings (mini laterals) in the Indo-Pacific focus on trade, technology, and security cooperation.
- Quad-plus dialogue addresses pandemic recovery, and India engages in various cooperative groupings.
- Japan, India, and Australia work on the Resilient Supply Chains initiative to reduce dependence on China.
- France and Japan are key partners in digital economy norms and Indo-Pacific Ocean's Initiative development.
- The Indo-Pacific remains a strategic focus with expectations of leading powers contributing more actively.
- Despite differences over India's human rights record and relations with Russia, Biden and Modi agree to strengthen ties to counter China's global influence.
- The grand inauguration of a Hindu temple in India is considered a major religious and political event, with state involvement, attended by PM Modi and Chief Minister Yogi Adityanath.
To access more information about the Biden-Modi meet: [Link provided]- Lebanon's tourism sector is jeopardized, risking economic and political collapse in 2024.
- Pakistan's military has historically intervened in politics since 1947.
- Imran Khan fell out of favor with Pakistan's military, ousted by parliament, and arrested on politically motivated charges in 2022.
- Pakistan faced violence and instability post-Khan's arrest, economic struggles, and flood-related costs.
- Parliamentary elections in Pakistan are expected in February, with power anticipated to return to civilian rule from the current military caretaker government; failure to do so could lead to unrest.
- Sri Lanka's economic crisis in 2022 led to shortages of fuel, food, and medicine, with President Gotabaya Rajapaksa fleeing the country.
- President Ranil Wickremesinghe replaced Rajapaksa; economic stability is returning, but dissatisfaction with political elites remains.
- Elections due in Sri Lanka by late 2024 may see low public trust for Wickremesinghe and potential renewed protests.
- Food inflation in Sri Lanka rose from 80.1% in June to 90.9% in July, transport inflation from 128% to 143.6%.
- The government is working to ease suffering by minimizing power cuts and improving gas supply.
- Sri Lanka has a fuel rationing system via National Fuel Pass with QR codes for vehicles.
- Exports in Sri Lanka are expected to exceed imports, improving the economy's dollar liquidity.
- The state of emergency was extended in Sri Lanka, granting police and military arrest and detention powers.
- Protesters demand crisis management and general elections, vacating the main protest site but fearing activist detentions under emergency laws.
- Wickremesinghe acknowledged the call for change, emphasizing legal, peaceful protests.
- Critics view Wickremesinghe's government as an extension of the Rajapaksa regime.
- There's speculation about Gotabaya Rajapaksa returning to Sri Lanka.
- Wickremesinghe invited parliamentarians to join an all-party government to tackle crises and reforms.
- The South Asian Association for Regional Cooperation (SAARC) is without a summit for years, with confusion over the appointment of a new secretary-general.
- North Korea's Malligyong-1 satellite seen as a threat by South Korea and the US, with 28,500 US troops in South Korea.
- North Korea test-fired about 100 ballistic missiles in the past year, aiming to expand its nuclear arsenal.
- The US and South Korea may upgrade their military deterrence strategy in response.
- South Korea partially suspended a military agreement with North Korea, escalating tensions.
- Global dynamics affected by potential conflicts involving the US, China, and Russia, with Beijing and Moscow unlikely to support UN sanctions against North Korea.
- BRICS is viewed as a counter to US hegemony, with over 40 states interested in joining; 13 formally applied.
- BRICS members focus on direct bilateral relations, dispute resolution, and economic independence from the US dollar.
- Expansion of BRICS requires internal cohesion; Cuba as a potential member due to ideological alignment.
- BRICS may adopt a gradual expansion strategy via a BRICS-plus approach.
- US military presence in Southeast Asia has a stabilizing effect and is not solely an anti-China measure.
- There's potential for more pragmatic dialogues between China and ASEAN.- Central government employees received a half-day off for a temple inauguration.
- Prime Minister Modi, in a traditional golden dress, unveiled a black stone idol of deity Ram.
- Prerna Singh from Brown University remarked the event blurred the line between politics and religion in India.
