The ‘New Quad’ in the Middle East: Opportunities and Implications for Sri Lanka’s Middle Eastern Relations

Abstract

The emerging geopolitical tension and the trade competition in the Indian Ocean urge Sri Lanka to plan its diplomatic ties prudently encouraging Sri Lankan decision-makers to envisage a new strategy for international diplomatic cooperation: minilateralism. This diplomatic engagement mode enables smaller states to cooperate with greater powers in small-scaled/sized cooperation patterns to increase their international opportunities. Since the Indian Ocean has become a hotspot of maritime trade competition and various geostrategic developments, Sri Lanka aspires to new venues for international cooperation. The ‘new Quad’ formed among the United States, India, Israel, and the United Arab Emirates can be a potentially lucrative partnership for a littoral state like Sri Lanka. Amid these developments, this paper seeks to fill a void by delving into the strategic reasons for Sri Lanka’s engagement with the Middle East via minilateralism. This paper investigates the newly strategising affairs of the ‘new Quad’ which two of their member states, Israel and UAE are from the Middle East, and views on how Sri Lanka can benefit in economic ties and crisis management realms to deal with energy and maritime trade issues.

Keywords

Indian Ocean Middle East minilateralism new Quad Sri Lanka

Introduction

The Indian Ocean has entered into a challenging phase of great power. This current development specifically foresees increased competition in commerce and security between the two most powerful countries in the world, the United States and China, as well as alliances that support the two countries. Sri Lanka is situated in the heart of the Indian Ocean, which makes it attractive for trade and security networks for both intra- and extra-regional states (Ghosh, 2014). The intensification of great powers’ regional economic and security rivalries turns regional affairs quite volatile for littoral states like Sri Lanka. Yet, such volatility opens new venues for global dialogue for, states like Sri Lanka to utilise geostrategic developments for addressing some vital issues on the regional agenda.

This paper first examines the benefits Sri Lanka can gain through cooperation with the new economic and political dialogue emerging as the ‘new Quad’ – a collaboration between the United States, India, Israel, and the United Arab Emirates (UAE). The foundations of the ‘new Quad’ were laid in 2021 following a meeting of the abovementioned countries on a foreign ministerial level. Second, it examines the role minilateralism plays for both the ‘new Quad’ and Sri Lanka’s possibilities of cooperation, particularly considering aspects such as economic and trade enhancements, sharing of the sea lines for effective transportation of goods and services, addressing specific issues in energy, labour migration, and various other concerns arise in the waste management and climate change. This paper attempts to fill the gap in the literature by examining how ‘minilateralism’ encourages small powers to cooperate with larger powers by examining Sri Lanka as a case study. With this, this paper attempts to provide fresh academic insight into Sri Lanka’s foreign policy direction in dealing with issue-based management, diplomacy and extra-regional cooperation.

Multilateralism includes international cooperation between two or more states, which in practice would not end up benefitting member states alone (Newman, 2007). Regarding multilateralism Robert Cox (1992) says multilateralism can bring wider opportunities to other groups of states and organisations that would have direct and indirect linkages among multilateral groups. Relying on the idea that economic cooperation is imperative for sustaining world affairs, Luttwak (1990) states that a state’s economic power is considered important for strategising its position and sustainability. Among many international organisations and groupings formed since the end of the Cold War, the very recent establishment of the ‘new Quad’ in the year 2022 initially brings economic interests of some historical partners on a transregional platform, where these states’ strategic positions formed the core of its functionality. As a member of the ‘new Quad’, India proclaims, this new economic dialogue strategises a venue for India’s relations in West Asia – India’s historic trade ties with the Middle East can be further envisaged through this new presence (Sengupta, 2021). Also, President Joe Biden’s administration in the United States ended the ‘common interest goal’, that is, the economic partnership between allies that can mutually dialogue on non-military issues and strengthen economic cooperation between member states (Business Standard, 2022). The ‘new Quad’ is also seen as a group that would attempt to augment the United States’ geostrategic and security involvement with the Quadrilateral Security Dialogue (the Quad), partnered with the membership of Japan, India, Australia, and the United States, which has common military and security interests targeting the Indo-Pacific region (Jash, 2021).

Taking it as the common objective, the ‘new Quad’ particularly looks into broader interests in energy, food, health, space, transportation, and water management. The ‘new Quad’ also popular as I2U2 – an alliance of the four states (for the two ‘I’ s for India and Israel and the two ‘U’ for the United States of America and the United Arab Emirates), has formulated its strategy of connecting the three geographical regions, including North America, the Middle East, and the Indian Subcontinent, and interpreting their establishment as a ‘cooperation across hemispheres’ (Business Standard, 2022). The four powers of this group thus envision their way forward through a grand strategy, implicitly via minilateralism – an arrangement of cooperation with smaller groups of states with common interests in dialogue.

The minilateralist structure of the ‘new Quad’ is particularly important for Sri Lanka, since some of the strategising concerns of the ‘new Quad’, such as dealing with the future energy crisis, issues in the maritime realm, and climate change, are also Sri Lanka’s concerns. Moreover, Sri Lanka’s current debt crisis has prompted the country’s decision-makers to rethink their diplomatic stance by diversifying the exports and collaborating with a new variety of international partners.

