By Arif Rafiq Courtesy Globely News

President Joe Biden congratulated President Dissanayake on taking office, reflecting Sri Lanka’s strategic importance in the competition between the U.S. and China.

President Joe Biden took to X, formerly known as Twitter, on Thursday to congratulate Sri Lanka’s new president Anura Kumara Dissanayake on his election to office.

Sri Lanka is a small island country with a population of 22 million. But it is very much at the center of the U.S.-China rivalry geographically and otherwise.

Why Sri Lanka Matters

Located in the northern Indian Ocean, Sri Lanka sits along a major maritime shipping route between Asia, the Middle East, and Europe. Due to its depth, location, and efficiency, Sri Lanka’s port of Colombo is a transshipment hub. Goods are offloaded from smaller ships from feeder ports and loaded onto larger ones destined for megaports like Dubai — and vice versa.

Sri Lanka is home to several Chinese-operated ports. One of those, located in the southern city of Hambantota, is seen as a white elephant. A vanity project pushed by a previous Sri Lankan president, it’s used as an example of China’s alleged debt-trap diplomacy.”

China’s detractors claim that it drowns developing countries in debt to gain strategic concessions, like basing rights, in exchange for debt forgiveness or restructuring.

Chinese-operated Sri Lankan ports in Colombo and Hambantota have long been rumored as potential sites for future People’s Liberation Army Navy bases.

Sri Lanka remains in economic distress after its default in 2022, which sent inflation through the roof and forced the resignation of its president. Reckless borrowing from China is part of that picture, but private bondholders are Sri Lanka’s largest creditors.

U.S. Aims in Sri Lanka

The United States wants to wean Sri Lanka off its dependence on China — and not just because of its strategic location. Washington seeks to demonstrate that it can be a better development partner for countries like Sri Lanka. It’s partnering with like-minded countries through initiatives such as the Partnership for Global Infrastructure and Investment (PGII) to offer what it says is a more transparent, less extractive, and non-corrupt alternative to China’s Belt and Road Initiative.

There are numerous problems with the China debt-trap narrative. For starters, it’s simplistic. China does indeed employ its financial largesse with dependent countries, but both as a carrot and a stick. Its approach isn’t always coherent. And the debt trap goes both ways. Chinese development banks are saddled with bad loans. Arrears are mounting. They’re not getting paid.

Secondly, China is not unique in using its pursestrings as geopolitical leverage. India too has done the same in countries like Sri Lanka. The U.S. is sullying its own reputation by partnering with the corrupt Indian conglomerate the Adani Group in Sri Lanka. Washington is financing the construction of an Adani container terminal in the Colombo port. That project is controversial for a number of reasons.

Biden’s very public show of support for Dissanayake is a smart move. The new Sri Lankan president is a leftist leader who some fear will tilt his country back to China. In all likelihood, he’ll seek some sort of balance between the great powers, focusing on economic reform and stability at home. Biden is demonstrating U.S. intent to partner with Dissanayake. Biden and his successor will have to walk the walk.