- She compared the site's symbolic significance to Rome or Mecca for other religions.
- Singh stressed the temple's inauguration challenges India's constitutional secularism and equal rights doctrine.
- The event sends a message to India's Muslim minority, which faced discrimination under BJP rule.
- The judiciary's role was questioned as their judgment allowed the temple's construction.
- The site reflects India's shift towards Hindu nationalism.
- Unlike the 1992 conflict at the same location, current security measures and the subdued Muslim minority may prevent new violence.
- Violent clashes between Hindus and Muslims occurred last year in states like Haryana and Gujarat.
- For Hindus and some Buddhists in Southeast Asia, India remains a cultural and religious source.
- Ethiopia, Egypt, and Tunisia are at risk of defaulting; 18 countries' bonds yield near distressed levels.
- G20 introduced the Common Framework on Debt in late 2020 to expedite debt restructuring, but it has been ineffective.
- Common Framework's goals included "comparability of treatment" among creditors and reinforcing IMF's role in debt sustainability assessments.
- China's inconsistent participation in the Common Framework and reluctance to accept losses on its loans have become an issue.
- The framework's exclusivity to low-income countries and lack of minimum standards for debt relief weaken its impact.
- For Sri Lanka, rate cuts by the central bank aim to spur growth and manage government borrowing costs amid a financial crisis.
- Economists predict further rate cuts with interest rates potentially dropping to 10%-11% by the end of the year.
- Sri Lanka, after securing a $2.9 billion IMF bailout, aims to finalize debt restructuring by September 2023.
- The Central Bank of Sri Lanka forecasts a 2% GDP contraction in 2023 but a growth of 3.3% in 2024, more optimistic than IMF projections.
- Tourism is critical to Sri Lanka's economic recovery despite a drop from the peak of 2.4 million tourists in 2018.
- Sri Lanka's economic reforms include price-sensitive measures, state-owned enterprise reforms, and tax adjustments.
- The country aims for sustainable debt by 2027 and has commitments from India and China to restructure loans.
- Behind the Money podcast episode highlighted Sri Lanka's economic crisis spurred by poor government decisions, aggravated by the pandemic and Ukraine war.- ASEAN countries resist being caught between major power conflicts, avoiding war.
- Oh Ei Sun is a senior fellow at the Singapore Institute of International Affairs.
- Chinese Foreign Minister Wang Yi emphasizes China’s commitment to UN peacekeeping, with over 2,400 troops and police involved.
- China fulfills its promise of a stand-by peacekeeping force of 8,000 troops and 300 police officers for UN deployment.
- China's role in the UN is controversial, with influence among developing nations but Western concerns over its human rights record and control over WHO's COVID-19 origin investigation.
- China contributes most peacekeepers from Security Council permanent members and is second only to the US in funding UN operations.
- Singapore, representing ASEAN, advocates for a multilateral, rules-based system through WTO compliance.
- ASEAN focuses on multilateral trade, works towards the world's largest free-trade agreement via RCEP (involving 10 ASEAN states plus six others).
- RCEP negotiations address the lack of a China-India bilateral trade agreement.
- ASEAN avoids taking sides in superpower conflicts, emphasizing unity and centrality.
- Agreement reached to conclude the ASEAN-European Union comprehensive Air Transport Agreement and negotiate an ASEAN-European Union Free Trade Agreement by year’s end.
- US President Joe Biden to attend G20 summit, with Xi Jinping and Vladimir Putin absent.
- The G20 aims for policy coordination, facing disagreements on issues like fossil fuel phase-out.
- Analysts question potential G20 outcomes and joint declaration due to global issues such as climate change.
- The Ukraine war and lack of a joint statement may overshadow the G20 summit.
- The West and others court India for strategic reasons, despite its refusal to condemn Russia over Ukraine and buying discounted oil and gas from them.
- Modi and Macron compared in terms of strategic autonomy in international politics.
