The debt trap of Sri Lanka; should others worry? CFA india Apr 7, 2022 https://www.youtube.com/watch?v=oUmjElf_dCY Don't believe in those who offer cheap money. Sri Lanka is learning it the hard way. Concludes that it is high time that the world rethinks it financial architecture.
The role China played in pushing Sri Lanka into a debt trap & what India can do to help
Maj. Gen Ashok Kumar https://www.msn.com/en-in/news/opinion/the-role-china-played-in-pushing-sri-lanka-into-a-debt-trap-what-india-can-do-to-help/ar-AAVZfNx?ocid=uxbndlbing While every nation is supposed to diversify its exports and scale them up, Sri Lanka held itself hostage to colonial-era exports of garments, rubber and tea, failing to invest in any major industries, education or training. China is currently involved in more than 50 projects in Sri Lanka, their nature and execution are alarming, to say the least. These are Hambantota and Colombo Port City, both of which have been given for 99 years of lease to China.
When, COVID hit, Srilanka stopped importing fertiliser and agricultural inputs. Some blame .. propagating a "pseudo-scientific and untested" theory of organic farming for large-scale commercial plots, advising bạn on urea imports to save forex. While organic farming, per se, may not be a bad idea at an opportune time, its abrupt adoption nationally affected grain production adversely, especially at a time when the Sri Lankan economy was already under serious stress.) The current situation would not have become so alarming had Sri Lanka had enough grain to feed its population. In fact, the availability of surplus grain stock in the country offered the best response mechanism to the Narendra Modi government to feed its population during the same time.
Comment: In a recent meeting with the PM, much was made of the so called sops to the poor by State governments as a possible route to prevent a Sri Lanka type situation. However the main issue of handing over infrastructure to private sector, particularly foreign entities, or corporate entities which could be later bought out by foreign entities, is not being evaluated!
Is Sri Lanka Really a Victim of China’s ‘Debt Trap’? https://thediplomat.com/2019/05/is-sri-lanka-really-a-victim-of-chinas-debt-trap/
Sri Lanka’s debt crisis and Chinese loans – separating myth from reality. y Umesh Moramudali
May 14, 2019
It is true that the EXIM Bank of China funded the construction of Hambantota port and the project certainly was not an economically sensible decision at the time given the fiscal constraints of the economy. (Comment: In India, we have such funding for projects like the bullet train )
Sri Lanka’s debt problem goes well beyond China. It is related to a change in foreign debt composition and structural weaknesses of the economy, such as an overall reduction of trade, the rise of protectionism, and the reduction of government revenue.
It is true that, thanks to financing a number of infrastructure projects, the portion of Sri Lankan foreign debt owned by the Chinese has increased drastically during the last decade or so. From 2008 to 2012, approximately 60 percent of foreign borrowing has come from China.