Experts warn states against China’s debt trap diplomacy

Experts warn states against China's debt trap diplomacy

Experts say that because the Sri Lankan economy is overwhelmed with Chinese loans, other countries in the area should call on their own governments to learn from the Island nation. Dr. Rasul, an economist from the International University of Business, Agriculture, and Technology (IUBAT), warned against countries being overly reliant on foreign loans, which he believes puts them at risk. In an article published in The Daily Observer, Md. Maruf Mozumder urged Bangladesh to learn from Sri Lanka’s mistakes. Sri Lanka’s proclivity to tilt more toward China than India, he said, was worrisome, and that “it is crucial to remember that, as a result of Debt Trap diplomacy, China is creating a geopolitically powerful position with vast resources.”

Sri Lanka’s situation is also marred by years of Rajapaksa’s rule in the island nation. Dr Golam Rasul says that a multiparty democratic system is critically important in any country. Dr Rasul pointed to other important lessons for Bangladesh from the Sri Lankan situation. He wrote that economics and politics were interrelated and influenced each other, and quoted Nobel laureate Milton Friedman while asserting that political freedom was fundamental for economic freedom. Dr Abid Qaiyum Suleri, who heads the Sustainable Development Policy Institute, welcomed Sri Lanka into the Pakistani club by writing, “Pakistan is not the only country in the region going through political turmoil. Sri Lanka, too, is facing a political impasse. Insecurity breeds insecurities. In Sri Lanka, an economic crisis has spawned a political crisis. In Pakistan, the ongoing political crisis is leading to an economic crisis”. He warned against gaining political popularity at the cost of macroeconomic stability, which he felt will lead to a vicious ‘economic crisis-political instability’ cycle.

Sri Lankan leaders have promoted large-scale investments from China which has boosted Beijing’s debt-trap diplomacy. Not only this, while addressing the Sri Lankan media, China’s Ambassador to Colombo Qi Zhenhong criticized Sri Lanka’s decision to approach the Washington-based International Monetary Fund (IMF) to bail it out. This becomes clear that China has contributed to Sri Lanka’s current devastating economic crisis. Even when China was asking Sri Lanka to not seek the support of the US, China itself has not provided an alternative to the nation to help it pull out of the economic crisis. The economic catastrophe has caught the attention of experts across South Asia. It has led to debates and suggestions on what other countries needed to do to avoid turning into another Sri Lanka, as per the outlet.

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