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Debt-trap diplomacy: Should China be blamed for Pakistan, Sri Lanka crises?

China exacerbated but didn't mostly cause the problem whose roots lay in borrowing countries' broken politics and economic mismanagement. The loans may only have solved some problems, writes T N Ninan

Topics
Southeast Asia | Pakistan  | sri lanka

T N Ninan 

T N Ninan

Two countries in the neighbourhood, and Sri Lanka, signed up for massive Chinese debt-funded projects, slipped into economic crisis, and now are caught in political turmoil. In a third country, Myanmar, the Chinese have moved back in after the military coup 14 months ago, and are pushing projects for an economic corridor. In the Maldives too, Chinese-funded projects and loans have risen and fallen with changes of government. Estimates of the Maldives debt to China vary sharply — the opacity is typical because China has a history of hiding loans as trade credit or by routing them through special purpose vehicles. And isn’t cheap; interest rates seem to be about three times what other countries charge on bilateral aid.

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First Published: Fri, April 08 2022. 19:04 IST
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