This paper includes three main sections. The first section discusses the conceptual framework of minilateralism with a special emphasis on its value for international cooperation, particularly in the functioning of the ‘new Quad’, its prospective ties with smaller states. Second, this paper looks into the potential benefits that Sri Lanka can gain through cooperation with the two powerful Middle Eastern states, that is, Israel and the UAE Third, examining of the use of minilateralism, the ‘new Quad’ and its strategy of issue-based management and the benefits to Sri Lanka. With this analysis, this paper puts forward an academic insight to be a springboard for future research of Sri Lanka ties with extra-regional states.

Minilateralism and the new Quad in the Middle East

Minilateralism

Minilateralism is a grouping of a small number of states to achieve the most significant impact in solving a particular issue (Naim, 2009). It is also defined as the self-selection of small subgroups of countries that seek to complement bilateralism and region-wide multilateralism (Medcalf, 2008). Unlike multilateralism, which works based on indivisibility and generalised organising principles, the minilaterals focus on gathering critical mass to have the largest possible impact on solving a particular problem (Eckersley, 2012; Falkner, 2016; Naim, 2009). Thus, the twenty-first century sees a rapid increase in minilateral arrangements as the popular choice of inter-state engagement to achieve outcomes that cannot be accomplished through bilateral and multilateral arrangements.

The idea of minilateralism is not new (Kahler, 1992; Medcalf, 2022). Since 1945, minilateralism has existed along with bilateralism and multilateralism. The United States–Japan–South Korea trilateral coordination on North Korea’s nuclear proliferation, unofficial dialogue between the United States, Japan, and Russia, before the Japan–Russia summit in November 1997, and the Four-Party Talks among the United States, China, South Korea, and North Korea are some minilateralism. This pattern of cooperation has largely been applied to international trade and security issues. Brummer (2014) notes that countries are relying on more modest ‘minilateral’ devices like trade alliances, informal ‘soft law’ agreements, and financial engineering to manage their affairs global economy. He argues that due to the multilateral cooperations failure to achieve big reforms, due to the lack of their members’ unanimous acceptance, countries tend to form an array of more modest and less ambitious ventures, which have more potential to coordinate diverse sectors of the international economy. This increases the utilisation of minilateralism through smaller group interactions that could involve the most powerful actors in the international system.

The scholarly debate notes how, in later years, minilateralism is being used more frequently in international affairs. Hampson and Heinbecker (2011) discuss how institutional innovations such as the Group of Twenty (G20), a minilateral platform, have provided greater flexibility in global governance and international diplomacy and provided a solution for the legitimacy/efficiency conundrum by combining inclusiveness and representativeness. Minilateralism is also being identified as an effective strategy for addressing climate change issues. McGee (2011) notes that greater effectiveness in responding to climate change can be found when an institution involves a smaller number of key states, particularly key emitters. He also notes that exclusive minilateralism, such as in the Asia–Pacific Partnership on Clean Development and Climate (APP) and APEC Sydney Declaration, has sought to facilitate dialogue outside major multilateral platforms such as the Kyoto Protocol.

The number of parties in a minilateral arrangement differs. Some scholars identify the number to be around 20, especially in addressing issues of the global economy, climate change and nuclear proliferation. According to Naim (2009), the ‘magic number’ that will break the world’s untenable gridlock depends on the particular problem or the issue the grouping targets to address. For instance, given how the G20 countries control 85% of the global economy, they could reach a major trade deal among themselves. In the case of climate change, the world’s top 20 polluters account for 75% of the planet’s greenhouse gas emissions. Thus, Naim argues that grouping a small number of countries whose actions are needed to generate pragmatic solutions can provide the foundation for more inclusive deals to be subsequently built.

Other scholars argue that the magic number ranges from three to five in the Indo-Pacific context. Green (2014) notes that in Asia, the minilaterals that are formed to address security issues have increasingly taken the form of trilateral groupings such as the United States–Japan-Korea Trilateral; the United States–Japan–Australia Security Dialogue; the United States–Japan–India Strategic Dialogue; and the China–Korea–Japan Trilateral Summits and Secretariat. Nilsson-Wright and Asia Programme (2017) reiterates how India, Australia, and Japan have formed minilateral alliances to address their shared security concerns and issues in the region over the years. Emmers (2013), examining Southeast Asian security architecture, notes how the Five Power Defence Arrangements (F.P.D.A.) between Malaysia, Singapore, Australia, New Zealand, and the United Kingdom operates as a loose and subgroup structure focusing on a specific set of security issues of direct concern to its participants while complementing and overlapping with existing bilateral and multilateral security structures in the region.

The success of minilateralism is attributed to its very nature of being less grandiose than its predecessors – being modest in size, formality and inclusiveness. They are usually characterised by an array of flexible, ad hoc frameworks whose membership varies based on shared values, situational interests, or relevant capabilities. Tow (2008), argues that even multilateral institutions such as Association of Southeast Asian Nations (ASEAN), which had once been referred to as a model of an economically integrated institution capable of effectively dealing with regional challenges and have begun to reduce outcomes to the lowest denominator due to increasingly fractured and divided opinions on regional issues. As such, unlike multilateral institutions, which constantly face challenges in dealing with regional challenges, minilateral institutions can respond to collective and mutually complementary issues more effectively. Their agendas are usually less extensive and unlikely to expand into inclusive multilateral institutions (Tow, 2008).

