Sri Lanka ate the Chinese chicken instead of collecting eggs: Academic
ECONOMYNEXT – Sri Lanka has not used Chinese debt appropriately to grow the economy after the end of the civil war, akin to eating a chicken instead of allowing it to lay eggs, a former diplomat cum academic said.
“The Chinese approach is giving the chicken to you and letting it lay eggs,” Institute of International Affairs Director Yiwei Wang said in Colombo on Monday.
Speaking at a Ceylon Chamber of Commerce forum on the Belt and Road Initiative, he said China intended for Sri Lanka to use the debt to develop itself.
However, after the end of the civil war, the government kept borrowing without creating strong economic growth, getting Sri Lanka stuck in endless debt, Wang said.
“When the economy is not growing you can’t pay it. So, the debt grows more and more. It is endless.”
Wang said the Chinese government has invested 90 billion rupees in Sri Lanka over the past six years.
Many investments come through Chinese state-owned enterprises, although some of the largest to build a port, airport and a convention centre in the Southern coastal town of Hambantota, had been made much earlier.
An AidData and Asian Society Policy Institute study titled ‘Silk Road Diplomacy’ said Sri Lanka has been the third-highest recipient of Chinese investments in Central and South Asia totalling 12.7 billion US dollars.
Pakistan was leading with 38.43 billion US dollars, followed by Kazakhstan with 32.87 billion US dollars.
Wang said China’s approach to financing is fundamentally different from the west.
“The western approach, which we have seen in Africa and Sri Lanka, is like giving you the chicken and you eat the chicken as a chicken soup. That way you will be on huge debt,” he said.
He said China did not trap Sri Lanka in debt.
“Many people talk about the debt. Yes, even China bought money in the beginning, from the Asian Development Bank. A huge amount of money. There is no trap.” Wang said.
“If it is a trap, then 137 countries should be in that trap now.”
The Belt and Road Initiative (BRI) is a global development strategy adopted by the Chinese government in 2013 involving infrastructure development and investments in 152 countries and international organizations in Asia, Europe, Africa, the Middle East, and the US.
Jayanath Colombage, additional secretary (foreign affairs) to the President, too backed Wang, saying Sri Lanka is in a debt trap not because of China but due to a poor economy.
“We have mismanaged our economy. We did not make the use of money we borrowed. And we don’t want to blame somebody else for that.” Colombage said. (Colombo/Jan28/2020)
Economic Intelligence Unit of the Ceylon Chamber of Commerce
Jehan Perera - Executive Director National Peace Council