By Darini Rajasingham-Senanayake Courtesy Eurasia Review

There will be no honeymoon for the newly minted National People’s Power (NPP) Government that got a massive people’s mandate for debt justice.

The storm blowing from Washington DC across the Indian Ocean World—targeting China to the East, Iran to the West, and now, India at the centre—is growing and expanding. So too, the US led NATO sanctions regime is expanding and impacting many countries. These include Sri Lanka, which is caught in the crosshairs of hybrid economic war on the rise of BRICS and China’s Belt and Road Initiative.

Seemingly unable to re-negotiate International Monetary Fund (IMF), and odious debt Eurobond Exchange agreements drafted by the previous Ranil Rajapakse regime that it had accused of corruption, the new NPP government this month signed Sri Lanka up to being pumped and dumped” once again into a second staged Sovereign Default.

Sri Lanka, South Asia’s richest country by the metric that matters—Purchasing Power Parity (PPP) GDP per capita– was declared ‘bankrupt’ and in Default in March 2022 amid distracting US National Endowment for Democracy (NED) funded Araglaya protests—simply due to a purported lack of exorbitantly privileged US dollars!

While the IMF engineered Bond Exchange has got stock markets on a Christmas high with seasonal good news hype in the corporate media echo chamber with Fitch and Moody’s upgrades despite significant deflation, the pain would soon set in as Sri Lanka commenced Odious debt payments to predatory creditors in 2025 and the EPF pension funds whittle down.

A new round of social unrest and protests at high taxes and the IMF’s bitter austerity measures to shrink the economy and pay predatory International Sovereign bond holders with a fire sale of national assets are on the cards, and very likely a second staged Default curtsey the IMF’s Extended Fund Facility.

US Sanctions and Regime Change Aragalayas in South Asia

Simultaneously, shades of an increasingly hot, new regional Cold War are apparent across South Asia and the Indian Ocean world. There were two regime change operations in Pakistan and Sri Lanka in 2022 amid Victoria Nurland inspired colour revolution’ or Arab Spring Araglaya ‘protests”.

This year, 2024, saw regime change in Bangladesh and just a few weeks ago members of the ruling BJP in India accused the US of targeting Prime Minister Modi’s government for regime change. The SOROS foundation and the NED funded NGO complex were identified as part of local-global networks that were implicated in tarnishing the Modi brand.

Meanwhile, development projects that promised needed foreign investment in Sri Lanka have been thrown into disarray by the United States expanding sanctions regime on the BRICS leaders, this time on Russian firms, as well as court action against the Indian conglomerate, Adani.

Two months ago, India’s Shaurya Aeronautics Pvt Ltd and Russia’s Airports of Regions Management Company’s plans for joint development of the Chinese built Mattala International Airport in southeast Sri Lanka were put on hold due to US sanctions.[i]

The U.S. Department of the Treasury had sanctioned India-based Shaurya Aeronautics Private Limited, among 275 individuals and entities involved in supplying Russia with advanced technology and equipment. The airport near the Hambantota Port is located near some of the world’s busiest trade, energy and submarine Data Cable routes.

Meanwhile a bribery case was filed in New York last month against the Adani conglomerate, which is a partner of BlackRock, that is in turn Sri Lanka’s largest private predatory International Sovereign Bond (ISB) creditor. Although China is routinely blamed in the global corporate media echo chamber for debt trap lending, analysis of Sri Lanka’s loan profile clearly show that ISBs are the cause of the geostrategic island’s first ever Sovereign Default in March 2022.

Adani was set to develop the Western Terminal of the Colombo port in partnership with local conglomerate John Keells holdings with significant US Development Finance Corporation (DFC) funding. This was before US authorities had accused Adani of bribery in Andhra Pradesh and filed a court case in New York.

Adani, said to be Asia’s richest man is seen to be personally close to Indian Prime Minister Narendra Modi.Adani which partners with BlackRock, Sri Lanka’s biggest private creditor had already got a sweetheart deal ex-ante the Odious debt restructure Bond Exchange agreements signed this month– for various ‘green energy’ projects!

Sanctions and Visits

As sanctions bit, US Assistant Secretary of State, Donald Lu visited India, Sri Lanka and Nepal earlier this month. Lu met government, the NGO complex and other civil society members to discuss ‘capacity building’ assistance, presumably, for more institutional capture.

The Central Bank of Sri Lanka has been already effectively privatized to serve the interests of predatory ISBs rather than citizens via International Monetary Fund ‘reforms’.

US moves against Indian firms have likely given Sri Lanka Foreign Minister Vijitha Herath a big headache, much like the pending debt trap International Sovereign bond debt restructure agreements that are being forced on the new government in Colombo by the IMF and Lazard and Clifford Chance that represent ISBs that have debt trapped the county in collusion with local politicians and business cronies.

Will Mr. Herath be able to persuade Lu to hold back US sanctions and the ISB vulture funds to make an exception for debt trapped Sri Lanka, and enable the Mattala International Airport and Colombo port west terminal projects to proceed with Indian and Russian investment?

