Sri Lanka seeks $1 billion loan from China amid debt woes
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Sri Lanka is negotiating a $1 billion loan from China to construct a highway linking the capital Colombo to the hilly resort city of Kandy, even as the heavily-indebted South Asian island nation makes arrangements to pay down $5.9 billion in foreign loans this year.
Finance Ministry spokesman M.R. Hasan on Saturday said that he's waiting to hear whether terms of the loan for the highway project have been approved.
A large chunk of Sri Lanka's foreign debt is from China, which sees Sri Lanka as a key link in its transcontinental Belt and Road infrastructure initiative.
Read more: China to build houses, roads in northern Sri Lanka to extend sway
President Maithripala Sirisena's government had criticised the previous administration of strongman Mahinda Rajapaksa for leading the country into a Chinese debt trap. However, the government has turned to China to help relieve economic pressures.
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On DawnNews
Comments (18) Closed
Feb 02, 2019 03:33pm
China will help Sri Lanka without strings attached.
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Feb 02, 2019 04:05pm
Deeper in the spiders web
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Feb 02, 2019 04:34pm
inescapable Chinese debt trap..
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Feb 02, 2019 04:44pm
This is what China for you, first enter, woo and then make dependent and followed by......
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Feb 02, 2019 05:23pm
China is helping financially to many countries in Asia and Africa. Take loan from IMF or World Bank, they help but with heavy cinditions, which destroy the ecnomy of barrower.
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Feb 02, 2019 05:27pm
What else can Sri Lanka do to overcome their financial difficulties and accounting discrepancies at this crucial juncture in time and history and seek help from their real friends like China and the great Chinese people? As per centuries old saying, " a friend in need is a friend indeed."
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Feb 02, 2019 05:31pm
China is good at giving; better at taking...
Gordon D. Walker
Canada
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Feb 02, 2019 05:49pm
Rajapaksa sold airport and port in Hambantota, now Sirisena will sell rest of the country's assets.
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Feb 02, 2019 06:37pm
@Saif Zulfiqar , Just ask public opinion in those countries you will find absolutely negative response to Chinese loans.Ask African countries like Djibouti,SA,Sudan and srilankan people you will understand.
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Feb 02, 2019 06:42pm
@Saif Zulfiqar , You must be joking.. China provides loans with so many attached string like if you cannot pay then lease port or whatever other assets you have for life(99 years). Chinese loans come with around 9-15% interest now compare that world bank or IMF which gives you loan at interest rate of 1-3%.
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Feb 02, 2019 06:59pm
What they going to pawn this time.
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Feb 02, 2019 07:18pm
Loan is trap. The more you try to get out of it , you more you will sink. Without loan you can't build big project. Utilizing of loan is an art. Any adventure in utilizing will left you no where. Srilanka might have miscalculated things and that will leave them no where. Don't know Srilanka economy has the capacity to absorb cost of loan.
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Feb 02, 2019 09:54pm
@Zak, what planet are you living on?
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Feb 02, 2019 10:18pm
Just ask India to construct this road. They will do that for half the cost and better quality.
China is good at giving loan but GREAT at extracting it with huge interest.
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Feb 03, 2019 01:52am
Another Hambantota in the making. People can see it coming, the whole of southern Sri Lanka will be leased to Chinese on a thousand year lease. While the Europeans conquered foreign lands, Chinese will do the same thru providing big loans on high interest rates, occupying lands on long lease, leading to a kind of consented slavery where only Chinese language will be spoken. Job done.
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Feb 03, 2019 06:59am
@Zak,
Yeah, sure. Whatever you say. So, how’s the promised transparency going for Pakistan? I suppose Sri Lankan’s can expect the same transparency regarding the terms of their agreement too.
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Feb 03, 2019 07:08am
Question.
Is there something in South Asia’s water that is causing an IQ deficit? If so, it really would explain a whole bunch of bad decisions that are routinely made, then repeated again. Have your water tested, Zak!
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Feb 03, 2019 09:49am
@Saif Zulfiqar , IMF, World Bank charge 1.5 - 3 percent while China charges around 10-12 percent. What is better strings with 2.5 percent or no strings at 10-12percent?
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