Small States Forced Into Global Power Struggle | Dr. Asoka Bandarage

## Multipolarity and its Limits The emergence of a multipolar world has been greeted with a mix of hope and caution. On the surface, a diffusion of global power away from a single hegemon ought to provide smaller states with more room to maneuver: new creditors to bargain with, alternative markets, and the chance to play one power off another. The conversation with Dr. Asoka Bandarage, however, pushes back against a simple optimism. What is changing is less the logic of global politics than the geography of those who wield power. The old instruments of influence — debt, conditional aid, trade terms, and military access — are being reactivated by new actors. Multipolarity is not automatically multiprogress; without a change in the underlying economic and political model, it can simply redistribute the levers of coercion. This reframing matters because it dispels a comforting myth: that the arrival of BRICS or other non-Western power centers will necessarily rescue small states from neocolonial dynamics. Dr. Bandarage makes a pointed distinction between a change in the identity of dominant states and a change in the systemic practices that produce dependency. Countries such as China and India can — and do — replicate familiar patterns of competitive, extractive engagement. For small states, the crucial question is not merely whether new patrons exist, but whether the incentives and conditionalities that shaped the previous era have been dismantled. ## Debt, Dependency, and Sovereignty Debt is the single most effective instrument of modern control. The conversation returns repeatedly to how economic distress transforms sovereignty into bargaining power for creditors. When a state’s balance-of-payments collapses, its options narrow: bilateral loans, currency swaps, or supranational bailouts (most notably from institutions like the IMF). Each of these comes with strings. IMF programs bring austerity and restructuring that often shift burdens onto ordinary people through cuts in social spending and privatization. Bilateral assistance can come with explicit or implicit geopolitical expectations. Sri Lanka features as a cautionary case in point. Dr. Bandarage highlights how the 2022 crisis could have been handled differently; instead, pressure channeled the country into a sequence of restructuring moves that realigned its economic dependencies. Whether the leverage came from Western-backed institutions or from neighbors such as India, the effect was the same: reduced policy space, weakened domestic institutions, and increased vulnerability to geopolitical demands. The lesson is stark — when indebtedness is denominated in foreign currencies or routed through external financial centers, domestic democratic choices become conditional. The term "debt-trap diplomacy" has been widely used to criticize particular actors, but Dr. Bandarage emphasizes that the phenomenon is structural rather than unique to any one creditor. China’s Hambantota port arrangement is cited frequently as a paradigmatic example, yet the logic at work mirrors practices by other powers: states in distress cede strategic assets or political concessions in exchange for liquidity. Treating debt only as a bilateral moral failing obscures the systemic incentives that privilege creditors and undermine debtor sovereignty. ## India, China, and the South Asian Chessboard South Asia exemplifies how multipolar rivalry can intensify pressure on medium and small states. India, as a regional hegemon, and China, as a rising global power, have become principal competitors for influence across the Indian Ocean rim. Dr. Bandarage traces how India’s economic leverage — through currency swaps, trade packages, and MOUs — has translated into political and security expectations, including defense agreements whose terms are opaque but consequential. The worry is not merely the presence of Indian influence, but the way economic dependence can coerce military alignment, drawing states into security architectures such as the Quad by proxy. The region’s political volatility — recent regime changes in Sri Lanka, Bangladesh, Pakistan, and elsewhere — cannot be divorced from this broader contest. Elections and government turnovers are increasingly shaped by external pressures: aid flows, trade access, and diplomatic signaling. Small states face a double bind: aligning with one great power risks retaliation or estrangement from another; remaining ostensibly non-aligned leaves them vulnerable to punitive economic measures. The militarization of the Indian Ocean and incidents like interference with port access underline how economic instruments are translated into geopolitical control. Dr. Bandarage advocates a closer reading of the Indo-Sri Lankan dynamic as more than bilateral friction; it is symptomatic of a system where economic bargaining is inseparable from security arrangements. The very tools offered as assistance — grid interconnections, pipelines, loans — can become vectors for strategic entanglement. That makes the independence of smaller states conditional not only on their domestic policy but on the shape of regional rivalries. ## Neoliberal Continuities under New Powers A key argument emerging from the discussion is the persistence of neoliberal policy frameworks across different power centers. Whether under Western tutelage or sponsored by BRICS actors, the dominant model remains market-led growth, technological primacy, and privatization. Dr. Bandarage contends that the superficial shift in global leadership masks a deeper continuity in economic orthodoxy: profit maximization trumps social welfare and environmental stewardship, and the embrace of high-tech capitalism accelerates inequality. Even when state-led models appear different — for instance, China’s combination of market mechanisms with strong central political authority — the end result is often the same in international practice: projects of infrastructure, trade, and finance that deepen dependencies and privilege corporate interests. The alignment of state power and billionaire capital is not unique to Western democracies; it is a more general feature of contemporary capitalism. This convergence suggests that merely swapping partners will not alter the structural conditions that perpetuate extraction and disempowerment. Consequently, the promise of a new world order that will simply restructure benefits toward the Global South is questionable. The essential parameters — how growth is defined, who captures surplus value, and what counts as legitimate development — remain contested. Without