Red Lantern Analytica hosted a webinar titled “Chinese Hands behind Sri Lanka’s Economic Crisis” on 15th July 2022. The Webinar’s expert speakers were Maj. Gen Ashok Kumar, VSM (Retd.) Indian Army, Major Amit Bansal (Retd) Indian Army and Dr. J Jeganaathan, Assistant Professor, Central University of Jammu.
Maj Gen Ashok Kumar, VSM (Retd.) opened his speech by underlining that the Sri Lankan economic crisis is a culmination of three prominent factors. These can be summed up in three words: politicians, the public, and the People’s Republic of China (PRC). Politicians because they borrowed much more than their country could afford. People because they supported Populist measures of the government and PRC because it is behind the Debt Trap of Sri Lanka.
He lambasted China for abandoning Sri Lanka during the current economic crisis. The Chinese Foreign Ministry is also absolutely silent. He accused China of having a habit of offering loans to countries pretending to be help, which might bring “development,” but the Chinese keep the terms and conditions of the loan in a way so as to facilitate the borrowing country into a trap. China currently accounts for more than 10% of Lankan foreign borrowings, along with a 43% stake in the Colombo Port City Project, lying strategically just 500 kilometers from the coast of India.
Major Amit Bansal (Retd), the second speaker of the session, emphasized that China always harbors an intention of trapping the borrowing countries in debt. When Lanka approached the IMF & European countries for assistance; the Chinese Ambassador to Colombo openly criticized the Lankan administration. He called out to Sri Lanka to borrow more from China.
He further gave an example of the Chinese mala fided intentions in the fact that when Ranil Wickremesinghe became Prime Minister of Sri Lanka, he requested China to roll over the debt. The Chinese authorities then blatantly denied giving an excuse, saying that if agreed, they might have to do the same for other borrowing countries.
He further gave out China’s blueprint for the “Debt Trap”. The borrowing country must be strategically located, it must be economically weak, should be poor and must also have corrupt politicians in prominent administrative positions. Once all these conditions are met; China offers generous loans under the garb of bringing “infrastructural development” and then gradually takes away its sovereignty. He also gave an example of Pakistan, which had to offer China 2 of its islands along with Gwadar port and parts of occupied Gilgit Baltistan.
Dr. J Jeganaathan, the final speaker, elaborated on the Chinese pattern of offering loans to the countries under the Belt and Road Initiative (BRI). According to him, the Chinese have always chosen authoritarian regimes lacking accountability and public transparency. He called the current political situation in Sri Lanka “grim; while also predicting that the Lankan Army might help till the politicians find solid ground again. According to him, the only way out for Sri Lanka to maneuver away from the economic crisis is to avoid Chinese loans and look for help from possible friendly countries in the West and India in particular.
Following the guest speakers’ remarks, a brief Q & A session was held. Following this, the session moderator, Ms. Shalini, Research Associate at Red Lantern Analytica, invited Mr. Abhishek Ranjan, Consultant at RLA, to deliver the vote of thanks to the esteemed expert panel. The session concluded after the delivery of the vote of thanks.