Minilateralism is also a more effective and practical engagement model for smaller/developing states with limited financial and human resources to participate in larger multilateral platforms (McGee, 2011). In multilateral platforms and meetings, larger/developed or developing states dominate the discourse with their national capabilities and representative power, which limits smaller states’ role and impact in decision-making processes. This may even constrain their individual choices. As a result, the effectiveness in responding to certain issues, such as climate change, requires smaller-numbered groupings.

Minilateralism in the 21st century has been a favourite cooperation arrangement among the major powers in the Indo-Pacific and also a strategic choice in dealing with their partners, especially in the security sphere. As a result, many major powers, including the United States and India, are entering into minilateral arrangements with their like-minded partners. The Quadrilateral Dialogue in the larger Indo-Pacific and the ‘New Quad’, which was later re-christened as the I2U2 in the Middle East are instances in which India and the United States have attempted to cooperate in a minilateral sense with their relevant partners.

The geopolitical complexity of challenges in the Indo-Pacific region is exacerbated by United States–China tension, numerous territorial disputes, and the Myanmar crisis. While these issues emphasised the importance of cooperation between countries, they also brought to the surface the challenges faced by intergovernmental, multilateral frameworks, such as ASEAN. These challenges and complexities underscored that dialogue and cooperation between smaller groups with a common agenda bring effective results as opposed to multilateral engagements. As such, minilateral arrangements such as the security alliance between Australia, the United Kingdom and the United States, known as AUKUS (2020), the Indo-Pacific axis of Australia, India, and France (2018), and the three-sided coalitions such as the United States–India–Japan; India–Japan–Australia; Australia–India–Indonesia and Lacang-Mekong cooperation are the examples of minilateralism in the Indo-Pacific region. As scholars noted both the United States and China use minilateralism to address more challenging security issues for more exclusive, flexible, and functional security engagement (Cha, 2003; Singh and Teo, 2020).

For middle powers like India, Australia, Japan, and Indonesia, the tendency to seek minilateral arrangements are also a result of multilateralism’s loss of potency. The multilateral platforms were no longer sustainable and reliable. The ex-US President Donald Trump also rejected the multilateral rules-based order. The uncertainties during the Trump administration put the credibility of the US alliance system in managing security challenges in question. In light of this development, Australia and Japan pursued close strategic partnerships with other players such as India and Indonesia, to mitigate security challenges in the region. This resulted in Australia-India-Indonesia trilateral meeting which was initiated as a track-2 format in September 2013 and was developed for senior officials meeting in 2017 (Malik, 2013; Rajagopalan, 2021b). Another example is the Australia-France-India trilateral dialogue, which was initiated as a track 1.5 dialogue coordinated between three think tanks from the members and was advanced to a ministerial dialogue, of which the first edition happened in May 2021 (Ministry of External Affairs, India, 2021). With the government change in the United States, the strengthened partnership between Australia, India, and Japan grew into a quadrilateral arrangement, changing the texture and format of minilateralism and strategic partnership (Nilsson-Wright and Asia Programme, 2017). Since then, the issue or interest-based minilaterals, especially in the security sphere, have garnered widespread attention.

Minilateralism and the small states

Small states, especially the small island states, became more significant due to the role they can potentially play in minilateral engagements in the Indo-Pacific region. The islands are seen as objects that can be shaped and used in various ways to enhance major players’ strategic positions in terms of defence cooperation, joint military operations, and offshore facilities. Recently, Kurt Campbell, the US National Security Council coordinator for the Indo-Pacific, identified the Pacific as the theatre where Washington is most likely to see a ‘strategic surprise’ from China, reflecting that they are concerned about the possibility of China seeking to acquire military facilities in the Pacific, limiting United States influence in the region (Brunnstrom and Needham, 2022; Singleton, 2021). As such, the US Indo-Pacific Strategy report released in February 2022 emphasises how Washington should focus on every corner of the world and work with partners in the Pacific, Southeast Asia and the Indian Ocean. Following this strategic interest and the launch of the Quad plus in March 2020 show that small states can play a supporting role in the emerging minilateral platforms (Samaranayake, 2020). This also underlines that within minilaterals there is always interest in engaging with extra-regional partners, which are non-members of the minilateral at stake.

Small countries, on their part, acknowledge the challenges emerging from the competition between minilateral platforms but also acknowledge that these platforms provide room for new engagements to realise their foreign policy goals. For instance, countries like Sri Lanka, Mauritius and Seychelles have been careful to avoid using the Indo-Pacific rhetoric in their official policy document, so they do not seem inclined towards the United States-led alliance. Yet, they have participated in discussions with Quad countries at bilateral or minilateral levels. In 2020, the US Secretary of State Mike Pompeo and Sri Lanka’s then-Minister of Foreign Relations, Dinesh Gunawardane, discussed the possibility of deepening ties (U.S. Department of State, 2020). In February 2022, Mauritius and Seychelles participated in events such as Ministerial Forum for Cooperation in the Indo-Pacific held in France (Ministry of External Affairs, India, 2022).