- France maintains strategic autonomy, evident through its historical moves and Macron's recent positions on the US-China conflict over Taiwan and Nato's presence in Asia.
- India's non-alignment policy, conveyed through Jaishankar's statement about India "having its own side."
- The West, seeking allies against China, shows willingness to share defense technology and make arms deals with India.
- India's position allows it to leverage relations with major powers, affecting groupings like the Quad and SCO.- Beijing has not switched allegiances from Pakistan to India due to ideological struggles and a long-standing border dispute.
- India and China compete for influence in the Global South, previously known as the non-aligned Third World.
- India's government under Modi has shown nationalistic authoritarian tendencies rather than democratic ones.
- France, unlike India, is constrained by its membership in NATO and the EU while facing the consequences of Putin's actions in Europe.
- India's cross-border electricity trade guidelines are aimed at discouraging Chinese investment in the BBIN (Bangladesh-Bhutan-India-Nepal) corridor.
- The guidelines will likely affect a tripartite power trade pact and Beijing's economic outreach to Bhutan, raising geopolitical concerns.
- During the Cold War, the US formed bilateral military alliances with Asia-Pacific countries as a security mechanism.
- US alliance system continues to be seen as foundational for regional security and stability, with ASEAN-led frameworks as supplemental.
- US engagement in Asia-Pacific aimed at national interests, with recent focus on China's rise necessitating more allied support, given US global military commitments.
- Minilateral arrangements like the Quad (Australia, Japan, US, India) and AUKUS (Australia, US, UK) reinforce US alliances, excluding China and initially drawing criticism for potentially sidelining ASEAN.
- China and Russia's "no limits" cooperation and the Russia-Ukraine conflict influence global security dynamics.
- US responded to economic challenges with China by launching the Indo-Pacific Economic Framework and maritime initiatives.
- Minilateral arrangements, including the Quad and AUKUS, alongside other security developments, raise questions about a broader security architecture forming in response to China's strategy, including its Pacific islands outreach.
- ASEAN's role in maintaining regional peace and shaping great power relations is challenged, with internal unity being a critical factor for leveraging advantages.
- Issue-based coalitions and partnerships are rapidly growing in the Indo-Pacific, such as the Resilient Supply Chains Initiative and digital economy norms development.
- Strategic coalitions like India-France-Australia, India-France-Japan, and national security talks with Maldives and Sri Lanka are part of a broader trend toward flexible, functional coalitions.
- The International Solar Alliance and Indo-Pacific Ocean's Initiative are examples of collaborative efforts with significant geopolitical dimensions.
- Sri Lanka's recent interactions with India and China demonstrate geopolitical tensions and influence in the region.
- Critiques of the Quad and proposals for regional cooperation like the Regional Comprehensive Economic Partnership highlight the complexities of security and economic strategies in Asia-Pacific.
- Emerging security partnerships and developments, such as US-funded initiatives in Indonesia, indicate a focus on regional maritime security challenges.
- Sri Lanka's debt crisis led to negotiations with private creditors, proposing a restructure plan with concessions and novel financing instruments like Macro Linked Bonds, contingent on meeting IMF-linked economic targets.
- Creditors' proposal includes a mix of regular sovereign bonds and MLBs, aiming for index eligibility and liquidity, with debt restructuring pivotal to IMF bailout terms and expected bilateral lender engagement.- Man unable to return to his village for 18 days due to lack of buses; sleeps roadside or in his tuk-tuk amid mosquito bites.
- The man is not earning and eats once a day; has a pregnant wife and a one-and-a-half-year-old son and is worried about their future.
- Michela Tindera from Financial Times hosts "Behind the Money" podcast discussing Sri Lanka's economic crisis and global implications.
- Jonathan Wheatley, who covers emerging markets, discusses Sri Lanka's gradual and rapid decline after the 2009 civil war.
- Corruption, poor government decisions in Sri Lanka, such as tax cuts when revenue was needed and banning synthetic fertilizer imports in 2019 to save $300-$400 million.
