France which assumed the presidency of the European Union last month wants to work with India to ensure transparent financing in the Indo-Pacific region, said a top French diplomat. The European Union has noted that China is using its financial heft to fund a large number of projects in the region and expects to announce its own “transparent” and “green” financing initiative in which India will play a pivotal part.
“It’s a big problem. China is using its financing to (fund projects in) some countries in the region,” pointed out French Ambassador Emmanuel Lenain, in a conversation with journalists here Tuesday evening, citing Sri Lanka as an example.
The European Union will be hosting the Indo-Pacific Forum on February 22, which Minister for External Affairs S Jaishankar is expected to attend. The financing initiative where India will play a central part may be unveiled at the forum, the Ambassador indicated, adding that it will be “transparent and green (ecologically sustainable)”.
China accounted for about 10 per cent of Sri Lanka’s Dollar 35 billion foreign debt as of April-end 2021, government data showed. Among key projects which China has funded are the Hambantota port, which the Chinese have taken over on a 99-year lease, and a special economic zone on 660 acres of reclaimed land called the Colombo Port City.
Strategic analysts fear this is China’s way of building a ‘string of pearls’ or facilities in the Indo-Pacific region which could further the rising superpower’s influence.
Ambassador Lenain said, “India is top priority (for France and the EU) in the Indo-Pacific region…. We feel we are neighbours with (French-controlled) islands with 1.5 million people in the region”.
France owns a clutch of strategic islands near Madagascar in the Indian Ocean, which include Reunion island, Comoros archipelago, Crozet islands, Kerguelen islands and St Paul and Amsterdam islands.
He said France had some 8000 troops in the area, underlining the country’s military interests in the region.
Speaking on Brexit, he said he believed there would be economic “consequences” of the move.
Pointing out that Indian firms who had invested in EU had done so by headquartering in Great Britain, he indicated that many of them may now be looking to relocate to take advantage of EU common area benefits.
India has some 850 companies, with a combined revenue of nearly Dollar 60 billion, based out of the UK. These firms, spread over steel, automobiles, pharma and engineering have been on tenterhooks over the final shape of Brexit and taxation policy changes they may have to face for operations in Europe.