As an example of the Sri Lankan government’s waste, some huge projects built on Chinese debt are scattered across the country. Many of these projects are in the Hambantota district, known as the stronghold of the powerful royal family. Due to several years of budget deficit and imbalance in foreign trade, Sri Lanka had to borrow large sums.
On the other hand, the government has poured money into various infrastructural projects.
This caused a huge deficit in the government treasury. Prime Minister Mahinda Rajapaksa, who approved most of the projects, has been forced to resign in the wake of the economic crisis.
Projects made with the help of China
A deep seaport was established in Hambantota as the centerpiece of all projects. The expectation was that it would play a role in the expansion of industry in the country. But the port has only suffered losses since it began operations. A resident of Hambantota said: ‘After the announcement of the project, we were very optimistic that the area would be further developed. But it did not happen. The port is not ours. We have to fight to survive. ‘
The port of Hambantota could not repay the ১৪ 1.40 billion Chinese loan. It lost কোটি 300 million in six years. Later, in 2016, the port was leased to a Chinese state-owned company for 99 years.
Similarly, a conference center was built with a Chinese loan of more than one and a half million dollars. But it has somehow remained unused since its inauguration. Nearby is the Rajapaksa Airport, built on a কোটি 200 million Chinese loan. But at one stage it could not even pay its own electricity bill due to low usage.
A 75-acre artificial island was also being built in the capital Colombo with Chinese funding. There was talk that the financial center would become a rival to the famous Dubai. But critics have called the project a “hidden debt trap.”
The largest bilateral lender
China is Sri Lanka’s largest bilateral lender. China accounts for at least 10 percent of the country’s 5.1 trillion foreign debt. Last month, Chinese Ambassador Ki Zhenhang said, “China has provided maximum assistance to Sri Lanka to prevent default, but sadly they have gone to the IMF and decided to default.” ‘
On the other hand, Murtuza Jafferji, chairman of the Avocata Institute, a Sri Lankan research institute, said: The crisis has been exacerbated by declining revenues from tourism and remittances due to the coronavirus epidemic. The import-dependent country is now unable to buy even the necessary goods from abroad.