BUSINESS

Is Sri Lanka falling prey to the “China debt trap”?

Staff Writer

Colombo (News 1st) – Analyst, politicians and Civil society activist in Sri Lanka have time and time again raised concerns regarding Chinese projects initiated in Sri Lanka saying that the country is falling prey to a Chinese ‘debt trap’

However, speaking at a Chinese Foreign Ministry media briefing a spokesperson of the Ministry played down the allegations. China’s ‘Belt and Road Initiative’ has been the subject of concern as a number of countries which received investment under the program have begun to grumble about falling prey to a Chinese Debt Trap.

Chinese projects in Sri Lanka have drawn similar concerns.

Last year the Hambantota port which was a geographically strategic port was leased over to the Chinese on a 99-year lease deal, based on the countries inability to repay the loans obtained for the 1.4 Billion USD project.

Defending the multi-billion dollar trade and infrastructure project a spokesperson for the Chinese Foreign Ministry said there is no such thing as Debt trap for the Hambantota Harbor. She quoted statistics from Sri Lanka’s Central bank to show that Chinese loans only amounted to around 10% of the countries foreign debt in 2017.

She went on to say that therefore Sri Lanka’s main debt burden is not caused by Chinese loans.

However is this statement objectively true? Are the concerns raised by a number of international countries as well as local experts merely a farce?

Malik Cader the former Advisor to the Ministry of Finance spoke to News1st regarding this. He states that this figure in his opinion is camouflaged or might be even manipulated and does not have any merit.

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