Can Sri Lankas new government break free

from China?

Construction at Chinas biggest Sri Lankan real estate project, the massive Port City site, has been halted. The
$1.4 billion Port City project was stopped not long after Sri Lankan President Maithripala Sirisena took office in
January. (Paula Bronstein/Paula Bronstein/ Washington Post)

By Annie Gowen August 16

COLOMBO, Sri Lanka In the past seven months, Sri Lankas new president,
Maithripala Sirisena, has tried to steer the island nation back to the path of good
governance and reverse the excesses of his predecessor, Mahinda Rajapaksa.
He has grounded the air-conditioned buses the former presidents family used for
cross-country joy rides. Luxury government cars driven by cronies have been
reclaimed. Work has stopped on a building in the former presidential compound meant
for Rajapaksas voluminous security detail.

Sirisenas government has pressed for and won a constitutional amendment to curtail
the wide powers of the presidency and begun to reduce the military presence in the
war-torn north and east. And the government has moved to rebalance the countrys
foreign policy away from Rajapaksas closest ally, China, toward India and the West,
putting a massive Chinese Port City and other projects on hold and examining
millions of dollars in pricey Chinese loans.
But these reforms now hang in the balance as the former president who has been
accused with his family of socking away $18 billion of the countrys money in overseas
accounts has retaken the national stage.
He is vying for a seat in Parliament in Mondays elections with an eye to becoming
prime minister, although Sirisena told him in a letter this week that he would not
appoint him even if Rajapaksas coalition wins a majority of votes.
If the current governing coalition prevails Monday and Rajapaksa is elected to
Parliament as an opposition leader, his official re-emergence will complicate Sri
Lankas ongoing recovery from a debilitating three-decade civil war and its efforts to
move out of Chinas shadow, analysts say.
Rajapaksa is unwilling to step aside, said Jehan Perera, the executive director of the
National Peace Council of Sri Lanka. He has too much to lose.
The money trail
Most days, the bombastic Rajapaksa still dons his trademark earth-red neck scarf a
tribute to his farming family and his lucky elephant hair bracelet and meets dozens
of supplicants in his office in a temple complex in Colombo, Sri Lankas capital city.
He has
been
out of
power
since

Former president Mahinda Rajapaksa attends an

event in Colombo, the Sri Lankan capital. (Paula
Bronstein/The Washington Post)

President Maithripala Sirisena, second from left,

in glasses, attends an event in Colombo. (Paula
Bronstein/The Washington Post)

January, when Sirisena, who was health minister for more than four years in
Rajapaksas government, pulled off an upstart campaign victory by appealing to a

range of voters that included both majority Sinhalese as well as minority Tamils and
Muslims many who were tired of Rajapaksas cronyism and the countrys flagging
economy.
Nevertheless, Rajapaksa, who was first elected to office in 2005, remains widely
popular with many in the Sinhala majority who credit him with ending the civil war with
a Tamil insurgency that lasted 30 years. The Tamils were seeking a separate
homeland. The bloody conflict left more than 80,000 dead, including approximately
40,000 civilians in the waning days of the conflict; a report examining alleged wartime
atrocities is due from the U.N. High Commissioner for Human Rights in late
September.
At a recent appearance by Rajapaksa on a humid summer night outside Colombo,
hundreds of his supporters crowded into a tent lit by tiny white lights to cheer their war
hero, who was flanked by members of his political party.
We were able to bring back genuine peace to the country from an era of war, when
there were bombs going off in the roads, Rajapaksa said, trumpeting his record on
national security. Taking a swipe at the current government, he added, Today we have
suspicions that the military camps in the North are being removed.

Co

nstruction at Chinas biggest Sri Lankan real estate project, the massive
Port City site, has been halted. The $1.4 billion Port City project was
stopped not long after Sri Lankan President Maithripala Sirisena took office
in January. (Paula Bronstein/The Washington Post)

Rajapaksa turned to China for financial help early in his first tenure, seeking millions of
dollars in loans for wartime spending, then millions more during the rebuilding phase
after the war ended in 2009, an estimated total of $5 billion borrowed.
Sirisenas new government is trying to unravel the costs and terms of those loans after
years without transparency, according to Anushka Wijesinha, a Sri Lankan economist
who has written widely on the Sri Lankan-China relationship.
We dont know what the cost of these projects really was, Wijesinha said. Were just
getting our mind around it. We dont really know what went on with the public
finances.
Among them are several highway projects and a $103 million cellphone tower shaped
like a lotus flower. Also under scrutiny are the finances of a $209 million airport in
Rajapaksas region of Hambantota, sitting virtually inactive although government
officials are thinking of using it as a place to store rice and a $580 million southern
port that has failed to reach revenue targets.
They built bridges where there were not rivers. ... Thats the type of corruption that
went on, Ravi Karunanayake, the countrys finance minister, told CNN this year.
Rajapaksas supporters have denied these charges, and they and the Chinese
government said that the loans were not exorbitant.
We were able to get loans and other assistance for our development projects from
China because of our relationship, said Ranjith Siyambalapitiya, who was
Rajapaksas top lieutenant at the finance ministry. In the last six months, the
government has damaged that relationship with China. It has moved away from China
and moved closer to the West. The result is that our economic growth has slowed
down.
Aiming to restart projects
The geopolitical stakes in Mondays elections are high whether Sirisena can
maintain his fragile governing coalition and keep it on the path to change or whether
China will again have the upper hand with the strategically important island that figures
into its maritime Silk Road expansion strategyinto the Indian Ocean.
Sri Lankan voters will effectively decide whether their country should kowtow to
Chinas regional ambitions or shape its own destiny by promoting an independent
foreign policy and an open economy, New Delhi-based strategic analyst Brahma
Chellaney wrote in a recent opinion piece titled Sri Lankas Chinese Election.

The Lotus Flower cellphone tower being built by a Chinese construction

company. (Paula Bronstein/The Washington Post)
Siyambalapitiya said that if his coalition achieves a majority in Mondays elections, it
plans to restart all the Chinese-funded projects put on hold by the Sirisenas
government, including the $1.4 billion Port City project planned for Colombo and built
by a state-owned Chinese construction company. The project is a reclamation of 575
acres of seabed that is intended eventually to be the site of homes for more than
60,000 people, luxury hotels, office buildings, and an amusement park and a hospital.
The project is so vast that, once completed, it will block most of the sweeping sea view
from Sirisenas office in the Presidential Secretariat, the old colonial building just off
Colombos beachfront promenade.
The project remains on hold because of concerns about its environmental impact and
permitting, although Sirisenas government appears in recent days to be softening its
stance on the shutdown.
Because of the size and scope of the deal, it will be difficult for the Sri Lankans to
extricate themselves from it, analysts say. Construction of the land bank is 13 percent
complete, according to the Chinese state-owned construction company.
We are not against China, but we have been analyzing and reevaluating all the
projects so that Sri Lanka gets the best deal, said Rajitha Senaratne, a government
spokesman. He said the government will not favor one nation over the other.

Amantha Perera in Colombo and Liu Liu in Beijing contributed to this report.
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