One of the most popular strategies used by small states in responding to great power competition is to hedge between them to gain economic, political and diplomatic advantage from the competition. This is particularly evident in South and Southeast Asia. In South Asia, the island states of Sri Lanka and the Maldives are hedging between India and China by offering infrastructural development projects to both (Attanayake, 2021). In Southeast Asia, the smaller states are hedging between the United States and China, while in the western Indian Ocean, Seychelles and Mauritius are hedging between India and China (Litner, 2019; McDougall and Taneja, 2019; Shambaugh, 2020). Small island states’ approach to avoiding the use of Indo-Pacific rhetoric and emphasis on engaging with all powers is a result of this hedging strategy.

Thus, the future development around minilaterals can be expected to be a format similar to the Quad Plus. The main group of partners find opportunities to engage with other countries intra and extra-regionally.

The ‘new Quad’ in the Middle East

When the Foreign Ministers of India, Israel, the United States and the UAE met at a hybrid meeting in 01^st October 2021, the international media erupted with the news of a ‘new Quad in the Middle East’ (Burton, 2021; Rajagopalan, 2021a). The meeting, to which India’s S. Jaishankar and Israel’s Yair Lapid joined in person and US Secretary of State Antony Blinken and UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan joined online, ended with a decision to launch an international forum of economic cooperation to harness the ‘unique array of capabilities, knowledge and experience’ in jointly building infrastructure in transportation, technology, maritime security, economics, and trade (Bhaumik, 2021). A joint statement following the meeting emphasised that the group aims to tackle some of the most significant challenges confronting our world, focusing on joint investments and new initiatives in water, energy, transportation, space, health, and food security. While a trilateral engagement between Israel, the UAE, and the United States is viewed as a natural progression after the signing of the Abraham Accords in 2020, India’s inclusion in the grouping reiterated the growing strategic partnership between the United States and India, and Washington’s view of Delhi as the natural partner (Rajagopalan, 2021b; Zeeshan, 2021).

Fast forward one year, and the forum is re-launched as I2U2. During US President Joe Biden’s Middle East visit, the meeting, this time, was on the state leaders’ level. The joint statement after the meeting stressed the group’s desire to mobilise private sector capital and technologies to solve practical, shared challenges and trade and transit infrastructure, clean energy, waste treatment and critical and emerging technologies are being identified as priority areas (The White House, 2022). Contrary to the Indo-Pacific Quad, there was neither an overarching principled vision nor a unifying force binding the four members.

Even though analysts initially observed China or Iran as the common denominator, member states have differing relations with and perceptions towards these countries. While Iran is the common enemy of the United States and Israel, the UAE and India have been seeking ways to engage with Tehran (Misra, 2021). Similarly, even though the United States and India have equal concerns over China’s growing presence in the Middle East, the UAE and Israel have strong ties with Beijing. In 2020, Beijing will be among Abu Dhabi’s top trading partners. UAE partnered with Beijing to open a COVID lab in Abu Dhabi and conduct trials for a vaccine. The two countries jointly opened a facility to manufacture Personal Protective Equipment (PPE) kits in UAE When it comes to Israel, China is its second-largest global and the largest East Asian trading partner. According to American Enterprise Investment, Chinese Investment in Israel between 2005 and 2021 is close to US$13 billion. Chinese companies have invested some US$400 million in Israeli start-ups and some US$243 million in 2018 and 2019, respectively (Mitnick, 2020). Hence, even if Biden and Indian Prime Minister Narendra Modi may have wanted to confront China’s growing presence in multiple regions, it is clear that their Middle Eastern counterparts may not share the same interest.

Presence of the ‘new Quad’ in the Indian Ocean

In one of the frequently cited analyses, Robert Kaplan (2009) stated how the strategic enlargement of the United States, China, and India makes it challenging to keep the Indian Ocean peaceful. His work, titled ‘Center Stage for the Twenty-First Century Power Play in the Indian Ocean’, highlighted Sri Lanka’s confluence of the Arabian Sea and the Bay of Bengal, making the island nation an important ally for great powers (Kaplan, 2009). David Brewster (2015) also noted that the presence of the great powers in the Indian Ocean has also created a security dilemma in the Indian Ocean Region (I.O.R.), extra-complicating the region’s security. These scholarly examinations open a new venue of discussions on the Indian Ocean’s current security and strategic importance for new minilaterals, such as the ‘new Quad’, and also the potential that littoral states like Sri Lanka should explore via minilateralism. To unfold these discussions, two questions can be posed. First, to what extent does the new economic and political dialogue of the ‘new Quad’ focus on the I.O.R.? Second, can Sri Lanka enjoy minilateralism to strategise common interests of cooperation with this emerging grouping that would strengthen its position?

