US extends 'military finance' to Sri Lanka to boost maritime security

The Trump administration today announced it was granting Sri Lanka $39 million to boost maritime security even as the emerald island's central bank had said last week that it had secured a $1 billion loan from China.

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"We look forward to discussing with the government of Sri Lanka how this contribution can support our Bay of Bengal initiative and Sri Lanka's humanitarian assistance and disaster response priorities," the US embassy in Colombo said.

The US embassy said the State Department will provide funds as "foreign military financing" subject to approval by the US Congress.

China Development Bank had forwarded the 1 billion loan at 5.25 per cent interest rate with a three year grace period.

Central bank Governor Indrajit Coomaraswamy had said it was mainly due to the fact that China sees Lanka as "a strategic partner as far as the (Belt and Road) initiative is concerned, given its location."

The Communist Party of China had said earlier that Sri Lanka is a "partner" in China's ambitious One Belt One Road(OBOR) initiative.

The party said in a statement that it will provide "all assistance to make Sri Lanka a commercial and financial hub in South Asia."

The US government's package for Sri Lanka is part of the Trump administration's initiative to ensure a "free, open, and rules-based order in the Indo-Pacific region".

Experts view the latest move by the US as a ploy to curb China's influence which is locked in a bitter cold war over its military manoeuvres in the South China Sea area.

Sri Lanka has already handed over the control of Hambantota sea port to China on a 99-year lease which India sees a threat in the Indian Ocean region. The move was attacked by the Lankan Opposition who accussed the government of selling out.