an alternative framework that prioritizes ecological sustainability, social protection, and equitable terms of trade, the global system will continue to reproduce the same inequalities under different flags. ## Non-Alignment Reimagined The Non-Aligned Movement of the postcolonial era once embodied an attempt to escape binary Cold War choices and to craft an alternative path in which newly independent states could pursue economic autonomy. Dr. Bandarage draws a throughline from those aspirations to present-day demands for a renewed form of non-alignment. But she is clear-eyed: non-alignment cannot be a passive posture. In a multipolar age, neutralism must be active, involving regional cooperation among smaller states, diversified economic relationships, and collective bargaining to resist bilateral coercion. Reviving non-alignment effectively requires rebuilding the institutional and civil-society linkages that declined under neoliberal globalization. Where colonial-era peripheries were oriented to metropolitan centers, contemporary small-state strategies should prioritize South-South cooperation, mutual trade, and shared infrastructure that do not lock partners into single-creditor dependencies. Turning declarations into practice demands both diplomatic creativity and domestic policy resilience — currencies and reserves, public investment to stab

Small States Forced Into Global Power Struggle | Dr. Asoka Bandarage NEW (!) Goods Shop: https://neutralitystudies-shop.fourthwall.com Will BRICS rescue small states from the predatory politics of the neocolonial West or is this just the latest itineration of yet another era of global „might makes right“? Today I’m talking to Dr. Asoka Bandarage. Dr. Bandarage is a Sri Lankan political scientist and the author of the book “Crisis in Sri Lanka and the World” in which she analyses colonial and neoliberal origins of her country’s economic and political problems. She that the same mechanisms keep much of the developing world in a state of poverty and constant internal struggle. I talked to Dr. Bandarage nearly two years ago about her book, and today we want to do an update on what has been happening in and around South Asia and the uncertain promises of the new multipolar world for small states. #F1 I think that it's not just South Asia, but it looks like the whole world is being dragged into this geopolitical polarization. And it is happening not just at the level of states; it's even happening at the level of the media and academia. It's almost like people are being pushed to take a stance: either you are pro-China or anti-China, pro-West or anti-West. So there is this polarization that is happening around the world, but certainly, it's very intense in South Asia. #M2 Hello everybody, this is Pascal from Neutrality Studies, and today I'm talking to Dr. Asoka Bandarage. Dr. Bandarage is a Sri Lankan political scientist and the author of the book "Crisis in Sri Lanka and the World," in which she analyzes the colonial and neoliberal origins of her country's economic and political problems. She also makes the argument that the same mechanisms keep much of the developing world in a state of poverty and constant internal struggle. I talked to Dr. Bandarage nearly two years ago about her book, and today we want to do an update on what has been happening in and around South Asia and the uncertain promises of the new multipolar world for small states. Dr. Bandarage, welcome back. #F1 Thank you so much for having me again. I really appreciate it. #M2 -- 1 of 13 -- Thank you very much for coming online again. You wrote an article recently that you sent to me, and I published it on my Substack about how the world looks for smaller states around the large giants of India and China. While the multipolar world and BRICS have a lot of promises, the experience of Sri Lanka suggests that we need to be a bit careful. I mean, it's not all rosy and lovey- dovey. Can you maybe explain a little bit about what you've laid out there? #F1 Yes, I think that on the part of some progressives, both in the West and in the so-called Global South, there's a lot of optimism about the rise of BRICS and a multipolar world. There's no question that a new international order is needed as the US and the West are losing their dominance in the world. BRICS was established to bring that multipolarity and diversity to economics as well as political structures. But when you really look at what's happening, you find that the BRICS countries are also following the same model, the same economic model to begin with, of competitive capitalist growth, technological dominance, and surveillance leading to great inequalities in their countries, as well as economic destruction. And also, there's a lot of disparity in the power dynamics between the bigger countries and the smaller countries, as I have discussed in two recent articles on India-Sri Lanka relations. #M2 Can you maybe give examples from this India-Sri Lanka relationship in which you think that the power dynamics just don't lend themselves to a fairer world? #F1 Yes, I think in order to understand this, we have to look at it not just in terms of politics, but also economics. When countries are in difficult economic situations, like the crisis in Sri Lanka in 2022, they become beholden to larger powers. There is literature on this, suggesting that the 2022 economic crisis in Sri Lanka, especially the default, could have been avoided. There were bilateral loans available, but instead, Sri Lanka was pressured to go for an IMF bailout and restructuring, which essentially moved Sri Lanka away from China's sphere of influence into Western and IMF dominance. So when a country is economically needy and essentially down on its knees, other powers can come and make demands in return for the loans and aid that are given. One, of course, is well known: the IMF conditionalities. When the IMF bails out a country, it imposes many conditions that must be met to increase state revenue and cut back state expenditure. The weight of these conditions often falls on the average people when tariffs are increased, and when social services like health and education are cut. Additionally, the privatization of state-owned sectors can lead to unemployment for people working in those sectors, with very little in terms of actual economic benefits coming to the country. This has happened not just with the IMF, but also -- 2 of 13 -- with India. India provided something like a $4 billion bailout package, which included currency swaps, trade swaps, and loans, allowing Sri Lanka to buy essential commodities that it was lacking at that