The ‘new Quad’ is already a, de facto, element of the Indian Ocean mainly because of the geographic territories of the member states. Yet, these members’ commercial interests also keep them intertwined in the I.O.R. India, the UAE and the United States all see the Indian Ocean as their main trading ocean (Zeeshan, 2021), and aspire to further strengthen and extend their Indian Ocean maritime trade. Strategically, the United States and India are the two foremost powers of the security and defence ecosystem of the I.O.R. The UAE is an oil-rich nation bordering the I.O.R., and its diplomacy demonstrates its willingness to expand cooperation with neighbouring elements of the I.O.R.

Among its four states of members, India is the actual key resident power in the I.O.R. As Scott (2006) examines, the hegemonic presence of India in the Indian Ocean is pre-historical. Very few states in the world geographically dominate an ocean. Kavalam Madhava Panikkar, a veteran Indian diplomat, claimed several decades back, the Indian Ocean remains truly Indian (cited in Scott, 2006: 97). Up until now, India has made certain foreign policy decisions based on this long-term image of the Indian Ocean. Brewster (2018) also highlights India’s hegemonic presence in the Indian Ocean. India’s attempts to be a dominant power in the I.O.R range from complex threats posed by Pakistan; to the Chinese Belt and Road initiative that extends into the region via both land and sea routes, and even to the presence of extra-regional great powers like the United States and Russia in both trade and security realms. In a number of international forums, India has expressed its keen interest in full involvement in the ‘new Quad’, which led to India’s friendly cooperation and trade and security affiliation with the states adjacent to the Western Indian Ocean region (Mohan, 2022).

The second actor of the ‘new Quad’ which is United States has been quite determining in the Indian Ocean Region. It is noted that Washington’s affiliation with the Indian Ocean has historical reasons such as trade and security. The Indo-Pacific Strategy confirms the United States’ interest in safeguarding the Indian Ocean maritime trade route, particularly the strategic choke points such as the Strait of Hormuz and the Strait of Malacca, connecting to the South China Sea (Wilson, 2018). Together with India, the United States has been trying to counterbalance China seeking autonomy in the South China Sea, with its strategic presence in the I.O.R. This strategic presence is augmented by mutual trading and security enhancements of two powers in the Indian Ocean. This is accepted by the scholarly literature as well (Kapur, 2006), that India is strategizing regional balancing of power with the support of the United States

The United States acts as a pivot linking the I.O.R. to the Middle East with the ‘new Quad’. The United States’ strategic and historical ties with Israel and UAE’s developing strategic partnership with Israel, which has been spilt over to energy cooperation and trade make the ‘new Quad’ inevitable. The four countries’ partnership has been expanding into the areas like blue economy, energy security and climate change. India and UAE, however, already signed a Comprehensive Strategic Partnership Agreement in 2017 to engage in trade and development (Ministry of Commerce and Industry, Government of India, 2022). The comprehensive Economic Partnership Agreement (C.E.P.A.) in 2022 made the two countries successive economic partners (Kumaraswamy, 2021). With these bilateral and minilateral engagements, the member states of the ‘new Quad’ are bolstering their influence across regional affairs of the Middle East and South Asia.

Sri Lanka’s ties with the ‘new Quad’ members are both historical and unique. Examining, India-Sri Lanka ties, Sri Lanka is situated proximately to India’s southern borders. The country has maintained exclusive relations with India for centuries, in cultural, geographic, diplomatic, security, maritime, trade, and many other realms. India is the second largest trade investor in Sri Lanka, showing India’s close trade affiliation. Sri Lanka’s bilateral relations with the United States are quite formidable as well. Since its independence in 1948, Sri Lanka has had extremely close trade relations with the United States Sri Lanka’s open economy was first and fore mostly embraced by the United States Sri Lanka is also one of the largest recipients of US foreign aid for its development sector (U.S. Department of State, 2022). The current geopolitical tension made these two bilateral engagements quite significant for the diplomatic, strategic and commercial affairs of the I.O.R.

The other two members of the ‘new Quad’, that is, Israel and the UAE, have had some effective trade relations with Sri Lanka. Sri Lanka’s geostrategic location makes it critical for the maritime trade routes from the Arabic sea to the Indian Ocean, which maintained a very important relationship between the Western and Eastern hemispheres. The maritime route passes through many other vital seas, including the Mediterranean Sea, which shares the territorial boundary of the Arab Peninsula and links some other strategic commercial maritime lanes such as the Suez Canal, the Red Sea, entering the Indian Ocean, and Sri Lanka at the heart of the Indian Ocean. This world-famous maritime sea lane has spontaneously made Sri Lanka so important to the Middle East.

Historically, Sri Lanka has been an exotic transit point for travellers on the medieval maritime trade route that linked the Arab world to the Indian Ocean. Sri Lanka (known historically as Serendib, Taprobane, and under the British occupation as Ceylon) traced trade affairs with the Middle East since the 16th century, when more Arab travellers arrived in the Indian Ocean Region. As literature examines Arab ‘traders’ settlements on the Western coast of Sri Lanka that goes back to the history of 1000–1500 AD (McGilcray, 2008). At present, Sri ‘Lanka’s Middle Eastern affairs including diplomatic ties and trade ties have a prominent outlook. Sri Lanka has stood up for the independence of the Arab world, and some of these diplomatic interventions made by Sri Lanka have even received wider international attention (Bishku, 2020). When Israel was formed in 1948, many Muslim communities were displaced to neighbouring states, and Sri Lanka stood for Palestine’s freedom and the rights of Arabs. One of the former Prime Ministers of Sri Lanka, S.W.R.D. Bandaranaike supported Egyptian President Gamal Abdel Nasser’s economic policy of nationalisation and the nationalisation of the Suez Canal Company in the late 1950s. Sri Lanka’s active participation in the Non-Alignment Movement showed their competency in strategising non-aligned foreign policies of states that seek non-influence from the Cold War superpowers’ competition (Kodikara, 1973).

