Sri Lanka’s prime minister has told that nation’s parliament that the national economy has, for all intent and purposes, collapsed. Ranil Wickremesinghe informed lawmakers that Sri Lanka is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.” Wickremesinghe’s remarks did not bring any new developments to light. In fact, the rather new prime minister’s words seem intended to remind lawmakers and his critics that the task of rebuilding Sri Lanka’s economic foundation will take time and much effort. After being in power for roughly one month, opposition party politicians are attempting to lay blame for the economic collapse upon Wickremesinghe’s shoulders. As the nation slides deeper into economic malaise, the politicians are attempting to cover their own backsides and assess blame upon others.
The collapse of the national economy came about at least partly due to a perfect storm of circumstances. Heavy debt, loss of tourism revenue, a foreign currency crisis and other pandemic-related impacts, as well as the soaring costs of commodities are the main ingredients of Sri Lanka’s economic nightmare. The nation is no longer able to buy imported fuel, even for cash, due to the heavy debt owed by Ceylon Petroleum Corporation. There are no nation-states or supranational bodies willing to provide fuel, creating significant fuel shortages.
The Sri Lankan government plans to call India, China and Japan to a donor conference in early August in an attempt to increase foreign financial assistance. An interim budget will be presented around the same time. This is hoped to help Sri Lanka’s position in negotiations with the IMF. August will be when geopolitics takes on a broader and more significant position in Sri Lanka’s economic crisis. India and Japan will seek to raise their influence with Colombo while simultaneously reducing China’s influence. India and Japan, as Quad members, have political and military incentive to work together and push back China’s inroads in Sri Lanka. Beijing is attempting to move deeper into the Indian Ocean and establish basing rights for Chinese warships in an area historically regarded as the Indian sphere of influence.
Joe Biden’s first trip to Asia as president was positively gushed over by many in the media. Foreign policy and political pundits attached to left-leaning publications and news channels applauded Biden for adopting a strong position against China during his trip. While in Tokyo, Biden rolled out the framework for the Indo-Pacific Economic Framework (IPEF), a trade pact the administration is hoping will serve as a counter to China’s growing economic power and influence in the Indo-Pacific region. On this past Monday, Biden stated the United States will defend Taiwan militarily in the event of a Chinese invasion. Strong, confident words and proposed action by the leader of the free world.
Unfortunately, some factors were left out of Biden’s calculations. To no one’s surprise, most left-wing and/or mainstream journalists failed to make mention of this. On the economic side, Taiwan has not received an invitation to join the IPEF despite demonstrating high interest in becoming a member. Militarily, despite Biden’s promise and sentiment, the United States does not have a concrete war plan centered on countering a Chinese invasion of Taiwan. Sure, Indo-Pacific Command has dozens of contingency plans and hypotheticals available to work from, as do the individual services. So, Biden has promised to defend Taiwan with American blood even though the military has no realistic plan for this at the present time. Then we have the administration deliberately keeping Taiwan away from IPEF membership because bringing Taipei aboard will be viewed as provocative and controversial by Beijing.
Not surprisingly, China is less than thrilled by the US following IPEF and Biden’s Taiwan comments. On Tuesday, as leaders of the Quad nations met in Tokyo, Chinese and Russian bombers flew in close proximity to Japanese airspace. Chinese officials were vocal in denouncing IPEF while China’s state-run media claim the pact is ‘economic NATO.’ Xi Jinping will likely limit his country’s response to verbal outrage and a handful of snap air and sea exercises. Quite honestly, China has more pressing problems to worry about closer to home right now.
In time, China will get around to adopting an effective counter to IPEF and Biden’s newfound military confidence. Then the competition for supremacy in Asia will officially begin.
Sri Lanka is girding for potential shortages of food products and fuel in the near future. Citizens have been lining up for cooking gas, automobile fuel since Friday. As the government attempts to stave off complete economic meltdown, the nation has defaulted on debt for the first time in its history. So, much to the chagrin of Sri Lanka’s leaders, the economic outlook remains bleak as the government lifts the state of emergency decree that has been in place since early May. The state of emergency went into effect as a result of violent street protests and riots in Colombo and across the country in late April and early May. The root cause of the unrest was spiraling inflation and other factors of the nation’s economic crisis.
India and Japan will provide emergency relief to the island-nation in a bid to stave off a complete collapse. The first ship laden with food and other material will depart from India on Wednesday. Japan will provide an emergency grant for $3 million worth of medicine and food. These moves also have geopolitical purpose as both nations would prefer to keep Chinese involvement in the Sri Lankan crisis at bay. Tokyo and New Delhi are wary about offering an opening for China to expand its presence and influence in the Indian Ocean region.
With US President Joe Biden heading to Asia today, the focus of the US government will pivot away from the war in Ukraine and Europe for the first time in months. Even though the pivot will be temporary, Biden’s trip to Japan and then South Korea will reveal a glimpse or two at future US economic and security policies and postures in the Western Pacific. As expected, even though Biden’s trip will take him to Japan and South Korea, two staunch US allies, this visit is all about North Korea and China.
Tensions in the region are evident at first glance. China is contending with issues close to home stemming from the latest COVID-19 outbreak on the mainland, redoubled efforts to replenish strategic oil reserves and of course, Taiwan. Then there is North Korea, dealing with its first official outbreak of COVID-19 since the pandemic began, as well as preparing for either a ballistic missile or underground nuclear test in the near future. Washington’s preoccupation with Ukraine and Russia has delayed the Biden administration’s intentions to refocus on Asia this year.
The Ukraine crisis and subsequent war is raising concerns about the ability of the United States to handle simultaneous crises in different parts of the world diplomatically and politically. China’s designs on Taiwan are at the core of these concerns. One of Biden’s primary goals for this trip will be to address the worries of allies and non-aligned regions in the region and demonstrate how solid US security commitments in the region are. The president also needs to address why his administration has failed to apply an economic component to US Indo-Pacific strategy. During this trip, Biden is expected to present the Indo-Pacific Economic Framework as an answer to the economic questions.
Slipping away from Ukraine for a brief spell, North Korea’s latest missile test is raising concerns across the world. The US, South Korea and Japan have all condemned what looks to be the test of an ICBM (Intercontinental Ballistic Missile) by the North on Thursday, its first ICBM test since 2017. The test was far from unexpected. US officials have been warning for weeks now that an ICBM test was probable in the ‘near future.’ The missile flew for 71 minutes, traveled a distance of 671 miles, and reached a maximum altitude of 3,852 miles. It landed 100 miles off the coast of Japan, prompting Japanese Prime Minister Fumio Kishida to label the launch as ‘reckless’ and ‘unacceptable.’
This missile, officially named the Hwasong-17, has upgraded capabilities over its predecessor, with the ability to reach the United States and carry multiple-independently targeted re-entry vehicles. In other words, more than a single warhead. It is more of a threat to the United States than Western Pacific nations, yet this has not deterred South Korea from staging its own demonstration in response to Pyongyang’s launch, firing its own ballistic and cruise missiles and dropping guided bombs, in order to “demonstrate the determination and capability to immediately respond and punish” North Korea.