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Forbes: Lanka, Pakistan and Maldives among biggest debt burdens to China
Sri Lanka, Pakistan and Maldives in South Asia stand neck-deep in the Chinese debt. Pakistan has $77.3 billion of external debt to China while Maldives amounted to 31 per cent of Maldives’ Gross National Income (GNI). Maldives’ total debt amounts to MVR 86 billion by the end of 2020, MVR 44 billion of which is external debt, said a report by the Forbes.
Forbes, collecting data from The World Bank report as of 2020, says that 97 countries across the globe are under Chinese debt. Countries heavily in debt to China are mostly located in Africa, but can also be found in Central Asia, Southeast Asia and the Pacific.
China is reaching most of the countries under the One Belt and Road scheme. The world’s low-income countries owe 37% of their debt to China in 2022, compared to just 24% in bilateral debt to the rest of the world.The Chinese global project to finance the construction of the port, rail and land infrastructure across the globe, has been a major source of debt to China for participating countries.
Those with the highest external debt to China are Pakistan $77.3 billion, Angola at 36.3 billion, Ethiopia $7.9 billion, Kenya $7.4 billion and Sri Lanka $6.8 billion.
Maldives newspaper reported that according to statistics released by the Finance Ministry, Maldives’ debt rose to MVR 99 billion by end of Q1 2022. It made up 113 per cent of GDP. The projects in the Maldives funded with loans from China include the construction of the Sinamale Bridge and the airport development project.
Bangladesh too is a part of China’s Belt and Road Initiative. Dhaka owes 6 per cent of its total foreign debt to Beijing, which is around $4 billion. According to a report from FT, Bangladesh is seeking a first instalment from the IMF of $1.5 billion, as part of a total package worth $4.5billion.” This amount would include a financial line to help it fund climate change resilience projects and buttress its budget,” reads the report. According to the IMF, Bangladesh had a total foreign debt of $62 billion in 2021. The majority of the debt is owed to multilateral lenders such as the World Bank.
The countries with the biggest debt burdens in relative terms were Djibouti and Angola, where debt to China exceeded 40% of gross national income, an indicator similar to GDP but also including income from overseas sources.The equivalent of 30% of GNI or more in Chinese debt affects the Maldives and Laos, with the latter just having opened a railway line to China which is already causing debt issues for the country.
Sri Lanka May 2022 was the first country in two decades to default on its sovereign debt. Chinese debt to Sri Lanka was the fifth-highest overall in late 2020 and amounted to 9% of the country’s GNI. According to the Financial Times, which called the development in Sri Lanka and elsewhere China’s first overseas debt crisis, the country had to renegotiate loans worth $52 billion in 2020 and 2021—more than three times the amount that met this fate in the two previous years.
China has provided record amounts of financing to developing countries over the past two decades, supporting both public and private sector projects. The Belt and Road Initiative is President Xi Jinping’s flagship foreign policy initiative; launched in 2013 to invest in almost 70 countries and international organizations, it has propelled China to global dominance in international development finance.
China’s Belt and Road Initiative has caused dozens of lower- and middle-income countries to accumulate $385 billion in “hidden debts” to Beijing, a new study has claimed.AidData, an international development research lab based at Virginia’s College of William & Mary, says 13,427 Chinese development projects worth a combined $843 billion across 165 countries, over 18 years to the end of 2017.
China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. China rejects this criticism and calls it as “propaganda/narrative of the vested interested countries” to tarnish its image.
News
Ex-SriLankan CEO’s death: Controversy surrounds execution of bail bond
Prof. Prathibha Mahanamahewa has emphasised the need to examine the circumstances under which the court staff executed the bail bond, and the release process, in respect of the late Kapila Chandrasena, former Chief Executive Officer of SriLankan Airlines.
Chandrasena’s body was found in a house at Pedris Road, Colombo 03.
In case of any doubt regarding bail condition/s or any other matter (insufficient surety, identity issues, suspicious documents and unclear order), the Registrar had to get in touch with the relevant Magistrate, Mahanamahewa said.
Mahanamahewa was responding to The Island query regarding the acceptance of two Muslims as sureties. Had they followed the time-tested procedure, court registry/registrar staff would never have accepted sureties as blood relatives of Chandrasena, Mahanamahewa said, alleging a major defect in the execution of the bail bond.
They were arrested by police and remanded by the Colombo Magistrate’s court, till 13 May, pending further investigations.