Sri Lanka and Israel’s diplomatic ties go back to 1956. Sri Lanka has become one of the largest exporters of Ceylon tea to Israel. According to government sources, nearly 7000 Sri Lankans work in the caregiving sector in Israel (Embassy of Sri Lanka, Israel, n.d.-b). During its civil war (1983–2009), Sri Lanka tightened its trade relations with Israel as it imported weapons to be used in the armed forces. Making the trade ties a significant outcome, several Israeli private companies are currently operating in Sri Lanka. According to government sources reported in the year 2021 (Embassy of Sri Lanka, Israel, n.d.-b), current Israel’s investments in the private sector have a total investment value of around US$1.5 million. Despite Sri Lanka’s non-alignment preference, it has historically stood for the solidarity of Muslims in Palestine; the country has also been able to balance bilateral ties with Israel. At diplomatic conferences, one of the former Prime Ministers of Sri Lanka, Ratnasiri Wickramanayake, once stated that the two ‘countries’ long-lasting cooperation is related to combating domestic terrorism (Jayasinghe, 2010). It could also be realised how ties between the two states have been improving since the end of the civil war in Sri Lanka (2009), and it is reported in some of the international delegations – Yahel Villian, the Deputy Head of the Israeli Mission in India, said, ‘Relations between Israel and Sri Lanka have never been better than this before’. (Embassy of Sri Lanka, Israel, n.d.-a)

Besides the bilateral trading between the UAE and Sri Lanka, there are some vital developments. Since the establishment of diplomatic relations between the two countries in July 1979 and the establishment of the Consulate General in 1999, the two countries have entered into solid trade and investments. An estimated 175,000 Sri Lankans currently stay in the UAE, including the majority of migrant workers employed as housemaids and in both skilled and non-skilled labour categories (Ministry of Foreign Affairs and International Cooperation, UAE, n.d.). The bilateral trade between the UAE and Sri Lanka stood at US$1.34 billion in 2017, making Ceylonese tea a significant export commodity in the Middle East (Ministry of Foreign Affairs and International Cooperation, UAE, n.d.). In contrast, petroleum products are the major imports to Sri Lanka. It is noted how some of the bilateral links are formed to cooperate and support the two countries on environmental issues, particularly Sri Lanka’s interest in foreign investment projects for the disposal of solid waste and forest conservation. There is also bilateral cooperation in civil aviation, with increased flights between the two countries due to a large number of travellers (Ministry of Foreign Affairs and International Cooperation, UAE, n.d.). The UAE has stood by Sri Lanka positively during some critical times, such as during the civil war and aftermath, supporting the Sri Lankan Muslims and providing aid to relief efforts in several disaster situations. The UAE had offered humanitarian aid, such as in 2004, when Sri Lanka was affected by the tsunami, and provided emergency aid and various forms of assistance to overcome the humanitarian crisis during and after the civil war, particularly targeting the Muslim communities. During the COVID-19 pandemic, the UAE became an aid distributor to Sri Lanka, to which it sent off medicine and medical supplies on several occasions (Badam, 2022). A sizable portion of Sri Lanka’s income comes from the remittances that migrant workers send home. It was observed that during the Pandemic, Sri Lanka was negatively impacted by foreign remittance earnings as a result of job losses and the suspension of travel to Middle East. While appreciating the trade links and other bilateral affiliations between Sri Lanka and the UAE, the two states are interested in further cooperation to strengthen the blue economy strategy of the Indian Ocean – they are member countries of the Indian Ocean Rim Association (IORA).

Sri Lanka: Use of ‘minilateralism’ for issue-based engagement

With the prevalence of minilaterals addressing a variety of common issues, their focus has also been expanded to engage with partners outside their small-sized membership structures. One significant example is the ‘Quad Plus’, which was designed to enable the Quad members to coordinate with diplomats from non-Quad allies and partners to address and respond to common issues. In March 2020, the US Deputy Secretary of State Stephen Biegun and his Quad partners began an initiative to coordinate with diplomats from South Korea, New Zealand, and Vietnam about responses to the COVID-19 pandemic. In May 2020, the Quad Plus was extended to Brazil and Israel (Parulekar, 2020). Following these developments, some scholars have contended that island states like Sri Lanka have the potential to engage with the United States, India, Australia, and Japan in a Quad Plus format (Samaranayake, 2020). However, common themes and needs for the non-member countries who want to be a partner of the Quad Plus.

