Connect with us

News

Forbes: Lanka, Pakistan and Maldives among biggest debt burdens to China

Published

on

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.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

Businesses can collapse due to electricity tariff increase next year– Patali

Published

on

Patali Champika Ranawaka

The Cabinet has approved increase in electricity tariffs in two stages in January and June 2023.

The disclosure was made on Tuesday (29) at a meeting of the Sub Committee on Identifying the Short & Medium-Term Programmes, related to Economic Stabilisation of the National Council.

The government increased power tariffs in August this year.

Parliament announced that although the electricity tariffs had been increased in the recent past, the CEB was still running at a loss.

The representatives of the government and private institutions related to the power sector were called before the Committee to obtain proposals for the purpose of solving the issues in the power sector.

In order to cover the current losses of the CEB, electricity tariffs had to be increased by about 70%, the statement issued by Parliament quoted CEB representatives as having said.

The statement quoted Chairman of the Committee, Patali Champika Ranawaka, as having said that if electricity tariffs were increased to cover CEB’s losses, businesses could collapse as a result.

It was also disclosed that the CEB currently owed nearly 650 billion rupees as outstanding debt to various parties including banks and electricity suppliers. The Electricity Board representative stated that out of the amount to be paid, nearly Rs. 35 billion were to be paid to the organisations that supplied renewable energy, and 75 billion rupees are to be paid to Thermal power suppliers. Thus, it expects to pay at least part of what it owes the suppliers from the 50-billion-rupee loan to be received. (SF)

Continue Reading

News

PMD claims President’s response misinterpreted

Published

on

President Ranil Wickremesinghe denied recent media reports stating that the Provincial Councils will be replaced with the District Development Committees.

Issuing a press release his media division said President Ranil Wickremesinghe’s response in Parliament on Tuesday has been misinterpreted.

Wickremesinghe’s media Division said that in response to a statement by former President Maithripala Sirisena, the President stated that the District Development Committees (DDCs) would be established within the Provincial Councils.

The DDCs would provide a platform for coordination between thegovernment, the Provincial Councils and the Local Government bodies for all executive decisions, the Media Division said.

“This will ensure the process is not duplicated and will reduce financial wastage. Apart from that, the president has not made any statement about the dissolution of provincial councils.”

Continue Reading

News

Kumudesh: Top bureaucrat demands service extension from Minister’s daughter to approve shady deal

Published

on

By Rathindra Kuruwita

A senior official of the Ministry of Health has asked the daughter of a Cabinet Minister to help him obtain a service extension in return for approving a controversial tender for medical supplies, President of the College of Medical Laboratory Science (CMLS) Ravi Kumudesh says.

Kumudesh told The Island yesterday that the Minister’s daughter was working for a company that supplied oxygen generators.

“The official told the Minister’s daughter that he would grant the tender to a company of his choice to ensure a comfortable retirement and if her company wanted to secure the contract he should be given an extension in service.”

Kumudesh said the money for the medical equipment was to be paid through the grants from the Global Fund. The World Bank is a major contributor to the Global Fund.

“Officials can grant these tenders to companies of their choice by changing criteria. They make small technical specifications to ensure that only one company qualifies. These officials are a law unto themselves.”

Health Ministry officials were not immediately available for comment.

Continue Reading

Trending