Colombo Chief Magistrate Asanga S. Bodharagama, on 5 May, granted to Chandrasena cash bail of Rs. 500,000 and three surety bails of Rs. 10 million each. But soon after Chandrasena received bail, the court was told that two of the Rs. 10 million sureties had been produced, after payment of Rs. 15,000 each, were made to those two individuals to act as guarantors.
The bail application had been submitted by Rienzie Arsecularatne, PC, appearing on behalf of Kapila Chandrasena, when the case was earlier taken up, on 28 April.
Police also arrested an elderly person who arranged for the two persons who hadn’t even seen Chandrasena, even once, to offer themselves as sureties.
As soon as the police revealed the fraudulent manner Chandrasena obtained bail, Chief Magistrate Bodharagama issued an order to arrest and produce him before the court. This order was issued consequent to a request made by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), on the grounds that the defendant had violated bail conditions. The CIABOC wanted Chandrasena held pending the conclusion of the case.
Sources familiar with the execution of bail bond said that the moment the suspects had submitted their National Identity Cards and letters from Grama Sevakas, the court registry/registrar staff should have rejected them. In a such high-profile case, the failure on the part of the lawyers, representing Chandrasena, to check the gsureties’ relationship with Chandrasena, was another glaring shortcoming, sources said, pointing out that after having submitted bail application on 28 April, the defence team should have come prepared to put forward genuine guarantors.
The Island contacted the Bar Association of Sri Lanka for comment on the manner in which the court staff had handled bail for Chandrasena, but there was no response.
Sri Lanka’s former Ambassador to Moscow, accredited to Kiev, Udayanga Weeratunga, said that a thorough investigation should be conducted to ascertain facts about the execution of the bail bond. Asked whether he had been in touch with Chandrasena, Weeratunga said that he spent his first day at Welikada with Chandrasena and Ranjan Ramanayake in one cell. “That happened on 14 February, 2020. I was arrested when I returned to the country, from the UAE, and produced before the then Magistrate Ranga Dissanayake, the incumbent Director General of CIABOC,” Weeratunga said.
Weeratunga said that a couple of months after the change of government in 2024, the US State Department imposed a travel ban on him and Chandrasena and their families over what the US termed as significant corruption.
Weeratunga said that altogether the US designated 14 persons and, of them, two were Sri Lankan, who happened to be him and Chandrasena, accused of corruption in respect of acquisition of MiG 27s from Ukraine and the Airbus deal, during President Mahinda Rajapaksa’s tenure as the President.
SLPP sources said that Chandrasena’s demise shouldn’t prevent proper investigation on his affidavit that claimed pressure brought on him to name Mahinda Rajapaksa as a recipient of the Airbus bribe.
By Shamindra Ferdinando
News
Law applies to all, regardless of power or influence – Prez
President Anura Kumara Dissanayake emphasised yesterday (12) that the law would be enforced equally and no one was allowed to be above the law.
Addressing the Matale District Coordinating Committee meeting, at the Matale District Secretariat, President Dissanayake said, “Do not be afraid to work, but be afraid to engage in irregularities. Everyone must first be subject to the law and secondly, must fear the law. This applies to everyone, from the President down to the Grama Niladhari.”
“If we are to usher in a new era, we must submit to the rule of law. No one can be above it, he said, adding that previous Presidents had even violated the Constitution with impunity.
The President said that if there were any instances of selective law enforcement, they should be brought to his attention for action. Everyone was required to cooperate, if called upon to make statements in an investigation, he said.
By S.K. Samaranayake
News
Sri Lanka and Belarus to sign several MoUs
Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, is on an official visit to Belarus, from yesterday to Friday (15), on the invitation of the Foreign Minister of the Republic of Belarus, Maxim Ryzhenkov.
The text of the Foreign Ministry release: “This visit will mark a milestone in the bilateral partnership as the two countries commemorated the 25th Anniversary of the establishment of Diplomatic Relations last year.
During his visit to Minsk, Minister Herath will call on Belarus President Alexander Lukashenko and will hold bilateral discussions with the Minister of Foreign Affairs of Belarus. Minister Herath is also scheduled to meet the Belarus Ministers of Education and Health. Several MoUs and agreements across sectors are envisaged to be signed with the Republic of Belarus during the visit.
In Minsk, Minister Herath will address a business and tourism roundtable, organised by the National Export Centre of Belarus. He is also scheduled to meet Sri Lankan students studying in Belarus.”
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