- Farmers had no fertilizer, leading to an agricultural crisis; the COVID-19 pandemic and Ukraine war severely depleted reserves.
- Essential imports like medicines, fuels, and food couldn't be financed, leading to school closures, missed meals, and protests—tourism collapsed.
- Sri Lanka's foreign debt is estimated at $51 billion, with over half owed to multilateral agencies and a significant portion to China.
- Sri Lanka defaulted on its debt in May, causing the president to flee and resign by email from Singapore.
- Default restricts a country from commercial credit markets, impacting future economic stability.
- China's potential role in Sri Lanka's debt restructuring is undetermined.
- Sri Lanka's crisis seen as a "canary in the coal mine," indicating broader issues in emerging markets.
- Countries like Zambia and Sri Lanka, which defaulted, had unique pre-existing issues, creating a systemic problem.
- Emerging market bond yields have soared, with Ukraine, El Salvador, Argentina, Pakistan, Ghana, Kenya, and Nigeria facing investor uncertainty.
- Each country's issues are specific, but a collective story emerges of economic fragility, worsened by pandemic and war challenges.
- A strengthened US dollar causes importing inflation, worsening situations in countries like Sri Lanka.
- Sri Lanka now requires a new interim government and IMF-brokered agreements amidst a complex crisis.
- The situation in Sri Lanka garners international interest due to potential impacts on global financial markets and geopolitical stability.
- The Sri Lankan presidential election scheduled for Saturday could see closer ties with China.
- Undercurrent President Sirisena, who isn't running for re-election, relations with India and the West were prioritized, with Chinese projects put on hold.
- Anger in Sri Lanka is directed at leaders for inadequate responses to the Easter bombings, killing at least 250 in April.
- Government's recent measures to boost tourism received skepticism. Public upset with leaders started before the attacks.- Several China-linked projects in Sri Lanka criticized as "white elephants," not significantly contributing to the economy.
- Notable projects include the Mattala Rajapaksa International Airport (MRIA), financed with US$191 million from China's Exim Bank, Hambantota International Port (HIP) with US$1.3 billion credit from China, and Port City Colombo (PCC), a US$1.4 billion project.
- Analysts suggest a free-trade agreement, policy changes, and joint venture involvement may improve economic benefits.
- SubCom LLC started laying a US$600-million undersea cable in February, known as SeaMeWe-6, connecting Singapore to France and spanning over 19,300km.
- The project passes through Asia, Africa, the Middle East, across three seas and the Indian Ocean, scheduled for completion in 2025, initially almost secured by Chinese company HMN Technologies.
- HMN Technologies Co Ltd, linked to Huawei, was close to winning the SeaMeWe-6 contract, offering US$500 million due to Beijing subsidies—about a third cheaper than SubCom's proposal.
- U.S. intervened to prevent HMN Tech's contract success, seen in at least six undersea cable deals in the Asia-Pacific over the past four years.
- The U.S. government used incentives and diplomatic pressure on consortium members, which included China Telecom, China Mobile, China Unicom, Microsoft Corp, and Orange SA.
- More than 400 undersea cables carry over 95% of all international internet traffic; they are vulnerable to attacks and espionage.
- Two undersea cables connecting Taiwan and its Matsu islands were cut, with suspected Chinese ships involved, amid heightened tensions between China and Taiwan.
- The United States aims to contain China's tech aspirations with measures like offering training grants to telecom companies, urging sanctions on HMN Tech, and cautioning of potential security risks with HMN Tech.
- SubCom won the SeaMeWe-6 contract after U.S. interventions, with China Telecom and China Mobile withdrawing while China Unicom remained.
- U.S.-China relations are strained, with issues including China's stance on Russia's invasion of Ukraine, the situation in Hong Kong, and the future of Taiwan; a Chinese spy balloon escalated tensions.
- The U.S. has been limiting China's technology sector's access to U.S. innovation and pushed through a bill to back U.S. semiconductor research with US$52.7 billion.