time, essentially from India. And also, it led to lots of benefits for Indian companies operating in Sri Lanka. India has used this leverage to make many demands on Sri Lanka. Some of these recent MOUs that have been signed with India are also because of India's increasing economic power over Sri Lanka. So, a country being in an economically difficult situation and therefore beholden to external powers can also lead to its loss of sovereignty, political independence, and threats to its national security, which is what we are beginning to see in the Indo-Sri Lanka relationship, especially with the signing of a defense agreement between Sri Lanka and India. #M2 Right. If I remember your argument correctly, you're saying that this defense agreement, aside from the defense MOU, besides not exactly knowing what was agreed, also comes with a higher risk of there actually being clauses that somehow concern the military cooperation with the United States that India has going on inside the quadrilateral format. And you're very worried about Sri Lanka being drawn out of economic necessity into a military framework that might not at all be beneficial to the island. #F1 Absolutely, because Sri Lanka has had a tradition of being a non-aligned state and has been a leader of the Non-Aligned Movement in the past. But rather than balancing these different powers that are all trying to have control over Sri Lanka, Sri Lanka is now being taken in as part of the quadrilateral alliance that India is a part of. #M2 Again, you're making this connection between the economy and political processes. The core of the argument is that as long as smaller states depend economically on aid, especially aid that comes in different forms, particularly these debt restructuring mechanisms, they are connected to the issue that smaller states, especially developing states, get indebted in foreign currency. The debt is denominated in US dollars or in Indian rupees. And then you have no other choice but to start borrowing or start begging these states to give you more rupees and dollars. So, before you criticized the United States and Europe for creating these debt traps, do you think that India and China too are engaged in debt trap diplomacy in order to have their say or impose their will? #F1 -- 3 of 13 -- Yes, absolutely. Because China was criticized over the Hambantota Port deal. The Hambantota Port, which is in a strategic location, was leased to the Chinese for 99 years. Even though it was maybe not a direct conversion of a debt as a debt repayment, it nevertheless was an agreement that was made out of the dire necessity of Sri Lanka being in a debt-ridden position and needing more foreign exchange. And certainly with India, it's the same thing. I mean, it is the economic necessity that is leading to a lot of these agreements, including electricity grid interconnection with India, a multi- product petroleum pipeline, and so on and so forth. Many of these have been initiated by India, but Sri Lanka has gone along with it. But I think that in order to understand this political-economic connection, we have to look at the very roots of it in the colonial period, with the introduction of import-export economies and the terms of trade that were biased against the southern countries. Even in the post-independence era, terms of trade worsened for the global southern countries. Then you have the Non-Aligned Movement. The Non-Aligned Movement was not just a political phenomenon where the ex-colonial countries wanted to stay away from the Cold War and the two opposing groups, but they were really calling for new paths of economic development, the right for these countries to pursue their own paths of development. So you have the new international economic order that many global southern countries were calling for in order to have better terms of trade in their dealings with the global north. And these were being discussed, you know, under the United Nations Conference on Trade and Development. Then some of these countries were nationalizing plantations and foreign-owned businesses, like, for example, the Suez Canal in Egypt. Import substitution programs and various other attempts were made for these countries to become economically self-sufficient and move away from economic dependence. But then what happened was there was a backlash against this. The Non-Aligned Movement and its attempts for both political and economic autonomy and collective struggle were moving forward from the 1960s to the end of the '70s or so. And then you have neoliberalism, which was introduced, and there was a sort of sabotage of those earlier decolonization efforts. Countries like Sri Lanka were brought into the fold of neoliberalism with deregulation, privatization, cutbacks in social welfare, and a real push for export production. So many of the problems that you are seeing today stem from these historical developments. #M2 Yes, I completely agree. The whole trick in the '60s, '70s, '80s, '90s, and early 2000s was to move away from direct political control to indirect control by, you know, again, with the debt trap, right? With being able to open the money stream or close it, and depending on which one you do, the politics in the country then adjusts and changes. And by the way, when that didn't work in certain countries, the United States often just interfered directly, like in Chile, where Mr. Allende got ousted, -- 4 of 13 -- right? Any time a country changes the social model, that will then be directly counteracted because the social and political models are directly connected. Now we are moving into this new world where we have more players. So in theory, this should give smaller states like Sri Lanka more options for negotiating beneficial trade deals. But reality, at least so far, is not quite there yet. Or do you think that Sri Lanka is now in a better position to try to get beneficial agreements with its partners? #F1 That's certainly not what's happening now, because it is the same model that is being pursued. It is still neoliberalism, you know. It is the same economic model that is pursuing profit over environmental protection and social protection. New players are coming to the fore, but it is still the same model of neoliberalism. Margaret Thatcher had said that there's no alternative to neoliberalism, but that really needs to be questioned at this very critical juncture in the world. There is an acceptance of this particular model of technological and capitalist development as a kind of God-given. There is no alternative; this is the only way for humanity to survive. But I think this is the time when there sho