Dilrook Kannangara

Sri Lanka is in a NATO debt trap. Over 50% of Sri Lanka’s external debt was raised in the US and European NATO nations. Another 12% is held by another key US military ally in Asia. Altogether they hold over 62% of Sri Lanka’s external debt. Having trapped Sri Lanka into a perpetual debt trap, NATO is now pushing Colombo to accept their military arrangements. Succumbing to this pressure will have catastrophic consequences for the island nation as it will be targeted by other superpowers in the new multipolar world order.

Since clearing the island of terrorists in 2009 NATO led by USA made many attempts to establish a military presence in the island to counter and disrupt China. They failed to materialize as successive governments were reluctant to swing in the direction of one superpower given Sri Lanka’s strong non-aligned foreign policy for decades. War crimes allegations and human rights-driven constant harassment failed to cow down Colombo. MCC pact also failed to materialize as terrorism again engulfed Sri Lanka in 2019. COVID-19 pandemic temporarily halted US military moves in Asia. But NATO is back in action in Asia.

Unable to repay foreign loans, Sri Lanka has reached out to the IMF for a bail-out package. $2.9 billion over 4 years is a meagre sum of assistance given the enormity of the challenge which adds up to over $50 billion. Even the annual interest component is higher than the total IMF grant over 4 years. Sri Lanka will be compelled to accept a NATO military design to manage the 62% foreign debt owed to NATO and allies. US troops, particularly its naval units, will land in the island under various pretexts and engage in anti-China maneuvers.

These moves push Sri Lanka once again into the ring of geopolitical rivalries which will be played out, rather battled out, in the island with disastrous outcomes. The strategic location failed to provide sufficient economic benefits as expected but challenges that come with it never fail to deliver. Unless this delicate issue is handled decisively and fearlessly, the island nation is once again headed to a dark era. Given local ethnic rivalries and political rivalries, there is little hope of surviving the latest threat.