Discussing the potential for Sri Lanka to engage in a Quad Plus format, Samaranayake (2020) notes that given its strengths and limitations, Colombo has the potential to play a supporting role. While this supporting role is facilitated by Sri Lanka’s strengths, it is equally determined by its limitations. Considering how two of the members of the Quad are also members of the I2U2, and considering how Israel has also been invited for the Quad Plus dialogue, similar engagement for cooperation can be expected to be born from the Middle Eastern ‘quad’. As such, a similar analysis framework for analysis can be used to understand Sri Lanka’s potential to engage with the I2U2 on an issue-based engagement.

As discussed in the previous section, the I2U2 focuses on non-military issues such as maritime safety, energy and food security, free transportation, and technological and infrastructural gain for collective dialogue. According to the Indian Ministry of External Affairs, the group encourages joint investments in mutually identified areas such as water, energy, transportation, space, health and food security (Press Trust India, 2022). Accordingly, the UAE announced that it will invest US$2 billion to develop a series of integrated food parks and that the United States will invest US$330 million on a hybrid energy project in India respectively (Kumaraswami, 2022; Nation World, 2022). Hence, engagement within the energy, transportation and transit infrastructure, waste management, and food security frameworks can be Sri Lanka’s way forward in engaging with the I2U2.

In 2022 Sri Lanka experienced one of its worst energy crises caused by the dip in foreign reserves. Even though Sri Lanka has reached 100% electricity accessibility and almost 99.9% electrification, uninterrupted power supply has become far from reality due to scheduled power cuts caused by fuel shortages (The World Bank, 2022). According to the United Nations (2018), Sri Lanka is still facing challenges in providing affordable, accessible and reliable energy services. While thermal power (petroleum and coal) made up about 54% of the primary energy supply, high generation cost, increasing dependency on fossil fuel add to the country’s fiscal burden. As the energy crisis continued to unfold, Sri Lanka sought investment from Middle Eastern countries in the petroleum sector. In this regard, Sri Lanka reached out to Saudi Arabia for a loan and long-term credit facility for the supply of crude oil, gas oil, gasoline, jet A-1 and energy gas (Arab News, 2022). However, this will only provide a temporary solution to the country’s energy crisis.

Amid this backdrop, I2U2 opens an opportunity for Sri Lanka to address its energy crisis by engaging closely with UAE and Israel to meet its energy requirement. Three members of the grouping, except the United States, provide potential partnerships for Sri Lanka to seek investments in the energy sector – both in traditional non-renewable and renewable energy. Particularly, India has a history of investing in Sri Lanka’s energy sector. In 2003, Indian Oil Corporation became the first and only private oil company to operate a retail fuel station in Sri Lanka by marketing petroleum products and bulk supplies to industrial consumers (IndianOil, n.d.). Since then, it has been running 14 oil storage tanks in the World War II–era oil tank storage facility in Trincomalee. In January 2022, the Sri Lankan government entered into an agreement with the Lanka Indian Oil Corporation, the subsidiary of IOC, to develop 61 remaining tanks (Srinivasan, 2022). Following identifying over 1 million barrels of oil and natural gas resources in a 30,000 square kilometre area in northern waters in Sri Lanka,¹ Carin India entered Sri Lanka’s energy sector in 2008 to explore crude oil and natural gas. While test wells produced natural gas; the company exited the exploration activities in 2015 due to low crude oil and natural gas prices (Madies, 2019).

In 2019, Sri Lanka held international bidding to explore the products in the Gulf of Mannar and Cauvery Basins. Based on the initial data and regional studies, Sri Lanka’s Petroleum Resource Development Secretariat estimates the Mannar basin alone could have the potential to generate 5 billion barrels of oil and 9 trillion cubic feet of natural gas, which would be sufficient for Sri Lanka’s energy needs for the next 60 years (International Trade Administration, 2021; Parliament of Sri Lanka, 2021).

As of now, the situation in the global petroleum industry and Sri Lanka’s energy sector has changed. The increased price of oil and gas due to the Ukraine crisis greatly impacts Sri Lanka’s energy crisis (Chellaney, 2022; Shih, 2022). In this context, Sri Lanka has the potential to get investors back to explore its petroleum resources, and the UAE, Israel and India will be ideal partners.

In the meantime, Sri Lanka also has the potential to explore the possibility of a partnership with the I2U2 in the renewable energy sector, facilitating the reduction in reducing the cost of energy generation and achieving its clean energy targets. Sri Lanka has reiterated the importance of reducing its reliance on imported fossil fuels such as coal and oil for electricity generation Asian Development Bank (2019). To diversify its electricity generation portfolio, Sri Lanka has obtained an investment from an Indian company, Adani Green Energy, to build two solar power stations. Taking this as a foundation, Sri Lanka can reach out to I2U2 partners, particularly Israel and the UAE, to invest in renewable energy technologies in the island nation. Both Israel and the UAE are moving ahead with transforming sustainable energy systems (Ersoy et al., 2021; Global Data Energy, 2022). Both countries are committed to accelerating the clean energy component in their energy consumption portfolio. As a result, they invest in developing technologies capable of achieving this target.

The I2U2 grouping has expressed the intention to mobilise private sector capital, technology and expertise that would help modernise the infrastructure and create low-carbon development pathways for the industry (The White House, 2022). Companies from the United States and Israel will offer innovative solutions. The programme will incorporate climate-smart technologies that help reduce food wastage, conserve fresh water and use renewable energy (Suri, 2022). Hence, it opens up an opportunity for Sri Lanka to engage on the issue of sustainable energy needs with the grouping.

