Aid as power

Originally published in Tribe, November '09

Once a darling of international aid donorship, Sri Lanka now finds itself short of wealthy friends. Its waning popularity is a result of unscrupulous conduct: both in the in the final months of the civil war, decisively won last May, and the burgeoning rehabilitation of the island’s north-east, formerly under the sway of the Liberation Tigers of Tamil Eelam (LTTE) a.k.a. the Tamil Tigers. Most newsworthy among the misdeeds was the gratuitous and indiscriminate shelling of remaining ‘Tiger strongholds’ – home to some 30, 000 Tamil civilians – which began in earnest on the night of 17 May. And then there’s the continuing matter of the displaced Tamils, a good 250, 000 of whom remain interned (unlawfully) in military-run camps, unable to return to their (largely non-existent) homes – although nearly 6, 000 were released on 22 October, with 40, 000 to be resettled in the coming few weeks. But demilitarisation has yet to even begin; in fact, chief of defence staff General Sarath Fonseka has announced an increase in the armed forces by 50 percent, to a towering 300, 000 men, of what is already the largest army per capita in Asia. And so, for fear that it hasn’t properly ‘learnt its lessons’, the Democratic Socialist Republic of Sri Lanka has been subjected to mounting censure by the nominally principled countries of the West.

For a nation dependent since birth on aid and loans from Europe and America – its long relationship with the International Monetary Fund (IMF) began in 1950 – the consequences of such misbehaviour have already moved beyond stern scolding. In the EU, for instance, the second biggest export market for Sri Lanka after the US, there has been talk of rescinding the current duty free access for Sri Lankan goods – largely comprised of cheap readymade clothes – due to poor implementation of core international human rights and labour treaties and conventions. This would sorely wound the export-focused clothes industry, already reeling in the financial crisis, with dozens of factories closed in the last couple years alone.

And so, thirsty as ever for cash in the era of post-war reconstruction, and faced with a drawback in Western aid, Sri Lanka has sought to diversify its aid relationships towards rising Asian players such as China, India and Iran. This has been accompanied by new bilateral relationships, tilted heavily in favour of the donor. For instance, India’s financial help has been rewarded through securing Indian state investment for two thermal power plants near Tincomalee. But, helpfully, these Asian donors show far less interest in human rights and transparency. In the words of Sri Lanka’s permanent representative to the United Nations, Palitha Kohona, ‘Asians don’t go around teaching each other how to behave’. Furthermore, a flip to Asian big-money fits nicely with anti-imperialist (i.e. anti-Western) rhetoric, a defining component of Sinhalese nationalism – now more deafening than ever in the wake of the comprehensive annihilation of Tiger militarism.

But Sri Lanka’s new Asian friends have provided more than just cash and expensive weaponry; they have also done their bit to iron out humanitarian gripes – namely, in exerting the necessary pressure to pass the resolution on Sri Lanka at the UN Human Rights Council on 27 May. This exonerated the regime for its conduct in the war, blamed the civilian casualties entirely on the LTTE, and ruled against any monitoring mechanism to keep the government in line with humanitarian norms. And sanction from Asian nations was crucial to the eventual granting, on 24 July, of the USD 2.6 billion loan from the IMF; the UK, France, Germany and Argentina abstained from support.

That Sri Lanka – or indeed any third world nation – could find a financial lifeline outside of the West would have been implausible even a decade ago. But that it can now readily turn to the likes of China and India raises disquieting questions about the twilight of Euro-American world dominance. The World Bank and the IMF can no longer lord it over the developing world with their structural adjustment programmes, when Asian alternatives exist that demand no such obligations. The ‘moral’ leadership of the West, justified or otherwise, is beginning to lose its currency. The sea-saw is tipping eastwards.