A USDFC, which had agreed to lend $500 million to Adani’s port development in Sri Lanka said it was conducting due diligence on the project.

Targeting Indian Projects and Sri Lanka’s BRICS application

Indian firms are being targeted by Washington, which has long sought access to geostrategic Sri Lanka’s energy, transport, telecom infrastructure. This was evident in the US Millennium Challenge Corporation (MCC) Compact, rejected by Sri Lanka back in 2019. At the time there were fears of the US establishing military bases under the Status of Forces Agreement (SOFA), in the geostrategic island nation.

The Colombo harbour is South Asia’s busiest port but that development is also now on hold. Of course, the US promise to fund Adani’s port development to the tune of over USD 500 million was in any case a tall order! The sum was much more than the aborted MCC project, after which the mysterious ISIS-claimed Easter Sunday hybrid war attacks targeted tourist hotels and churches, crashing economy and society. The IS-claimed attacks were clearly designed to set off a ‘cascade of violence” in the multi-religious island nation.

The Mattala International Airport in Hambantota, initially built by the Chinese was perceived to be a White Elephant’ development project but is actually located near one of the world’s busiest maritime trade, energy and submarine Date Cable routes in the world. The Indian Shaurya Aeronautics plan to develop the airport would bring needed foreign investment and showcase collaboration among the big three Asian powers- China, India and Russia but is now on ice due to US sanctions.

Sri Lanka, clearly caught in the crosshairs of big power rivalry, had formally submitted an application to join BRICS and the New Development Bank at the meeting in Kazan in October where President Putin hosted China’s President Xi and Indian Premier Modi along with other Global South leaders. The new government in Colombo would be hoping to leverage regional growth and support from the Global South in the Asian 21^stCentury”.

However, no senior Minister from Sri Lanka attended the meeting in Kazan where de-dollarization and trading in national currencies was a hot topic– an opportunity missed in deference to Washington? Sri Lanka’s application to join the New Development Bank has been accepted but the BRICS application remains pending at this time.

A New Regional Cold War?

A new Cold War is clearly ramping up across the Indian Ocean–and not just on China. Having pushed Russia and China into ever close partnership Washington seems keen to ensure that India warmly embraces its erstwhile foe – China and the BRICS.

India had defied US sanctions on Russia over the past two year and ramped up Rupee-Ruble trade and Russian oil and gas purchases, benefiting from Russia’s decoupling from Europe and the war in Ukraine, also given historically strong and deep relations with the Soviet Union during the Cold War (1945-1991).

Was India rewarded with regime change in Bangladesh for defying US Sanctions and drawing nearer its neighbouring BRICS? India was also embroiled in a Canadian Sikh spy murder mystery with Woke Diaspora identity political overtones also emanating from Washington.

More concerning for India and indeed the South Asia region as a whole is the latest regime change operation with the obligatory student protests directed via social media right under India’s nose in neighbouring Bangladesh, and the weaponization of Hindu-Muslim-Buddhist regional religious identity politics that has followed.

Departing President Joe Biden seems to have run out of patience with India. The G-20 afterglow in Delhi now seems like a prelude to the parting of ways between India and the West, as Delhi appears to pivot to BRICS. Or perhaps it’s just Biden’s farewell to South Asia and the world, which increasingly seems like: ‘Apres moi le deluge!’

Debt Neocolonialism as a new Cold War takes Shape in South Asia

Will Sri Lanka caught in the IMF’s neocolonial debt and Eurobond bailout business be able to withstand US pressures as India has and turn its back on Indian and Russian investments?

Will Colombo be asked to choose between Washington and New Delhi again? During the previous Cold War, Delhi armed and trained the Liberation Tigers (LTTE), against any possible US bases in its backyard as Colombo moved close to Washington under J.R. Jayawardena. This ensured that Sri Lanka’s so-called internal ethnic conflict’ which was really a regional Cold War proxy war, with India closely allied with the Soviet Union, would run for 30 years.

Geostrategic Sri Lanka’s ports and airports at the center of the Indian Ocean and a choke point of Submarine Data Cables are again of great interest to Washington’s neocons and the NATO war machine, which now aspires to Full Spectrum Dominance (FSD)–over earth, air, sea and Cyber operations.

The targeting of energy and electricity systems as well as transport and telecom infrastructure in the South Asia region– from MCC in Nepal in the north to IMF’s privatization push in Sri Lanka in the south may have much to do with the rush to setup Data Centers, as well as, control over trade and energy choke points as a new Cold War ramps up.

Cold War Redux: Regime Change and Debt Neocolonialism

Back in 2022 the Pakistan premier Imran Khan accused Donald Lu of running a regime change operation against him. Simultaneously, a soft regime change operation unfolded in Sri Lanka with the US National Endowment for Democracy (NED) funded and social media remote platforms directed Aragalaya ‘protests’. This was shortly after Victoria Nurland had visited Colombo.