- China's foreign minister warns of inevitable "conflict and confrontation" unless U.S. policies change.
- SubCom, NEC Corporation, and Alcatel Submarine Networks were traditionally dominant in undersea cables until Huawei Marine Networks entered in 2008 and evolved into HMN Tech.
- HMN Tech increased influence with the PEACE cable but lost out on SeaMeWe-6 due to U.S. intervention.
- The SeaMeWe-6 deal involved complex negotiations with consortium members and bids that ultimately led to a preference for SubCom over HMN Tech after U.S. government lobbying and economic analysis of the risks of U.S. sanctions.- If the GFN/GDP ratio is above 4.5% in 2027, coupons will adjust downwards.
- Restructuring proposal based on IMF's debt sustainability analysis for the distressed economy.
- Proposal was sent to the IMF and the Paris Club Secretariat.
- Bondholders and government still in discussions with financial and legal advisers, free to trade the country's securities.
- Sri Lanka's former president Gotabaya Rajapaksa banned chemical fertilizer abruptly in mid-2021, creating chaos in agriculture.
- Ban led to severe economic crisis and default on $40bn foreign debt, causing a food crisis.
- Fertilizer ban reversed six months later, yet prices rose due to global increase and local shortages. Urea price went from Rs1,500 ($4.65) to Rs40,000, before being subsidized to Rs10,000 ($124).
- Farmers are experimenting with fertilizer use due to disruption in supplies.
- Organic compost factories created since 2018 by cooperatives using natural ingredients.
- Fertilizer ban motivated by foreign currency reserves rather than environmental concerns, but failed and led to Rajapaksa's resignation after mass protests.
- Monlar working with 2,000 farmers on organic farming methods, distributing seeds and training.
- Initiatives to find sustainable farming methods in Sri Lanka remain small scale.
- Fertilizer use in future is more political than economical due to employment and subsidies.
- International Institute of Finance (IIF) warns of rising global recession risks due to Russia's invasion of Ukraine, China's Covid outbreaks, and US Federal Reserve monetary policies.
- IIF forecasts de facto flatlining in world GDP in 2022 and high recession risk.
- China's zero-Covid policy expected to continue suppressing growth.
- President Xi Jinping committed to zero-Covid, claims it will stand the test of time.
- Study suggests 1.55 million deaths in China without Covid controls.
- Low vaccination rates and medical resource scarcity in China necessitate zero-Covid as "insurance" for the population.
- World Health Organization (WHO) calls China's zero-Covid strategy unsustainable.
- Economists and firms express concerns over China's strict Covid measures impacting economy and investment.
- China has introduced 2.5 trillion yuan tax cuts for small businesses, infrastructure spending, but resisted large-scale stimulus.
- Chinese developers like Sunac China Holdings facing financial stress, missed interest payments.
- Stimulus measures questionably effective due to lockdowns and Covid policies; China likely to miss 5.5% growth target.
- US-China economic relationship is crucial globally, representing over 40% of world goods and services.
- US policies aim to reduce economic reliance on China and strengthen Indo-Pacific economic ties.
- US-China trade tensions continue with export controls and trade curbs.
- Actions against foreign companies and discussion of "decoupling" the two economies have been reported.- President Sirisena's legitimacy questioned due to political crisis moves: dismissal of Wickremesinghe, dissolving parliament, economic crisis, rupee depreciation, and damaged investor confidence.
- Courts ruled potential impeachment after unconstitutional parliament dissolution; Sirisena forced to reinstate Wickremesinghe to save political career.
- Wickremesinghe's public support declined, tied to Central Bank Bond scam and perceived government corruption.
- Gotabaya, despite challenges such as dual citizenship and U.S. court cases alleging orders of murder and torture, is a key political figure.
- Uncertainty prevails regarding domestic and foreign policies of potential new Sri Lankan government.
- Risk of halting transitional justice mechanism crucial to current government's reform, which includes reparations, truth-seeking, and tracing missing family members.