While Sri Lanka has long discussed the importance of improving trade and transit connectivity between South and Southeast Asia, the connectivity with the Middle East has been less discussed (Wignaraja, 2017; Weerakoon and Perera, 2014). Even with improving connectivity between South and Southeast Asia, its efforts have been limited and confined primarily to bilateral and regional trade agreements. Sri Lanka utilises its connectivity links with India to expand its network to the Middle East via the I2U2 initiative. Even though the country experienced a significant improvement in gross domestic growth after the end of the war in May 2009, that growth has not been sustainable. Sri Lanka’s current economic crisis reiterates the importance of diversifying its export industry and market.

As Sri Lanka continues to outline its intention to promote itself as a strategic hub in key areas such as maritime, aviation, commerce and knowledge, there is untapped potential to be realised with its cooperation with I2U2 plus framework to improve its physical infrastructure in this regard. Even though the post-2009 state-sponsored mechanism has managed to develop basic infrastructure, including a road network, which reached the density of 98%, according to the International Finance Corporation’s prediction in 2018, Colombo requires around US$326 million worth of investments to catalyse a model shift towards mass public and logistics transport based on the belief that special economic zones and similar ports can boost economic development (International Finance Corporation, n.d.).

As Sri Lanka attracted investment from India for its Western Container Terminal in the Colombo port, and as India is seeking to enhance its trade and transit links with Israel and UAE, Sri Lanka can see how it can be a supportive partner in connecting ports. Colombo’s geographic position at the centre of the Indian Ocean shipping lanes and the records of its recent development in the port industry makes it an attractive partner for these countries.

Conclusion

A key feature of minilateralism is prioritising practical cooperation over ideological and normative decision-making. As such, the minilateral forums aspire to address common issues with respective partners despite having normative differences. The I2U2 or the ‘new Quad’ in the Middle East will be one of the best examples of this nature.

Even though the four countries lack a common thread to be bound together, like in the case of the Quad, which is grouped against China, practical cooperation is seemingly proven sufficient to sustain the grouping. The ‘new Quad’ provides opportunities for other countries like Sri Lanka to engage with the partners without having to jeopardise their diplomatic relationships.

In a Quad Plus context, China has been the common denominator for the Quad countries to engage with Sri Lanka, whose location has been an enviable point for interaction for many countries. Its central positioning in the Indian Ocean region and China’s growing interest has been both an opportunity and a challenge. It is undeniable that India and the United States will continue to balance emerging great power competition in the Indian Ocean that may occur with China’s One Belt One Road initiative. Sri Lanka becomes a crucial territory for this particular power play. This has primarily led India and the United States to increase their engagement with Sri Lanka.

Sri Lanka currently remains one of the largest recipients of Chinese development loans and a partner in China’s Belt Road Initiative. Even though statistically challenged, the narrative on China’s debt trap diplomacy in Sri Lanka still gains significant leeway (Brautigam, 2019). With the outbreak of Sri Lanka’s current financial crisis, China scrutinised their policy on lending investment loans to small states in the Belt Road Initiative. Speaking at a gathering in New Delhi, Chief Administrator of the US Agency for International Development (USAID) Samantha Power criticised Chinese passive action towards Sri Lanka’s financial crisis (Ghosal, 2022). Such instances are exemplary for small states like Sri Lanka to diversify their investments with other trading partners. It was also realised India’s rapid action to expedite their credit line for importing essential goods to Sri Lanka, being the first bilateral lender in the ongoing financial crisis.

Nevertheless, this has put Sri Lanka in a difficult position, since it does not want to jeopardise its relationship with China. However, China does not play the same unifying factor for the I2U2 countries; hence it will not be the point of dialogue for Sri Lanka to engage with the Middle Eastern ‘new Quad’. Sri Lanka has already energised trade and diplomatic relations with the two dominant members of the ‘new Quad’, that is, Israel and the UAE, indicating its future ties for energy security, food security, and skilled migration. Being among states that could look beyond mere power dynamics, the two countries also are useful in order to take advantage of the minilateral scheme of issue-based engagements. Israel and the UAE are the two most significant Middle Eastern partners for Colombo to build further relations. Also, for a small state like Sri Lanka, which has already experienced a debt crisis and crucial strategic tension in the Indian Ocean, this would be a prudent investment in diversifying its diplomatic affairs with other regional powers. Therefore, to deepen its engagement with the I2U2, Sri Lanka still needs to identify and clarify the common issues with the Middle Eastern members of the ‘new Quad’.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Chulanee Attanayake

Notes

Author biographies

Chulanee Attanayake is a Research Fellow at the Institute of South Asian Studies, National University of Singapore. Her research focuses on China’s politics and policies in South Asia, Indo-Pacific Geopolitics, Small States, and Sri Lanka’s politics and foreign relations.

Menik Wakkumbura is a Senior Lecturer at the Department of International Relations at the University of Colombo, Sri Lanka. Her key specialisation areas are International negotiations, Peacebuilding, International Security, and Diplomacy.

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