France wants to deepen its influence in the Indo-Pacific amid big-power interest in the region

French President Emmanuel Macron made a brief but historic stopover in Sri Lanka last month, in a show of France’s desire to offer an “alternative” to the big-power tussle between China, India and the West for influence in the Indo-Pacific region.
Macron’s visit comes as France and Sri Lanka mark 75 years of relations, and as both countries aim to boost cooperation in areas such as development aid, maritime security and trade.
Analysts say their growing friendship is driven by mutual interests, with Sri Lanka also looking to avoid being “caught” between rival powers jostling for regional influence as it works to tackle its huge debt burden.
Sri Lanka is in the throes of crippling economic and humanitarian crises, with a “severe recession, high inflation, depleted reserves and unsustainable public debt”, according to the International Monetary Fund.
People protest against the Sri Lankan government’s domestic debt restructuring process for crippling Employees’ Provident Funds in Colombo last month. Photo: EPA-EFE

“Sri Lanka not only is in a difficult position economically, but the situation has been compounded by an increasingly stressed regional environment due to strategic competition between large powers,” said Nilanthi Samaranayake, a visiting expert at the United States Institute of Peace.

Macron’s trip is an indication of Paris’ desire to be viewed as an alternative to the other powers, said Mathieu Droin, a visiting fellow at the Centre for Strategic and International Studies’ (CSIS) Europe, Russia and Eurasia Programme.

“France also wants to propose a third way, or an alternative to the binary choice between China and the West or US; it wants to be a balancing power,” Droin said.

He added that the French message to countries like Sri Lanka was that “countries should not have to choose or pick sides if they don’t want to”.

Sri Lanka’s ties with France go way back, having received French assistance since the devastating tsunami in 2004.

Amid Sri Lanka’s crises, France has emerged as its fourth-largest creditor after ChinaIndia and Japan. According to the Sri Lankan government’s treasury data, the amount it owed France totalled US$428 million as of March. Apart from this, the French government’s aid and development agency AFD has committed US$680 million to projects over the last decade, according to the French Ministry for Europe and Foreign Affairs.

In May, Expertise France, which forms a part of AFD, worked alongside the European Union to launch a “Green Policy Dialogue Facility” in Sri Lanka to help it develop “a green and a circular economy and ensure its long-term macroeconomic stability”. The AFD, EU and World Bank also approved a US$10.6 million grant to strengthen Sri Lanka’s management of public finances in July.

Sri Lanka owes US$7.1 billion to bilateral creditors, according to official data from its government, with US$3 billion owed to China, followed by US$2.4 billion to the Paris Club and US$1.6 billion to India.

Workers at a wholesale market in Colombo this month. Sri Lanka is in the midst of a severe recession with high inflation, depleted reserves and unsustainable public debt, according to the IMF. Photo: EPA-EFE

The government also needs to renegotiate more than US$12 billion of debt in eurobonds with overseas private creditors, and US$2.7 billion on other commercial loans.

In April this year, France, working alongside India and Japan, also announced a common platform for Sri Lanka’s creditors to coordinate and help Colombo restructure its debt.

Meanwhile, stronger economic ties with Paris could help Colombo boost its finances in the future, Samaranayake said. “Sri Lanka will need to drive up exports to generate sources of foreign currency and climb out of its economic crisis. The European Union’s Generalised System of Preferences Plus is critical for aiding Sri Lanka’s market access,” she said, adding that France could facilitate this by addressing any EU concerns.

China’s Foreign Minister Wang Yi (right) meets Sri Lankan Prime Minister Dinesh Gunawardena in Kunming, southwest China, last month. Photo: Xinhua

Eye on China

France has called the Indo-Pacific a “priority”, but it is “a bit late to the party” considering that other countries including the US, Japan and India have been actively expanding their influence in the region, Droin of CSIS said.

“The intent of Macron’s visit was to make up for the lost time and keep up with these big powers,” Droin said. “This visit signalled a shift in the French approach to the region.”

French interests in the region have also been piqued by China ramping up its economic, diplomatic and military presence in the Indian Ocean.

France, due to its [Indo-Pacific] territories, is in a very good position to observe increased Chinese assertiveness

Mathieu Droin, CSIS visiting fellow

In her testimony before the US House of Representatives in April, Darshana Baruah, Carnegie Endowment fellow with the South Asia Programme, said China is the sole major player with an embassy in each of the six island-states in the Indian Ocean – Sri Lanka, Maldives, Mauritius, Seychelles, Madagascar and Comoros. It has been making naval deployments to counter piracy in the Gulf of Aden, and its military ships are regularly spotted in the Indian Ocean region.

Droin said Beijing’s actions were especially alarming for Paris.

“China was an important factor [driving] the visit. France, due to its territories [in the Indo-Pacific], is in a very good position to observe increased Chinese assertiveness, especially in the South Pacific,” he said, referring to Reunion, French Polynesia and New Caledonia.

The India factor

As France seeks to boost its influence in the region, Sri Lanka is also banking on an active French presence to help it overcome an awkward dilemma: its increasing reliance on neighbouring India.

In the last couple of years, India has provided Sri Lanka about US$4 billion in assistance, through credit lines, currency swap agreements and deferred import payments. Sri Lankan Parliamentary Speaker Mahinda Yapa Abeywardena last month said New Delhi’s aid “had saved” Colombo from a “bloodbath” in the financial crisis.

Indian Prime Minister Narendra Modi (right) welcomes his Sri Lankan countepart Ranil Wickremesinghe to New Delhi last month. Photo: EPA-EFE

Yet, analysts say there is growing discomfort in Sri Lanka at its growing reliance on India.

“There are some calls in Colombo to have a more robust engagement with India, but that does not mean India will be the only player Sri Lanka wants to depend on,” said Aditya Gowdara Shivamurthy, a junior fellow with the New Delhi-based Observer Research Foundation’s Strategic Studies Programme.

“Indian aid has definitely helped Sri Lanka, but it has also created a sense in Colombo that it has to be more sensitive to India’s security interests and Indian concerns. It can’t take India for granted as it did,” Shivamurthy added.

Sri Lanka has been demonstrating its independence on issues concerning its interests. Last week, it announced it was joining the Regional Comprehensive Economic Partnership trade bloc, which Delhi had walked away from in November 2019, claiming it hurt Indian interests. Sri Lanka is also contemplating a free-trade agreement with China, a development that has raised eyebrows in India.

Sri Lanka is not operating primarily from a position of strength, so it seeks more partners than fewer

Nilanthi Samaranayake,United States Institute of Peace visiting expert

Analysts said growing engagement with Paris would help ease Colombo’s dilemma.

France has also been keen to boost its maritime presence in the region, where Sri Lanka is emerging as a key player thanks to its strategic location. In the last two months, two French naval ships visited the port of Colombo for resupply activities.

Shivamurthy, ORF junior fellow, said the three strategically located Sri Lankan ports of Colombo, Hambantota and Trincomalee are key for major powers looking to boost their presence in the Indo-Pacific and secure sea lines of communication.

Samaranayake agreed, saying that Macron’s meeting with Sri Lankan President Ranil Wickremesinghe suggested that Sri Lanka and France would collaborate on maritime safety and security, which are crucial to Sri Lanka given its location in the Indian Ocean sea lanes and “persistent” maritime security challenges.

“Sri Lanka is not operating primarily from a position of strength, so it seeks more partners than fewer,” Samaranayake said.

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