Sri Lankan President appeals China to facilitate repayment of loans

Colombo – Sri Lankan President Gotabaya Rajapaksa demanded that if China intends to assist Sri Lanka, it should give certain facilities to Sri Lanka to repay the debt. Chinese Foreign Minister Wang Yi I am currently on a visit to Sri Lanka. The Sri Lankan President presented this demand during the discussions with Wang Yi. The Chinese media had claimed before the visit of the Chinese Foreign Minister that China was willing to assist Sri Lanka reeling under a financial crisis. Against this background, the Sri Lankan President has forwarded this demand to the Chinese Foreign Minister.

Sri Lanka is supposed to pay an instalment of $1.5 to $2 billion, to China, in the current year. The Sri Lankan economy has hit rock bottom given the Coronavirus pandemic. In December, the Sri Lankan foreign reserves were down to a meagre $1 billion. Therefore, the economists had warned that this would barely suffice to pay for the December imports. In this scenario, Sri Lanka is forced to pay the instalment for the development projects being implemented in Sri Lanka. China had given these loans to Sri Lanka at high rates. At that time, economists around the globe, including Sri Lanka, had opposed the proposal.

In 2017, Sri Lanka handed over the Hambantota port to a Chinese company on a 99-year lease as it could not return the Chinese loan on time. The Chinese predatory economic policies came under fire after this and other countries became more cautious. It is claimed that the Sri Lankan economy today is also, to an extent, due to the Chinese debt noose. This resulted in straining of relations between China and Sri Lanka and at the same time, Sri Lankan relations with India have improved.

Cooperation is being established afresh between India and Sri Lanka. Upset with this development, China has again started moving to use Sri Lanka as a pawn against India. Indications are that China is once again forwarding a proposal to assist Sri Lanka to be able to take advantage of the economic crisis in Sri Lanka. Chinese government newspapers also made such claims. In this scenario, Sri Lankan President Gotabaya Rajapaksa has demanded a facility by restructuring the existing debt instead of a fresh borrowing from China.