- Sri Lanka historically cooperating with international institutions for reconciliation and truth post civil war; progress includes passing bills for Office on Missing Persons (OMP) and Reparations office.
- Need for strong leadership to continue investigations, strengthen intelligence, and promote interfaith dialogue, as elections approach.
- Sameer Tabreez drives daily from New Delhi's Uttam Nagar to Mehrauli, overseeing the preservation of his mother's grave after the demolition of the Akhoondji mosque.
- The mosque and Bahrul Uloom religious school destroyed on January 30; police and Development Development Authority labeled it illegal for encroaching on reservation forest.
- Priest Zakir Hussain ignored during demolition; confiscation of his phone and restriction of movement occurred.
- Outrage among Muslim community; concerns over the future of other mosques under BJP leadership.
- Prime Minister Narendra Modi's pro-Hindu agenda and discrimination against Muslims emphasized by political scientists and activists.
- Worries over cultural, constitutional integrity due to demolition of mosques and Places of Worship Act exceptions.
- The Ayodhya temple event and Supreme Court verdict on the Gyanvapi mosque create precedents, raising concerns for Muslims.
- Demolition of Akhoondji mosque poses threat to India's secular values and cultural legacy.
- In South Asia, China's influence grows as Belt and Road Initiative gains traction despite Indian and Western apprehension.
- India's cross-border trade of electricity guidelines influenced by security concerns, causing geopolitical and strategic implications.
- Analyses focus on how Belt and Road will affect smaller South Asian states and their engagement terms.
- Global manufacturing competition pushes newly-developing countries towards low-wage labor, exacerbating inequality and economic instability.
- ASEAN faces varying development challenges; urban-rural wealth gap threatens political stability.
- Risks include rural voter disillusionment and potential destabilizing political movements, muting the appeal of the ASEAN Economic Community’s integrative vision.- Imports of Chinese goods to the United States fell by 24% through September compared with the same period in 2022.
- This decline impacts other countries who are caught between the US and China in trade matters.
- The IMF warns that economic "fragmentation" harms global economy, estimating a reduction of US$7.4 trillion in global economic output due to higher trade barriers.
- In 2022, countries added nearly 3,000 new trade restrictions, a significant increase from fewer than 1,000 in 2019.
- International trade is projected to grow only 0.9% this year and 3.5% in 2024, well below the 2000 to 2019 average of 4.9%.
- The Biden administration claims it is not seeking to damage China's economy.
- Treasury Secretary Janet Yellen met with Chinese Vice Premier He Lifeng to lay the groundwork for a summit between Biden and Xi Jinping.
- China is motivated to restore economic ties with the US due to internal economic pressures, such as a collapsed real estate market, high youth unemployment, and waning consumer confidence.
- Wendy Cutler, VP of the Asia Society Policy Institute, believes it will be challenging for Xi to reassure investors about China's profitability.
- Political tensions between the US and China extend beyond economics, focusing on areas such as Hong Kong, Xinjiang, territorial demands in Asia, border clashes with India, disputes in the South China Sea, and threats to Taiwan.
- With upcoming presidential elections in Taiwan and the US, US-China relations could intensify.
- Xi's internal policies may be affecting China's global reputation negatively; a Pew Research Center survey indicates the US is viewed more favorably than China in 22 out of 24 countries surveyed.
- US Representative Raja Krishnamoorthi suggests Xi might change course, referencing Xi's abrupt end to zero-COVID policies in China.
- In India, PM Narendra Modi looks set for a third term, following BJP's victories in key state elections.
- Rahul Gandhi's two-year prison sentence for criminal defamation is seen as potentially detrimental to India's opposition Congress party, raising concerns about the misuse of legal processes for political gains.
- The Maldives President Mohamed Muizzu demands India withdraw its troops by March 15; India has 77 soldiers and 12 medical personnel stationed in the Maldives.
- Indian soldiers aid with humanitarian efforts, marine surveillance, search and rescue operations, and medical evacuations.
- The Maldives has concerns about Indian intervention in domestic politics and sovereignty, with Muizzu’s presidency marking an "India Out" campaign.
