China's Xi offers Sri Lanka's new president support amid crisis
Xi said he is ready to provide support and assistance to the best of his ability to President Wickremesinghe and the people of Sri Lanka. - Bloomberg
BEIJING (Reuters): Chinese President Xi Jinping offered Sri Lanka's new president his support on Friday, state broadcaster CCTV reported, as the Indian Ocean island grapples with its worst economic crisis in decades.
Ranil Wickremesinghe, a lawyer who served as Sri Lanka's prime minister a record six times, was sworn in on Thursday in the face of fierce public opposition.
Sri Lanka's crisis sparked months of mass protests and eventually forced then President Gotabaya Rajapaksa to flee the country.
In his message, Xi said he believes Sri Lanka will be able to move towards economic and social recovery and he is "ready to provide support and assistance to the best of my ability to President Wickremesinghe and the people of Sri Lanka in their efforts", CCTV reported.
Sri Lanka owes at least US$5bil (RM22.2bil) to China although some estimates put it at almost twice that amount. India has also lent it US$3.8bil (RM16.9bil) and Japan is owed at least US$3.5bil (RM15.5bil), according to the International Monetary Fund, with another US$1bil (RM4.4bil) due to other rich countries.
Wickremesinghe has declared a state of emergency. Security forces raided and partially cleared a protest camp occupying government grounds in Colombo on Friday, fuelling fears that Wickremesinghe had launched a crackdown a day after being sworn in.
A large share of the foreign debt came through concessionary funding from multilateral organisations such as the World Bank, Japan International Cooperation Agency, and the Asian Development Bank (ADB).
ReplyDeleteAccording to the official records, China makes up 9.83% (US$3.4 billion) of Sri Lanka’s total foreign debt as of 2019.
Source : world bank debt statistic for Sri Lanka.
Tiongkok was one of the major root causes of Sri Lanka's financial crisis in the first place.
ReplyDeleteYr supporting facts!
DeleteOoop… fart?
Tiongkok is the Angel.....and also the Evil.
ReplyDeleteThe "next Sri Lanka" is very likely to be Pakistan.
ReplyDeleteIt is no mere coincidence that it is , like Sri Lanka, also a major participant in OBOR projects.
Mfer, OBOR projects r multifaceted & mutually benefited.
DeleteYet all of the sour losers, especially those Yankee asslickers, would term them debt traps!
If u truly understand foreign debts compilation of Sri Lanka, u wouldn't have just blindly chorus yr blurred farts, built upon the orchestrated China bashing themes?
Ooop… asking too much of a know-nothing anmokausai dickhead!
I am very familiar with debt concepts, as even with very prudent management, I have had to borrow money from institutions to finance my business over the years
ReplyDeleteThere are Preferential Creditors, who have a right to be paid before anybody else, there are Secured Creditors who have a legal claim over the debtor's assets if unable to pay to schedule, and Unsecured Creditors , who do not have legal claim over the debtor's assets and are last in line to be paid, perhaps Not at all.
Leaked Sri Lanka documents show that Tiongkok cleverly negotiated all its Sri Lanka loans to be the Priority 1 Preferential Creditor, which means Tiongkok gets paid before anybody else, come what may. And that is one of the roadblocks to the current Sri Lanka negotiations with IMF.
The Yankees will absolutely not accept any of that. If lending institutions are to agree to Debt Relief for Sri Lanka, ALL of Sri Lanka's international debts must be on the table.
Don't bullshit lah. Preferential Creditors can only applied to authorities of the home country. Between country to country, the best security is legal and valid collateral. I doubt you can secure a preferential security over the same collaterals which were already first obtained by another country (the early bird) without first obtaining the consent of that country (the early bird). Nobody would want a encumbered collateral unless certain of the value covers many many times over the existing liabilities. This is common sense. Therefore be able to negotiate and obtain Priority 1 Preferential Creditor status is a Monst-e-rous joke.
DeleteWakakakaka…
ReplyDeleteDon't just fart. Show that "Leaked Sri Lanka documents". Since they were been leaked then there were be multiple sources of them. Prove their existence!
U know "Priority 1 Preferential Creditor" concept?
Then what were the lending terms of "the World Bank, Japan International Cooperation Agency, and the Asian Development Bank (ADB)"?
Have u even read those documents? Or as usual, u just fart!
Since u have directly brought up Yankee's objections, then u obviously known yr uncle Sam is the biggest mouth within the world bank controlling management. It's precisely that all these foreign lending institutions have that ironcladed "Priority 1 Preferential Creditor" condition been upholds to protect their lending interests.
China's investments in Sri Lanka have NO such "Priority 1 Preferential Creditor" clause inbuilt into all their investments there. These could be clearly interpreted from all the major Chinese investments in Sri Lanka r very long termed based. This goes contradictory to the basic principle of "Priority 1 Preferential Creditor".
U won't REALLY know that as a Priority 1 Preferential Creditor, one gets the first cut of repayment before every other creditors. Then "long term" goes against that basic financial crisis doctrine of recovering monetary investments as quickly as possible.
"very familiar with debt concepts, as even with very prudent management"???!!
Ooop… u might as well say just get 'cozy' with yr bankers during happy hour. Mmmm… even in those dangdut one!
Many of a western propaganda plays on the debt trap theme on the China OBOR projects. They r most often trying to confuse the readers with bombastic financial jargons w/o a clear & precise definitions of the legal bindings & usages of the terms implied.
ReplyDeleteMost of the classic debt trapped nations fell under the conventional enforcement of the western financial mauls. When a country is at the edge of financial difficulties, all loans & helps stop. The last resolve is always the IMF/World bank where the provisional terms r very cruel & detrimental to the ultimate economic status of the country.
