China has conveyed to Sri Lanka that it will donate one million metric tonnes of rice as all signs indicate the island country is heading towards a possible food shortage. The country’s overnight switch to organic farming last year— and subsequent shortage of fertilizer— has drastically reduced domestic production by as much as 20 percent.

Finance Minister Basit Rajapaksa, one of the most powerful ministers in the government, has informed the Cabinet that the Chinese Ambassador to Sri Lanka Qi Zhenhong had informed the government that Beijing will provide 1 million metric tonnes of rice free of cost to Sri Lanka.

Crisis-ridden Sri Lanka has been looking for emergency assistance from both of its closest allies, India and China, and taking full advantage of their competing strategic interests in the country. With historic low foreign exchange reserves and mounting external debt, the government has been struggling to pay import bills even for essential imports like fuel, food, and medicine.

Beijing announced assistance weeks after Chinese Foreign Minister Wang Yi visited the country, and had assured of “all possible assistance.” Significantly, Sri Lankan President Goatabaya Rajapksa had also urged him for restructuring loans as a possible means of “significant” assistance. However, no such measure has been announced yet.

Interestingly, in recent weeks, India, Sri Lanka’s closest ally, has announced a slew of measures to help the embattled Sri Lankan economy. In December, when Basit Rajapaksa visited New Delhi, India had assured him that India would take care of Colombo’s energy and food supplies.

The swiftness with which New Delhi responded to the crisis in Sri Lanka—by announcing credit lines and facilities worth over $2.4 billion and assuring critical supplies—implied that two South Asian countries have doubled their efforts to reaffirm their close ties, which had come under strain due to growing Chinese footprints in Colombo. [ Read More]

Furthermore, a few experts suggested that Beijing is reluctant to announce debt relief —which Colombo has been seeking desperately—as then it would be faced with similar concession requests from other distressed economies of developing countries.

However, New Delhi’s response to the crisis in Sri Lanka, as a few experts argued, could also be driven by its fear that in the absence of significant assistance, Sri Lanka might be forced to cede more strategic space to China, a challenge New Delhi has been fighting for over a decade now.

(SAM)