By P.K. Balachandran

COLOMBO – Pakistan Prime Minister Imran Khan is to visit Sri Lanka soon. Though initially the visit was said to be de “in the coming days”, an English language weekend paper, quoting a top foreign ministry source said, “it has now been pushed back by a few weeks”.  Arrangements for the visit, however, are underway.

Imran Khan’s proposed visit is significant in the context of India and China making vigorous efforts to strengthen their ties with Sri Lanka, which has assumed strategic importance in the Indian Ocean region. Clearly, Pakistan does not want to be left out of the competition to woo Sri Lanka.

The Indian Ocean is now a theatre of conflict between India and the US on the one hand, and China on the other. Pakistan, which has a running battle with India and is an ally of China, could help reinforce Sino-Lanka ties to weaken India’s traditional hold on the island nation.

While India is moving closer to the US, Pakistan and Sri Lanka are moving away from the US and towards China and Russia. Having had friendly ties with Sri Lanka ever since independence from Britain in the late 1940s, Pakistan could contribute to the consolidation of the tripartite – China-Sri Lanka-Pakistan – axis.

Under the right wing and pro-West United National Party (UNP) and the centre left Sri Lanka Freedom Party (SLFP) government, Sri Lanka has had friendly ties with Pakistan. The reason for this consistency is that Sri Lankan governments, irrespective of the party in power, feel a sense of unease vis-à-vis India.

When the liberation war broke out in East Pakistan in 1971, and India had banned over-flights by Pakistani aircraft, the then SLFP government in Sri Lanka led by Sirimavo Bandaranaike allowed Pakistani aircraft to refuel in Colombo 174 times. India felt betrayed by this because it had sent aircraft to help Sirimavo quell a left extremist uprising against her government earlier that year.

Pakistan-Sri Lanka military ties became a critical factor in the prolonged war against the Liberation Tigers of Tamil Eelam (LTTE). In 2000, when a LTTE offensive code-named ‘Operation Ceaseless Waves’ overran Sri Lankan military positions in the North, entered Jaffna and trapped government troops, Sri Lanka had sought Multi-Barrel Rocket Launchers (MBRLs) and Pakistan airlifted them. In 2006, the LTTE tried to assassinate the Pakistan High Commissioner, Bashir Wali Mohmand.

According to a Pakistani daily, in May 2008, the then Sri Lankan Army Chief Lt Gen. Sarath Fonseka had visited Pakistan to finalize the purchase of high-tech arms, including 22 Al-Khalid Main Battle Tanks worth US $100 million.  Fonseka also gave a wish list of weaponry worth US$ 65 million, sought 250,000 rounds of 60mm, 81mm, 120mm and 130mm mortar ammunition worth US$ 25 million, and 150,000 hand grenades for immediate delivery to the Sri Lankan army within a month. The Pakistani MBRLs played a crucial role in battles.

Pakistan also accepted the visiting General’s request to send one shipload of the items needed every 10 days to bolster the Sri Lankan military efforts to take over Kilinochchi, the political headquarters of the LTTE.  Sri Lankan media reports said Pakistan Air force pilots had participated in several successful air strikes against military bases of the LTTE in August 2008. Reports claimed Pakistani military officers were stationed in Colombo to guide Sri Lankan security force.

Gen. Fonseka told an Indian TV channel after the war,  Sri Lanka turned to China and Pakistan for military hardware, only after New Delhi refused to supply weapons to it. At that time, Tamil Nadu politicians were preventing New Delhi from helping Sri Lanka militarily because of the ethnic Tamil factor.

Lack of economic content

Pakistan now trains Sri Lankan armed forces personnel and invariably supports Sri Lanka in international forums on the ethnic question but Pak-Lanka relations have failed to acquire an economic content.

The Pakistan-Sri Lanka Free Trade Agreement (PSFTA) was signed in August 2002 and came into effect in July 2005. Sri Lanka was given immediate duty-free market access to 206 products, whereas Pakistan received duty-free access to 102 products. Pakistan’s exports to Sri Lanka grew from US$ 97 million in 2004 to US$ 355 million in 2018, almost 3.6 times higher over 14 years. Similarly, Sri Lanka’s exports to Pakistan grew from US$ 47 million in 2004 to US$ 105 million in 2018, almost double over the same period. However, the two-way trade is only US$ 460 million when the potential is US$ 2.7 billion.

Since both President Gotabaya Rajapaksa and Prime Minister Imran Khan are pledged to promote FDIs, various areas of investment will be discussed. Studies have found that non-tariff barriers have smothered the impact of tariff rationalizations.  Due to a lack of awareness, exporters do not make full use of the market potential and benefits under the free trade agreement. Additionally, Sri Lankan businessmen tend to stick to the existing markets. Studies suggest that both countries need to diversify their products through research, innovation, and value addition, adjusting according to the demands of each other’s market.

Sri Lanka is keen on selling tea to Pakistan but Pakistan’s tea market is dominated by Kenyan tea. CTC (cut, tear and curl) teas are the ones with a market there. But only 10% of Sri Lankan tea is CTC. Currently, Sri Lanka’s market share is only 2 to 3%.

Although Sri Lanka produces a large quantity of orthodox tea, prices are comparatively very high. Sri Lanka exports most of its tea in value added forms while other countries export in bulk. Also value added forms of tea from other countries are offered at lower prices. This has resulted in Sri Lanka’s declining share in the Pakistani market.

Areas for investment

However, the future of Pak-Lanka economic relations is not bleak, according to  High Commissioner Muhammad Saad Khattak, who is quoted in an English language daily as saying: “Pakistani companies have invested in agriculture, Information Technology, textiles and construction /real estate development in Sri Lanka. The Sri Lankan Construction and Real Estate industry is rapidly growing and the country has an import requirement of US$ 600 million worth of cement annually from various countries. Pakistan supplies 10% – 20% of Sri Lanka’s cement requirements and has the capacity to increase its exports due to competitive pricing and good quality. This sector has a larger potential due to increased consumer spending on construction and real estate.

“Similarly, the demand for sugar in Sri Lanka is estimated to be 650 MT per annum and the country imports more than 90% of its annual sugar requirement. Sugar is one of the potential sectors where Pakistani investors can focus on in 2021.”

Because of strained relations between India and Pakistan betel leaves from India do not come to Pakistan. That place has been taken by Sri Lankan betel leaves.

Muslim burial issue

Imran Khan could raise some of the issues faced by Sri Lankan Muslims, especially, the issue of getting permission to bury the COVID-19 dead. But the tone will be low, as Pakistan avoids commenting on the internal problems of Sri Lanka. And it has always stood by the government of the day in international forums, especially in the UNHRC where Sri Lanka is pilloried for alleged war crimes.

 -P K. Balachandran is a senior Colombo-based journalist who in the past two decades, has reported for The Hindustan Times, The New Indian Express and the Economist