SKorea & many Latin America nations were the key examples during the past world financial crises.
To ease the readers' understanding between the Chinese & Western financial packages, the simplest is to look at some examples.
Puerto Rico has been a vassalized US state for the longest time, yet she is still a underdeveloped country. Ditto with many of the Micronesia island nations supposedly under the sopo-economical guidance of the US.
Similarly with the Polynesia island nation functioning as the protectorates of Oz.
Many r remaining poor & subservient till this modern days to US & Oz dictates bcoz of the debt traps created within these nations under the guided sopo-economical programs.
Yet Rwanda, 20yrs later, is a well groomed country shortly after the Chinese invested heavily to help uplifting the country. When facing the cruel aftermath of the racial genocide, no other country in the world is willing to invest or help that country.
When Greece was a financial basket case, no other countries r willing to invest & help to solve her economical crisis. Yet State-owned China COSCO Shipping first secured the right to operate parts of Piraeus in 2008 & provide jobs to many of the local unemploys!
Ditto with the Hambanthota Harbour of Sri Lanka.
The Chinese investmens in Rwanda, Greece & Sri Lanka r all VERY long termed with almost no immediate returns.
Yet the western propagandists calls them debt traps when NONE of the western govts were willing to offer financial helps in such a long time duration, knowing very well that to solve the ongoing crisis of these countries, short duration financial packages would be that maundering debts that r going to ruin those countries!
'Sri Lanka ( SL ) is a Tiny Island Nation wrecked with a 20 year civil war that caused a huge hole in its economy
ReplyDeleteIts Leaders ambitiously decided to start building a lot of White Elephant Infrastructure
China financed them generously to build Roads, Subways, Bridges and a Port with the deal that if they couldn't pay back - the Port would be leased to them. Its called Collateral. If I cannot pay back my housing loan, the Bank will repossess my house.
Back when SL was signing all these deals- SL was making $ 16 Billion a year in Tourism Revenue with nearly 60% of their Tourists coming from China.
China financed them generously to build Roads, Subways, Bridges and a Port with the deal that if they couldnt pay back - the Port would be leased to them. Its called Collateral. If i cannot pay back my housing loan, the Bank will repossess my house.
Back when SL was signing all these deals- SL was making $ 16 Billion a year in Tourism Revenue with nearly 60% of their Tourists coming from China.
Paying $ 2.8 Billion to China as Interest on the Loans, $ 7.2 Billion to Japan , India and IMF as Interest on their Loans made perfect sense.
With me so far????
SL looked geared up to survive their Debts and Hambantota was likely to pay off its keep
THEN COVID 19 Happened and an AGRARIAN CRISIS Happened
SL that normally produced 65% of their Food locally , suddenly found that they could only produce 39% of their Food Locally because of a sudden obsession with Organic Fertilizers and Farming. This 26% Deficit had to be adjusted vide Imports and a whopping $ 7.1 Billion Bill was generated thanks to this debacle over 2 years.
Then COVID happened - Tourism crashed for a whopping 14 1/2 months from March 2020 to May 2021 . The Entire Chinese tourism stopped and only 20% of other Nation Tourists came to Lanka due to Indian or European Lockdowns and Restrictions. That's roughly $ 17.3 Billion of potential revenue lost.
Thus Lanka found they had to spend around $ 3.5 Billion in Vaccines and Healthcare during Covid.
So SL owed $ 10.6 Billion extra and no longer had their Tourism revenue.
Add to this around $ 10 Billion interest payments
So what did SL do? They borrowed more money - NOT FROM CHINA but from the IMF and India. India, IMF suspended their interest payments as did Japan and China during Covid 19 but they didn't forgive the debt.
When Covid 19 finally subsided globally - SL owed $ 10.6 Billion in Debts plus an annual payment of $ 10 Billion still
Oil was only $ 38 a Barrel and SL thought they could still survive
THEN OIL PRICES ROSE AND LATER UKRAINE CRISIS HAPPENED !!!
Oil rose from $ 38 to $ 63 to $ 85 to $ 104 to $ 122 a Barrel rapidly
Petrol rose appropriately
SL had to pay an extra $ 370 Million a month for Petrol and $ 540 Million a month for Oil a Total of around $ 900 Million a month for Oil
Thats why the SL economy collapsed
China has NOTHING to do with it
Absolutely NOTHING
Sure they are a convenient scapegoat due to the Anti China sentiment and its easy to brainwash the Yokel Sinhalese Populations Paupers into believing that China is responsible. Its the normal agenda by Westerners to brainwash the Weak minded.
Did China take over the Hambanota Port because SL couldnt repay the Loans?
Absolutely. Its why Banks take over Collateral Securities.
Did China know SL couldnt repay the Loans?
I doubt it. When the Deal was signed, SL estimated $ 16 Billion a year in Tourism Revenue and had the COVID 19 not happened - the Port could have secured enough to pay back the Loans
And i am pretty sure China didn't have a Crystal Ball
The Port was just a Security
Why did SL collapse so badly?
Rising Import Bills due to Agrarian crisis, Covid 19, Rising Oil Costs & Falling Revenues ue to Near Zero Tourism
The Loans were entirely suspended by China, Japan and India from 2020–2022 - so SL didnt pay a Dollar in Interest to any Country. So How could China have caused the economy to collapse?????
For those who r interested to know more about debt traps, especially the western hyperbole of the Chinese one, do read
ReplyDelete“The Chinese Debt Trap Is A Myth.” published by Deborah Brautigam & Meg Rithmire of the John Hopkins University