Sri Lanka now spends 80% of its revenues in paying foreign debt - Thanks to China

[PurpleStone]

Stupidity.

Why?

 

[ashok321]

Hypothetically speaking , what would happen if SL ( or any other nation in similar debt situation) were to say nationalise such assets & tell the lender to take a walk ?

Can it be done?

What would be the fallout’s of such a move ?

Anyone ?

@Joe Shearer @SOUTHie @$@rJen @waz

This would be pretty easy peasy lemon squeezy type for every other (would be) defaulting nations (at the verge of) to behave under this pattern to remain immune to creditors. However this is not an International norm to circumvent your financial obligations this easy. There are repercussions & consequences.

International/Bilateral loans are disbursed in a secure way with a remedy/clause to recover them back (grace period apart). Normally this clause would end up in a arbitration in a neutral country a la Singapore and/or London which are financial capitals of those regions. These are preferred arbitration destinations by the way. Why? Simply because they are very fast & efficient to resolve a business dispute.

To back up my above paragraph, see this thread that I started:
23 BITs in progress against India worldwide while Chowkidar is sleeping

All Indian centric BITs are progressing mainly in London or Singapore (Singapore International Arbitration Tribunal) type of neutral venue with International conglomerates dispute against GOI ended in arbitration.

Case lost or win:

For example, If Vodafone loses its case against India, what would happen? How can India collect its dues?
India can expropriate its assets in India which is the easiest way, without going to ICJ premises. However, if they are short on their collections, they can knock the ICJ door.

Now the plot thickens.
What would happen if the ICJ rules in India's favor?
How will India enforce its claim and get its dues? Will India invade Britain if it does not comply with India's request?

This is where all mighty, omnipotent UNSC P5 kick in.

Any Indian resolution would get Vetoed by UK. Period.
And there is no other Veto to veto UK's Veto.
Veto means prevention, forbid aka "NO" (Latin).

The best example of this is US vs Nicaragua on International level - there is no other equivalent in the word on this.

Nicaragua v. United States - Wikipedia

Nicaragua despite winning the court battle in ICJ could not cut the mustard because of US UNSC clout.

And this is where India is an orphan, and will be so for eternity.
They will never grant India a UNSC status with Veto.
Any of the 5 UNSC members CAN veto India's entry.

And there is India specific case involving GMR vs Maldives:

GMR wins international arbitration against Maldives, gets $270 million ...

International enforcement involving International laws, treaty and sovereignty, is the biggest obstacle to collect the dues overseas.

This is where the Might is right case works well, wherein India is on crutches - it can not coerce any country without consequences - Modi or no Modi.

Thats why I always say to those moron Modians to not brag. India is nowhere in a position to rock even a Bangladesh's boat without getting hit (like shielding Indian anti nationals a la ULFA chief Paresh Barua) - And Pakistan is a nuclear power who can nuke India if its existence is in danger.

India has no recourse - While the US can extract its pound of flesh being a superpower.

Enough said.







The glaring example of lease vs sale is the Hong Kong case.

Britain handed over HK to China after its expiry of 99 years old lease.
Now China has its gold nugget in the form of prosperous HK which was nothing, nada, zilch before 99 years.
China became 3% rich out of nowhere suddenly.
A Lottery - due only to lease expiry.
Just think if HK would have been sold!

Same nugget is waiting in the wings for Sri Lanka.

 

[PurpleStone]

The glaring example of lease vs sale is the Hong Kong case.

Britain handed over HK to China after its expiry of 99 years old lease.
Now China has its gold nugget in the form of prosperous HK which was nothing, nada, zilch before 99 years.
China became 3% rich out of nowhere suddenly.
A Lottery - due only to lease expiry.
Just think if HK would have been sold!

Good example.

 

[Chhatrapati]

Why?

Did the trigger-happy Americans invade any country for economic reasons?

China can't invade even tiny Taiwan let alone Lanka, thousands of miles apart and with what? Navy?

 

[PurpleStone]

Did the trigger-happy Americans invade any country for economic reasons?

China can't invade even tiny Taiwan let alone Lanka, thousands of miles apart and with what? Navy?

China can surely invade SriLanka unless US/NATO comes to SriLanka's rescue.

