Chinese Assistance is Opulent but Opaque! By Prof. Samitha Hettige 

Washington based International Monetary Fund (IMF) recently stated that Sri Lanka should immediately talk with the Peoples Republic of China to get relief through debt restructuring to come out of the crisis at this very moment. These views came when SL approached the US based lending agency established after WWII to finance countries in need. At the same time western dominated World Bank has also noted SL’s instability. Therefore, SL has to be stable. Who has so far helped mostly for SL to be stable? According to financial sources SL owes approx 6.5 billion USD to China and the USA seems to be thinking that it is an opaque situation.  Considering the below assistance China has provided since the establishment of the PRC (in 1949), it is clear that the people of SL owes much more to its historic friend (of 2500 years). Reasonable citizens would agree that it is hard to repay China for its contributions to make SL stronger and stable socially and economically.

 Year/s  Contribution
  • Rubber Rice Pact signed to fight famine in SL.
  • Bandaranaike Memorial International Conference Hall.
  • Supreme Courts Complex constructed ensuring rule of law.
  • Nelum Pokuna Theater to strengthen arts & cultural.
2005 – 15
  • Norochcholai power plant ensuring energy security.
  • Hambantota sea & air ports to connect SL to the world.
  • Colombo Port City & Shangri-La Hotels to attract the world.
  • Lotus Tower to strengthen the right to information.
  • Southern Railway & SL’s first ever Expressways.
2016- 19
  • Moragahakanda reservoir (largest in SL) & Kidney Hospital Polonnaruwa ensuring right to life.


Apart from above, China unconditionally protected SL at international forums along with USSR (Russia) especially during the 30 year war against terrorism. China helped SL to establish regionally as part of the Shanghai Corporation Organization and helped ONLY the democratically elected governments of SL to end the war. Western permanent members of the UN Security Council couldn’t act same due to domestic politics. The cost of SL war on terrorism was estimated approx 200 billion USD – Ref. S. Menon. If other super powers also helped SL like China to prevent or end the war sooner, it could have easily repaid the debts with the savings. China provided vaccines to save SL lives two years ago and ensured stable employment for more than 11,000 Sri Lankans (direct beneficiaries) during the pandemic ensuring the right to a decent employment (Ref. Chinese FDI sources). 

US concerned 20 years

The administrator of the USAID Samantha Power is not a stranger but a friend of SL. Her organization USAID has helped SL strengthen civil society in many aspects. Some say they worked very closely with the Bar and the Judiciary etc. as part of that support. She was concerned about Chinese involvements in SL during the past 20 years. USA also must be concerned about China establishing as a global power during the same period and may have designed the Millennium Challenges Cooperation Agreement to face that. It is not clear if she purposely didn’t discuss what China contributed to SL during the past 2000 years or at least since 1949 (by Communist China). At a recent event in India she has commented on the infrastructure projects such as the Lotus Tower and the Hambantota Air port. USAID may invite US Air force experts to educate SL Air force on the pros and cons of having a 2nd international airport. Then SLAF may update SL policy makers. One might say that the USA should be happy about such infrastructure in bankrupt SL as they may negotiate bargain deals if they wish to relocate facilities once Diego Garcia goes back to Mauritius. Her staff may also update her about the Canadian organization which first came forward with a proposal to build a port at Hambantota. When SL invited the Canadians to build the port after the feasibility study, they backed out as they didn’t have the capital to launch the project. Looking back, some Sri Lankans may one day be happy that China is involved in Industrial development in Hambantota so there will be no room for undue involvements.

Ms. Power was also concerned about “opaque” loans from China. Different social views may indicate that Sri Lankans were opaque in spending borrowed money during the past 74 years and she should be updated that it was SL which requested the loans and China never enforced loans on SL. Approx 85% of SL’s loans were taken from other lenders. It is a question why those loans are not seen as opaque. It isn’t clear why the IMF didn’t want SL to negotiate with those lenders (who gave 85%) but wanted SL to talk only with China (who gave 15%) to restructure the debts. Do they wish to see SL getting entangled in the so called “debt trap” they always talk about by working with China to restructure loans?

IMF put SL back on track

During the past two years SL visibly distanced China. President Gotabaya (maybe with a more US focused foreign policy) didn’t visit China despite several invitations. SL government seems to have blocked international Chinese companies getting involved in SL (i.e. renewable energy project in the north, central expressway contracts & the fertilizer fiasco etc). Therefore, one might feel that the IMF proposal has actually put SL back on track to realize genuine friends.  SL should recognize the proposal by Chinese lenders to restructure the repayment process presented long before SL started talking debt restructuring.  Is there any other way out for SL? Historically China has not destroyed any nation. China’s win-win policy never allows one nation’s disaster to be another nation’s delight. Sri Lankans must be cautious as they are falling as a state. They must use the fall to resolve (the conflict) and rise. President and the government should lead to use the conflict for positive change.

“Those who dare to fail miserably can achieve greatly – John F. Kennedy”

(The writer is an Academic and a Broadcaster. Views expressed are personal and may not necessarily be the views of his affiliations.)

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