As the major powers struggle to establish their influence across the Indian Ocean, Sri Lanka finds itself at a crossroads.

Positioned between the established economic and logistical hubs of Dubai and Singapore on critical global trade routes, with the potential to become a regional trading, logistics and finance hub of its own, Sri Lanka’s geostrategic position in the region has not gone unnoticed. Following the reframing of United States foreign policy to extend the Asia-Pacific to the Indo-Pacific, interest in Sri Lanka has been growing. Interest has increased from the United States, Australia, Japan and Russia in recent times.

But this recognition poses tough challenges for Sri Lanka.

The election of President Gotabaya Rajapaksa in November last year drew international attention, specifically because of his approach to foreign policy. Despite speculation of a pivot away from former President Sirisena’s more US-oriented policy back towards China in policies reminiscent of his brother, President Rajapaksa has pushed for neutrality. Sri Lanka is pursuing an equidistant, neutral foreign policy agenda, keen to remain uninvolved in the conflict between major powers. Whether President Rajapaksa has learnt from the mistakes of the past remains unclear, however, as a small South Asian state, it is unrealistic to assume that Sri Lanka is in a position to swing between a pro-China and a pro-US mindset dependent on a change in leadership.

Nonetheless, remaining uninvolved in the US-China power struggle in the Indian Ocean region might not be a practical choice given the growing pressure from both countries to establish their place in Sri Lanka.

Having completed multiple infrastructure projects following the end of the civil war, China has been a consistent development presence in Sri Lanka for over a decade. With the Colombo International Financial City project (or, port city) an essential component of China’s maritime Silk Road and the largest foreign direct investment in Sri Lankan history, China is an immovable and indispensable presence in Sri Lanka. Sri Lanka is firmly entrenched within the Belt and Road Initiative with unfinished projects at the mercy of an imported Chinese labour force, with the newer additions of the COVID-19 concessionary loan of USD 550 million and other pandemic requirements, including testing kits, masks and personal protective equipment.

However, other countries are providing strong alternatives.

The United States Millennium Challenge Corporation (MCC) has approved the Sri Lanka Compact which would grant almost half a billion dollars for transport infrastructure and changes to land administration processes. This is yet to be signed after amendments were called for earlier this year by Sri Lanka, and the recent final report of the MCC review committee does not bode well for its future. The 1995 Status of Forces Agreement (SOFA) with the United States came under fire last year after proposed revisions were leaked. These revisions would have seen the potential for United States military presence in Sri Lanka to grow drastically. Concerns over the granting of diplomatic immunity to US troops, free movement of US military vessels and personnel within Sri Lanka, and loss of national sovereignty saw intense opposition across the political spectrum and defence forces. Though former Prime Minister Ranil Wickremesinghe framed the revisions of SOFA as a peace-time document, the imminent possibility of an American military base on Sri Lankan soil proved too contentious.

The role of India in the region practically goes unsaid. The relationship between Sri Lanka and India can be traced back to ancient history. However, modern relations fell sharply with the arrival of Chinese submarines in the Colombo harbour in 2014 as India saw this as a threat, though relations have warmed since then and President Gotabaya Rajapaksa made his first official overseas visit to New Delhi. India has been key in increasing Sri Lanka’s maritime security capabilities and recent talks between Prime Minister Modi and President Rajapaksa have raised the possibility of a maritime research coordination centre.

Australia too has been wooing Sri Lanka in its own way, identifying the island nation as a key strategic focal point in the Indian Ocean region in the 2016 Defence White Paper, and participating in the inaugural Strategic Maritime Dialogue and Senior Officials’ meeting in Colombo in 2019. Naval cooperation through the Indo-Pacific Endeavour exercises has also allowed Australia to engage in training and capacity-building in Sri Lanka. Delegations from Japan and Russia have also met the president early this year.

Yes, Sri Lanka is indeed torn in multiple directions by multiple actors, but ultimately the tug-of-war is between the US and its allies, China, and Sri Lanka’s own national interests. The easy, idealistic answer would be to balance multilateral cooperation so as to serve national interest. However, only time will tell if Sri Lanka’s current approach will remain viable into the future as it continues to strive to become an important regional actor.

Nimaya Mallikahewa is in her fifth year of a double degree in International Studies, majoring in International Relations, and Media (Public Relations and Advertising) at the University of New South Wales. She is currently the executive editor of Politik, the student-run UNSW International Affairs Review. She served as a Speakers’ Director for the inaugural UNSW ASEAN Conference in 2019 and interned at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies in Sri Lanka. Nimaya’s research interests include international development aid with a focus on South Asian development, Sri Lankan and Australian foreign and security policy, transitional justice, and maritime security.

Nimaya is an intern with the Australian Institute of International Affairs NSW.