According to reports, Samantha Power, the administrator for the US Agency for International Development (USAID), said on 27 July that China has provided Sri Lanka with “opaque loan deals at higher interest rates than other lenders” and financed infrastructure projects that often-served little practical use over the past 20 years. Further she added that “The biggest question of all is whether Beijing will restructure debt to the same extent as other bilateral creditors,” and “it is really essential that Beijing participate in debt relief transparently and on equitable terms with all other creditors.”
Foreign Ministry Spokesperson Zhao Lijian’s said during his regular press conference on 28 July 2022, that China-Sri Lanka practical cooperation has always follows the principle of being Sri Lanka-led. All cooperation projects have gone through scientific planning and thorough assessment and are never attached with any political strings. The cooperation has contributed to Sri Lanka’s economy and brought tangible benefits to the Sri Lankan people. Sri Lanka’s foreign debt is made up of multiple components. The share of China-related debts is far lower than that of the international capital market and multilateral development banks. Besides, China mostly extends to Sri Lanka preferential loans with low interest rates and long-term maturity, which have helped improve Sri Lanka’s infrastructure and livelihood. Shortly after Sri Lanka’s announcement to suspend international debt payments, Chinese financial institutions reached out to the Sri Lankan side and shown full readiness to find a proper way to handle the matured debts concerning China and help Sri Lanka to overcome the difficulties.
Further Zhao Lijian stressed that the global economic and financial markets have suffered enormously as a result of the US’s recent sudden interest rate hike and balance sheet reduction, which have rapidly siphoned off dollars on top of the US’s long-running quantitative easing policy and irresponsible massive stimulus. The US’s wayward unilateral sanctions and tariff barriers have undermined the security of global supply and industrial chains, and worsened the price surge of energy, food and other bulk commodities. This has further aggravated the economic and financial condition of developing countries including Sri Lanka. US and other Western capital speculation in Sri Lanka and manipulation of the credit rating of the country seriously undermined Sri Lanka’s financing credibility and channels. The US should ask itself: What has it done for the sustainable development of developing countries like Sri Lanka? What harm have US unilateral economic, financial and foreign policies brought to other countries? We hope the US will genuinely help Sri Lanka overcome the current difficulties, ease debt burden and realise sustainable development, instead of unscrupulously latching onto every opportunity to shift the blame, smear other countries and advance geopolitical contests.
“it’s not fair to blame China for underperforming investments,” for instance, the Hambantota Port’s failure is mainly because Sri Lanka was lacking in areas of market power, marketing skills, technological expertise, international financing, and an international cooperation network. Since China Merchants Port Holdings Company Limited (CMPort) undertook the Hambantota Port to operate in 2017, it has witnessed remarkable growth, and cargo volumes at the port are also steadily on the rise. Several manufacturing enterprises are already being set up in the Hambantota Port Industrial Park such as a US$ 58 million yacht building facility, by SeaHorse Yachts (Pvt) Ltd., a US$ 15 million plug and play park-in-park facility by Shenzhen Xinji Group, The US$ 300 million tire manufacturing plant by Shandong Haohua Tire Co. Ltd, etc.
These are some of the BRI projects in Sri Lanka: the Colombo-Katunayake Expressway, Southern Expressway, Outer Circular Highway, Hambantota Port, Bunkering Facility and Tank Farm in Hambantota Port, Hambantota Port Industrial zone Project, Reconstructed Kandy- Jaffna A9 Road, Mattala Airport, Norochcholai Lakvijaya Power Plant, Colombo International Container Terminals (CICT), Colombo Lotus Tower – Telecommunication Tower, Matara – Kataragama Railway Extension, Moragahakanda Irrigation Development Project, Water Supply and Sewerage Project in Greater Kurunegala, and many other water projects, ongoing Athurugiriya-Kelaniya Elevated Highway Project, etc.
Moreover, China also gifted and fully financed prominent landmarks such as the Bandaranaike Memorial International Conference Hall (BMICH), Bandaranaike Centre for International Studies (BCIS) building, the Supreme Court Complex, A nine-storied wing at Lady Ridgeway Hospital, Nelum Pokuna Theatre, National Nephrology Specialist Hospital, Outpatient Department of The National Hospital of Sri Lanka, etc.
“People are seeing tangible changes through the BRI and improving infrastructure and creating jobs have immensely benefited the Sri Lankan people.”“China has always been a reliable friend and partner of Sri Lanka.” The friendly relationship between China and Sri Lanka benefits the development of both countries and serves the fundamental interest of both peoples.
About the Author:
Maya Majueran currently serves as a Director of BRISL, an independent & pioneering Sri Lankan-led organisation, with strong expertise in BRI advice and support. Maya can be contacted at: email@example.com
By Maya Majueran