Factum Perspective: Will Sri Lanka slip up over Russian oil?

July 24, 2022 at 1:10 AM

Factum Perspective: Will Sri Lanka slip up over Russian oil?

By Lasanda Kurukulasuriya

Sri Lanka’s outgoing president* Gotabaya Rajapaksa, in one of his last acts as head of state took a long-delayed step of talking to his Russian counterpart President Vladimir Putin on the phone, to request desperately needed fuel supplies on credit. According to a post on his Twitter account on Wednesday (6) he said he “requested an offer of credit support to import fuel to #lka in defeating the current econ challenges.”

A fuel crisis of this magnitude has never before been experienced in Sri Lanka. Some have died waiting for days in kilometres-long fuel queues. At this time of dire need, the government’s pussyfooting over seeking assistance from Russia is a puzzle that invites speculation. The two states enjoy cordial diplomatic relations, and the Russian Federation, a permanent member of the UN Security Council, extends vital support to Sri Lanka in international fora. Given the circumstances, buying low-cost fuel from Russia need not be interpreted as a rebuff to Sri Lanka’s Western friends. Sri Lanka claims to follow a neutral foreign policy, describing itself as being ‘friends with all and enemy of none.’ Presumably this neutrality is the basis on which Sri Lanka, along with India, Pakistan and dozens of others, abstained from voting on two UN General Assembly resolutions condemning Russia’s military operations in Ukraine.

The Kremlin’s statement on the phone call initiated by the Sri Lankan side drew attention to the longstanding relationship between the two states. “In the context of the 65th anniversary of establishing diplomatic relations between the two countries marked this year, the mutual disposition to further progressive development of traditionally friendly Russian-Sri Lankan ties was confirmed” the statement said. Though the subject of fuel supplies was not specifically mentioned, the Russian statement said “The presidents discussed current matters of bilateral trade and economic cooperation, in particular, in energy, agriculture and transport.”

Taking sides

Western corporate media’s sustained narrative demonizing Russia in this conflict has eclipsed the fact that much of Africa, Asia and Latin America have preferred not to take sides in the US-Russia proxy war in Ukraine. “The world community steers clear of taking sides between the US and Russia” says political analyst and former Indian diplomat M K Bhadrakumar. “Not a single country in the African continent and West Asian, Central Asia, South and Southeast Asian region has imposed sanctions against Russia.”

What is it that inhibits reaching out to a friendly country that has the very exports that Sri Lanka needs? The message from other interlocuters like former president Maithripala Sisirsena, who received a response to his letter to Putin, as well as the Russian ambassador’s remarks, have shown that there is no obstacle on their side if requisite steps are taken.

Such is the discomfiture over relations with Russia that the Minister of Power and Energy Kanchana Wijesekera backtracked on his statement to international media, end of May, that Sri Lanka had bought a consignment of Russian crude oil. According to Reuters “The 90,000-tonne consignment was ordered through Dubai-based Coral Energy, Wijesekera said, adding that the payment would facilitate restarting the country’s sole refinery, which has been closed since March 25.” Two weeks later the minister told the Sunday Times that the shipment was “not from a Russian company” but “a bid by one Dubai-based company, Coral Energy.” But the next day Prime Minister Ranil Wickremesinghe told India’s WION in an interview that “We did buy a shipment from Russia.” Reports say that with the EU sanctions blocking big companies from trading with Russian oil producers, smaller traders are profiting from the opportunity to ship Russian oil bought at deep discounts. Will Sri Lanka be equal to the task of adopting a calibrated diplomatic approach to resolving the fuel crisis, amidst this fraught international environment?

It’s no secret that Western powers exercise their considerable influence to arm-twist smaller states into compliance with their policies, in their bid to contain their rivals. But Quad-member India openly buys oil from Russia, while the EU itself continues to rely heavily on Russian energy, even while it seeks to reduce that dependency.

Geopolitical underpinnings

Some representatives of the ‘independent’ group of government-affiliated political parties including Democratic Left Front, Communist Party of Sri Lanka and National Freedom Front have been vocal on the government’s reluctance to negotiate with Russia. They charge that this failure is owing to fear of angering the US and EU. At a joint news briefing by the group, shown on national television, National Freedom Front spokesman Mohamed Muzzamil alleged that the government has fallen prey to the US’s ‘Indo Pacific strategy.’

Ironically, lending credence to this criticism was an editorial on Sri Lanka in the Washington Post, that laid bare the geopolitical underpinnings of American assistance to Sri Lanka. As quoted in the Sunday Times of 10.07.22, the column titled “Suffering in Sri Lanka: The US must help contain a debt crisis that could spread worldwide,” expressed the concern that President Putin “could use Sri Lanka’s pain to expand Russian influence over the Indo-Pacific region.” Arguing that the US should use its power as IMF’s largest shareholder to help countries restructure their debts, it said: “Sri Lanka presents an opportunity for the Biden administration to fashion a rescue in conjunction with other members of the Quadrilateral Security Dialogue — India, Japan and Australia. That could both mitigate suffering and show the entire Indo-Pacific that it pays to deal with the United States rather than China or Russia.”

At a media interaction in Colombo – the day after Rajapaksa’s phone call to Putin – US ambassador Julie Chung is reported to have said the US does not have sanctions against third countries importing Russian oil. She noted however, that there are sanctions on Russian banks, logistics, transport and financing. The latter translate into problems for third countries who wish to trade with Russia when it comes to making payments, even if there are no direct sanctions on them. So the bottom line is that third countries do get punished by the US-EU sanctions. Bhadrakumar, citing an UNCTAD report, has drawn attention to the alarming global fallout of blocking banking channels for trade with Russia. Hardest hit are least developed countries, particularly in Africa, which heavily depend on Russia for wheat, he observed.

The US envoy had said that “Sri Lanka must also bear in mind the fact that President Putin has initiated a brutal, unprovoked and unjustified attack of a sovereign country – Ukraine.” However many analysts, including from the West, have shown that the causes of the Russia-Ukraine conflict go deeper than the Western narrative would have us believe. Notably John Mearsheimer, Distinguished Service Professor in Political Science and Co-director of the Program on International Security Policy at the University of Chicago, has argued that “the West, especially the United States, is principally responsible for this disaster.”

The government of Sri Lanka is now at the mercy of the US-controlled IMF to rescue it from economic catastrophe. But additionally, does it suffer from an inability to take a principled stand at all in its foreign relations? For example, how does it reflect on the country when the energy minister announces Sri Lanka’s decision to lift a ban on the Qatar Charity, coinciding with his travel to the oil-rich state seeking fuel?

Former ambassador to Russia Saman Weerasinghe did not mince his words on Sri Lanka’s foreign policy, at a televised event organized last month by the Sri Lanka–Russia Friendship Society, that was attended by Russian ambassador Yury Materiy. Weerasinghe lamented that $800 million offered in project aid from Russia had not been availed of during his tenure. He deplored the incident where an Aeroflot flight was detained in Sri Lanka, asking why an apology had not been extended at the diplomatic level. The problem was that Sri Lanka’s foreign policy was formulated in some ‘other country’ he alleged, unlike foreign policies of other countries, that are formulated at home. That is a damning indictment – and unrelated to any global crisis. Given the country’s current political instability, against the backdrop of an epic power struggle unfolding on the world stage, events in strategically-located Sri Lanka will be closely watched in months ahead.

*This article was written before the president had submitted his resignation

Lasanda Kurukulasuriya is an independent Colombo-based journalist with an interest in geopolitics

Factum is an Asia-focused think tank on International Relations, Tech Cooperation and Strategic Communications based in Sri Lanka accessible via www.factum.lk