The 2022 regime change in Colombo was masked, Arab Spring/ colour revolution style, with people’s protests against a no doubt unpopular regime, to ensure that Sri Lanka staged a smooth Sovereign Default into the waiting arms of the lender of last resorts- the International Monetary Fund (IMF). The new Washington backed President Ranil Wickramasinghe was installed to stage the default and deepen the Eurobond debt trap ex-poste.

Two years later, Imran Khan for his impudence in naming Donald Lu as the instigator of regime change in Pakistan in 2022 languishes in prison in Islamabad amid huge protests. Fate has been slightly kinder to Sri Lanka’s erstwhile president Gotabaya Rajapakse who was also ousted in the soft Aragalaya coup in 2022.

Rajapakse remains a free man albeit an ex-American citizen barred from travel to the US.  He was dispatched and humiliated amid the Woke Aragalaya protests directed via remote controlled social media platforms that rocked Colombo, after the dreaded Victoria Nurland’s visit in early 2022 to triggered the regime change. Nurland is widely credited with the Ukraine Maidan Square colour revolutions that enabled the rise of Zelinski to precipitate war with Russia.

Thus, South Asia’s only Upper Middle Income County (MIC) was declared bankrupt overnight and forced to stage a first ever Sovereign Default. This was as Lawfare unfolded once again in a New York Court when the shadowy, off-shore Hamilton Reserve Bank filed a case against Sri Lanka in 2022 for non-payment of a small amount of interest.

The HRB Lawfare triggered rapid local Rupee currency depreciation against the exorbitantly privileged US dollar in tandem with rating agency downgrades.

A quiet parting of Ways? Weaponizing Diaspora Identity Politics

Regime change operations in Colombo and Islamabad in early 2022 notwithstanding, India, the South Asian regional hegemon, now grapples with yet another US instigated regime change operation right under her nose – this time in Dhaka, Bangladesh. Deposed secular Prime Minister, Sheikh Hasina had sought refuge in Delhi given historic ties but religion/s have been again weaponized in Bangladesh.

Of course, the weaponiztion of religion/s, particularly, Buddhism and Islam, in South and South East Asia was a Cold War project to destabilize the region and counter God-less Communist and Socialist de-colonization, national liberation and independence movements in Asia. Yale University historian Eugene Ford’s book Cold War Monks: Buddhism and America’s Secret Strategy in Asia” is especially enlightening in this regard.

Is a quiet parting of ways unfolding at this time with India’s Adani and various BRICS partnerships being targeted by Washington? The side show with Canada and India expelling diplomats, may well be a distraction from the far more serious issue of regime change in Bangladesh and its regional implications: Religious minorities (Hindus, Buddhists and Christians), are now under threat from the same Saudi-funded Islamist Cat’s paw and handmaiden that the CIA with partner in crime Israel’s Mossad deploys around the world to destabilize countries and regions. Call it the ISIS, ISIL, Al Qaida, the Muslim Brotherhood, rebranded HTS in Syria or ISIS-K in Afghanistan, or whatever.

The recent regime change operation, weaponizing transnational networks and religious identity politics in Bangladesh that saw the ouster of Prime Minister Hasina a close ally of Delhi certainly put a spanner in the works in the West’s wooing of mother India– with the Indian Diaspora in the west in tow: From Rishi Sunak to Kamala Harris who embodied the I-2 (Israel-India) partnership given her Indian name and Jewish husband, to all those Indian Diaspora CEOs of big US and EU corporations, it is increasingly clear that the Indian Diaspora in the Euro-American world and Australia had been weaponized and mobilized for the charm offensive to persuade India to fight a proxy war on China and crash the Asian 21^st Century. That kite did not fly.

The I2U2, or West Asia QUAD, comprising Israel, India, UAE and US, was designed to help ‘normalize’ Israel’s occupation of Palestine via the Abraham Accords, and the current genocide in Gaza. But the U2- UAE and US part may be fraying at this time.

ISUS was also set up to cement the I-2 (India-Israel) alliance brokered as part of Washington’s Judeo-Christian-Hindu fundamentalist outreach via I2U2 (India, Israel, UAE, US), with the Islamist Cat’s paw to destabilize South Asia – old Cold War style when there was a proliferation of regional security groupings like SEATO. The new twist is the Indian Diaspora in the West.

Will developments before and during the BRICS summit in Kazan where China and India made relative peace, and the regime change in Bangladesh break the I2U2 partnership, or at least the I2, India-Israel part?

As winds of change blow in Washington come January when Donald Trump would be ensconced President of the United States, Donald Lu would be perhaps saying a fond farewell to South Asia on this trip to the region.

• Dr Darini Rajasingham-Senanayake is a social and medical anthropologist with expertise in international development and political-economic analysis. She was a member of the International Steering Group of the North-South Institute project: Southern Perspectives on Reform of the International Aid Architecture”.

[i] https://economynext.com/us-sanctions-indian-firm-involved-in-deal-with-sri-lankas-mattala-airport-186347/