- India's ties with the Maldives have been tense after Muizzu's pro-China stance gained him the presidency, subsequently visiting China to strengthen this alliance.
- The Maldives owes China US$1.37 billion, around 20% of its public debt.
- Automation and advanced technologies are having considerable impacts on employment at every skill level in various countries.
- Populist political waves in some Western countries are partly fueled by economic grievances of displaced workers.
- Governments face the challenge of creating well-paying jobs for growing populations and technically proficient workforces.
- In India, the monthly influx of over 1 million working-age individuals requires the creation of more than 8 million jobs annually to sustain employment levels.
- A large portion of India's informal sector workforce and increasing automation could lead to joblessness despite continuous upskilling.
- Rapid urbanization and the robotics boom in manufacturing are displacing low-skilled laborers, leading to potential jobless growth.
- Indonesia recognizes China's role in its industrialization, with investments in infrastructure and the downstream industry.
- Rising decoupling sentiment and the "China factor" have restricted Indonesia's nickel products from accessing the US market.
- Indonesia is seeking investments from Western countries that are distracted by domestic and global issues, making China an opportunistic economic partner.
- Chinese investment in Indonesia is substantial, with US$3.5 billion from China and Hong Kong, just behind Singapore.
- Indonesia aims to diversify economic cooperation to manage public unease over China's economic influence.
- The Maldives clarifies that Indian troops will leave by May, with initial withdrawals starting by March 10.
- The Maldives aims to expand its base of international partners and has dealt with Turkey for military drones to lessen reliance on Indian military surveillance.- Two new investors, Telekom Malaysia Berhad and PT Telekomunikasi Indonesia International (Telin), joined a cable deal; original members increased stakes due to a shortfall.
- The US successfully pressured for the exclusion of HMT Tech from the Singapore-to-France and East Micronesia cable projects, also involving Nauru, the Federated States of Micronesia, and Kiribati.
- The United States, Australia, and Japan to jointly fund an alternative East Micronesia Cable, with progress discussions on March 8 but no set time frame.
- Concerns over subsea cable industry's reliance on diplomatic collaboration; unprecedented geopolitical influence noted by consultant Paul McCann.
- Team Telecom, set up by a Trump Executive Order and run by DOJ's National Security Division and Assistant Attorney General Matthew Olsen, aims to protect US telecommunication networks.
- Team Telecom's focus is to prevent cables from connecting the US with China or Hong Kong; has influenced cancellation of four cable projects due to espionage concerns.
- The Pacific Light Cable Network, by Google and Meta, rerouted to exclude Hong Kong. Bay to Bay Express Cable System, by Amazon, Meta, and originally China Mobile, rebranded as CAP-1 without Hong Kong connection.
- US opposition to cables terminating in Hong Kong affected Google, Meta, and Amazon, with concerns over Chinese espionage efforts.
- Chinese firm HMN Tech's share in global subsea cable development decreased from 18% to 7%.
- China delays the Southeast Asia-Japan 2 cable, citing surveillance concerns over Japan's NEC, which denies such claims.
- The US has taken steps against Chinese telecom companies such as China Telecom, citing national security threats.
- China's bailout lending increased dramatically, with $104 billion granted between 2019 and 2021; total of $240 billion since 2000 across 128 operations in 22 countries.
- China's lending, often less transparent and more expensive than the IMF's, complicates global financial stability and debt resolution efforts.
- Sri Lanka's request to China for debt restructuring follows the IMF's $3bn lending program approval.
- Belt and Road Initiative (BRI) projects criticized for debt crises and allegations of corruption, while China insists on transparency and denying political strings to loans.
- Tensions in Mali with potential for civil war, after UN peacekeepers withdrew and military seized control of Kidal, threatening the 2015 peace agreement.
- Economic and political crises in Lebanon worsen, including failed economic reforms, government vacancies, and growing tensions with Israel, risking spillover conflict involving Hezbollah.
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