Monday, December 2, 2019

"New Sri Lanka government wants to undo deal to lease port to China for 99 years"

Across Central Asia to Africa and beyond many of the countries that cut deals with China want out.
And then there's Sri Lanka. This one was weird from the get-go.*
Via Singapore's Straits Times, November 29:
Sri Lanka's new government led by President Gotabaya Rajapaksa wants to undo the previous regime's move to lease the southern port of Hambantota to a Chinese venture, citing national interest.
Former prime minister Ranil Wickremesinghe in 2017 changed the terms, saying it would be difficult to pay the loans taken to build the project.

He agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co in return for US$1.1 billion (S$1.5 billion). That helped ease the Chinese part of the debt burden raised to build the port, Mr Wickremesinghe said in an interview in 2018.

"We would like them to give it back," Mr Ajith Nivard Cabraal, a former central bank governor and an economic adviser to former prime minister Mahinda Rajapaksa, said in an interview at his home in a Colombo suburb.
"The ideal situation would be to go back to status quo. We pay back the loan in due course in the way that we had originally agreed without any disturbance at all."

The port is emblematic of the controversy dogging Chinese President Xi Jinping's Belt and Road initiative from Kenya to Myanmar, including accusations that the world's second-largest economy is luring poor countries into debt traps.

In Sri Lanka, where the transaction to lease the port was opposed by Mr Gotabaya Rajapaksa's party, Mr Mahinda Rajapaksa took Chinese loans during his 10-year rule as president to build the project in his home district.

"This is a sovereign agreement" and it's unlikely that it will be scrapped or altered in a big way, said Mr Smruti Pattanaik, a research fellow at the Institute for Defence Studies and Analyses in New Delhi.

"The Chinese may reconsider some clause, if it is considered crucial for the Rajapaksa regime."....
....MORE

Meanwhile, the Bangladeshis are watching India watching China.
From the Dhaka Tribune, November 30:
India offers funds to Sri Lanka in bid to outdo China

*April 2018
Geostrategy: "In a remote corner of Sri Lanka, China built billions of dollars of high-end infrastructure that now sits virtually abandoned. Was that the plan all along?"