Is China responsible for Sri Lanka’s economic crisis? Former ambassador Ashok Kantha explains

Ashok Kantha said that the island nation’s ongoing economic and political crisis is not ‘made in China’.

New Delhi: Former Indian High Commissioner to Sri Lanka Ashok Kantha, on Saturday (July 16), said that the island nation’s ongoing economic and political crisis is not ‘made in China’, explaining that the corporate loans provided by Beijing, however, added to the situation. Speaking at Zee Media organised the ‘Interact with Experts’ event, Kantha also pointed out that China is now not coming forward to bail out Sri Lanka from possibly the worst economic crisis since its independence in 1948. 

While Kantha didn’t blame China entirely for the economic crisis, he noted that the corporate loans issued by Beijing for economically unviable projects put additional stress on the country.

For instance, Sri Lanka agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co. to ease off the debts. It is indeed a prime example of China’s debt-trap policy. 

Early this week, Sri Lankan President Gotabaya Rajapaksa fled to the Maldives on a Sri Lankan Air Force plane. He, later on, flew to Singapore amid widespread protests against his government for mishandling the country's economy. 

As thousands of demonstrators stormed Rajapaksa's official mansion last Saturday, accusing him of causing the extraordinary economic catastrophe that has brought the nation to its knees, Rajapaksa announced earlier that day that he would resign on Wednesday. 

According to Kantha, it was the combination of structural and developmental issues, coupled with mismanagement, corruption, and political nepotism. External factors such as the Covid-19 pandemic and Russia’s intervention in Ukraine aggravated the already worsening situation in the neighboring nation.