 

[Chhatrapati]

China can surely invade SriLanka unless US/NATO comes to SriLanka's rescue.

And that's called stupidity.

 

[Max]

another propaganda peice written by bhangi on nearest railway track in eastern shothole,

first someone should ask subhuman, why he Thanked China when most of the debt is non Chinese..

Sri Lankan debt is 65 billion from which they owe China some 8 billions.. Rest goes to western banks..

China is the one who is still investing in Sri Lanka and trying to help their economy not the west nor bharatis..

 

[PurpleStone]

And that's called stupidity.

Why? China could have a piece of land in Indian Ocean. It is very desirable. Helps them to project their military and expand trade.

 

[Dalit]

LOL economic times of India.

 

[Godman]

I have debunked the "Chinese debt" issue. Vast majority of loans SL have taken are not from China.
SL's debt to China is only around 8 Billion and probably the easiest to deal with.


The next SL govt would probably be closer to China than any govt before and China is already preparing for future possibilities in advance.

 

[Godman]

Lesson 2: Politicians Will Exploit Anti-China Sentiments ::

In the 2015 election, Rajapaksa suffered a surprise defeat after challenger Maithripala Sirisena attacked his tight relations with China, warning that Sri Lankans “would become slaves” if the trend continued. Three years later, Rajapaksa’s political group is attacking Sirisena for close ties with China.

"The Chinese are like an octopus -- once they get a hold of something, they take everything," said Ruwan Kumara, a local politician aligned with Rajapaksa who runs a store in Hambantota. "They want to get a hold of all the smaller Asian countries and become the most powerful country in Asia."

While discontent brews in the countryside, many in the capital benefit from the Chinese cash. Cranes loomed over the skyline in Sri Lanka’s capital, where a $1.4 billion land reclamation project led by state-owned China Communications Construction’s China Harbor Engineering aims to transform Colombo into a "world class" South Asian hub.

"Sri Lanka is smack in the middle" of China’s global infrastructure plans, said Thulci Aluwihare, who left Pricewaterhousecoopers LLP to join the Chinese firm’s local subsidiary. "As a nation, we should take advantage of this capital being exported out of China for infrastructure development. And make use of it."

If what most Lankans predict is right the next president wouldn't be Sirisena or Rajapaksa (at least not the Rajapaksa they are talking about here )
What either of them think will become irrelevant to future decision making if what most people think about the 2020 elections is right

 

[Nilgiri]

I have debunked the "Chinese debt" issue. Vast majority of loans SL have taken are not from China.
SL's debt to China is only around 8 Billion and probably the easiest to deal with.

Can you point me to this thread?

 

[Godman]

Can you point me to this thread?

https://defence.pk/pdf/threads/sri-...ry-of-chinese-domination.480296/#post-9246393

 

[Nilgiri]

https://defence.pk/pdf/threads/sri-...ry-of-chinese-domination.480296/#post-9246393

Like I see your point, but it would need further analysis if you look at when the debt spike happened:

http://datatopics.worldbank.org/debt/ids/country/LKA

i.e net flows section (for both long term and short term) for years 2011 to 2013 (and especially the middle i.e 2012).

It would be the composition of this that would be key...after all not all debt have the same interest charged on them, esp if its short term (but even long term has variance).

Do we know for example what the pre-2011 debt load had on average (yearly interest rate wise) for its short term and long term stocks?....and what the 2011- 2013 ramp has in comparison? If there is a big enough difference, then there is definitely a factor from the Chinese end too adding to fiscal and BoP pressure. I mean for 2008 - 2016, SL seems to have doubled its GDP, but tripled its interest payments...that to me illustrates the ramp inside this time frame has higher interest levels compared to before.

Though you are correct even if its true, this is more from SL end problem wise for taking on this type of debt with the problematic system on ground in first place, since there are clearly many factors largely exclusive to SL:

https://blogs.worldbank.org/opendata/are-south-asian-countries-sinking-debt-trap

 

[volatile]

How convenient, I think you must practice what you preach. Hint: India Afghanistan relations.

There is no relationship with this topic ,In other words I really have nailed you and you dont have words on the mentioned topic