Link to article: https://apnews.com/article/business-china-beijing-sri-lanka-africa-e6b1e60b2a1aab035bcc6e65ebe507b7
Amidst its tremendous debt crisis, Sri Lankan Prime Minister Rajapaksa has asked China to restructure its loans to Sri Lanka to prevent further economic disaster. Sri Lanka currently has approximately $7.8 billion in debt, 3.38 of which is owed specifically to China. This does not include loans to state businesses, which the Associated Press reports as likely “substantial.” The loans China gave Sri Lanka were designed to fund infrastructure projects, such as the construction of roads, a seaport, and an airport. However, these infrastructure projects have not generated any income, rendering the country technically bankrupt. Rajapaksa and Chinese Foreign Minister Wang Yi met at the island of Colombo, an island that was renovated by Sri Lanka with help from Chinese loans. Inflation rates in Sri Lanka reached 12.1% at the end of December, up 2.2% from November. China sees Sri Lanka as an important part of its Belt and Road Initiative; meanwhile, India is also attempting to improve its relationship with Sri Lanka.
The situation evolving between China and its “allies” is concerning to the global community. It is evident that China took advantage of Sri Lanka, and organized a loan in such a way so that Sri Lanka will be in debt to China for the foreseeable future while China takes advantage of the nation for infrastructure. Lasting impacts for Sri Lanka could be detrimental. Domestic situations in Sri Lanka are already grim, with long lines forming for kerosene and powdered milk. I would expect to see more pressure put on China from the U.S.’ allies, mainly India. India’s attempts to improve relations with Sri Lanka are likely directly related to India’s improving relations with the U.S. I suspect the two countries are likely working together to diminish the effects of China’s Belt and Road initiative. This is also very similar to my group project’s analysis of China’s expanding influence in East Africa, suggesting China’s project is increasing in magnitude and efficacy.
The class has previously discussed China’s Belt and Road initiative and its detrimental effects on smaller countries of which it takes advantage. Additionally, class presentations have involved analysis of the initiative. Sri Lanka’s location, as discussed in class, is vital to the global trade market through the Indian Ocean. Since the U.S. and its allies have essentially blockaded China through allies in the South China Sea, it must seek other methods of maintaining economic power through geopolitical features. As my group presented, diplomacy seems to be the prevalent route of combatting China’s growing influence.