The situation in Sri Lanka, Chinese debt, Washington warned Dhaka

[Bengal71]

China offers developing countries a viable alternative for funds, but it's up to those countries themselves to decide where they like to get funds, it's rather absurd to blame China for every woe in those countries, China is not responsible for their countries development planning and policy making. Before China went into the picture, developing countries can only get money from the west, didn't they have any woes and problems back then? or Only after China became a major global player and suddenly all the problems in those countries popped up?

China is not responsible to do the "advice" job for the money one borrows, it's not China's job. Western power did too much "advice" job on how the borrowers should use their money, in other words, too many strings attached, this is why more and more countries no long prefer western loans.

Totally agree. Borrowing countries should do their own planning and make wise and calculated decisions whether they want to take Chinese loan or any loan for that matter. The lender is not at fault here.

 

[CAPRICORN-88]

Chinese money is very bad for BD. We all know what your influences with the Burmese generals have done in that country.

We are a neighbor of Burma and we should not get a border with a country that is heavily influenced by China.

BD went to China for a loan because no other nation is prepared to lend her any money without a good collateral.

Learn to be grateful. Someone still prepare to offers a helping hand. Don't bite it.

Nobody owes your country BD a living.

The option is: Don't borrow and stop all the BS about being a good neighbour to Myanmar. Being none interfering is sufficient.

Myanmar's bilateral ties with other nations is none of BD's business just like your tie with others.

 

[satyamev]

Foreign Debt Summary

Department of External Resources

www.erd.gov.lk

View attachment 832719
The so-called Chinese debt is actually a deliberate term to sow dissension, and the Chinese debt is only 10% of Sri Lanka's total foreign debt.
Japan and Japan's Asian Development Bank is 23% of total debt.
9.9% from the World Bank
Except for two percent from India, the rest 55% are from Western financial institutions.

And the rest of the debt comes from borrowing new debt to repay old debt, which Sri Lanka doesn't actually get, and the money is immediately used to repay the previous debt.
China's debt is mainly used to build infrastructure, ports, Sri Lanka uses the rent of ports to pay loans, Sri Lanka gets new ports and infrastructure, domestic products can be easily transported to export, Sri Lanka can get real things.

can you divide the debt between long and short term.
Imf , world bank, Japan etc normally give very long term low interest loans while Chinese loans are at market or above market rates.

 

[xuxu1457]

can you divide the debt between long and short term.
Imf , world bank, Japan etc normally give very long term low interest loans while Chinese loans are at market or above market rates.

Sri Lanka's debt was a long-term problem, and both the long-term and the short-term aspects of the debt were relative。For example, if Sri Lanka had borrowed a 20-year dollar in 2002, it would have to repay that debt today in 2022.If faced with rising prices of oil and raw materials, foreign exchange will soon run out and new dollars will have to be borrowed

 

[bluesky]

can you divide the debt between long and short term.
Imf , world bank, Japan etc normally give very long term low interest loans while Chinese loans are at market or above market rates.

I have no idea what are the repayment terms and conditions, the rates of interest, the grace periods or the lengths of payment time.

However, the grace period is usually 10 years and the repayment period may be somewhere between 20 to 28 years. I only have a vague idea.

Sri Lanka's surprise finance minister has a mountain to climb

Ali Sabry on Friday confirmed that he was still finance minister when asked in what capacity he was talking in the parliament following his resignation on Tuesday

www.dhakatribune.com

 

[satyamev]

i Googled -

Sri Lanka caught in a 'strategic debt trap' - Times of India

Sri Lanka is now facing the worst economic crisis since gaining independence in 1948. The recession is attributed to foreign exchange shortages caused by the clampdown on tourism during the Covid-19 pandemic. This has left the country unable to buy enough fuel, with people facing acute scarcity...

www.google.com

As i expected, the issue is of massive debts undertaken in the last 10 years from China to build unproductive infrastructure.
Though I cannot blame China solely for taking advantage as sri Lanka is a educated country and its government economists should have stepped in to block the loans for fancy infrastructure.
The doubling of oil prices is putting a high load on all countries. India's foreign exchange reserves have reduced by 30 b usd in the last month, as India is supporting its currency by pumping in dollars.
From around 635 b usd , they are down to around 606 b usd.

 

[mb444]

BD went to China for a loan because no other nation is prepared to lend her any money without a good collateral.

Learn to be grateful. Someone still prepare to offers a helping hand. Don't bite it.

Nobody owes your country BD a living.

The option is: Don't borrow and stop all the BS about being a good neighbour to Myanmar. Being none interfering is sufficient.

Myanmar's bilateral ties with other nations is none of BD's business just like your tie with others.

Actually there are many countries lining up to lend BD as its current economic development and future potential is recognised.

We do not need to be grateful to China. Its a business transaction, both side benefits and deals will continue until it does not.

Where do you get that BD expects anyone to provide for it.

As the burmese it is a fascist state filled with hateful neanderthals. No one in BD gives a damn about the hellhole that is Burma but we will not accept progrom against the rohingya.

I personally am enjoying the current spectacle in burma....i wish it all the ill in the world...but it is probably unnecessary, you always reap what you sow.

 

[Indos]

can you divide the debt between long and short term.
Imf , world bank, Japan etc normally give very long term low interest loans while Chinese loans are at market or above market rates.

That is very logic since China is not a donor institution like IMF and World Banks where for this institution they lend to poor and developing nations with limited amount of fund. For Commercialized lending, some countries will go to Japan and China. Japan can offer low interest rate due to their very low and some time zero interest rate banking system due to their poor domestic economic growth performance while China can still grow at least 5 percent this year.

For country with poor rating so they cannot get low yield in their government bond issuance, they will rely on IMF, World Bank, ADB, IDB and also Japan and China (where both usually fund project done by their national companies usually in infrastructures sector).

 

[mb444]

I have no idea what are the repayment terms and conditions, the rates of interest, the grace periods or the lengths of payment time.

However, the grace period is usually 10 years and the repayment period may be somewhere between 20 to 28 years. I only have a vague idea.

Sri Lanka's surprise finance minister has a mountain to climb

Ali Sabry on Friday confirmed that he was still finance minister when asked in what capacity he was talking in the parliament following his resignation on Tuesday

www.dhakatribune.com

Every deal is different and I do not think you can generalise.

BD as a LDC was able to access loans at interest rates from international development institutions that essentially maintained the value of the funds in real term. Graduation from LDC will mean after a few years we will lose that.

However it is not a bad thing. Development loans such as these are only accessible to the GoB. Our private sector could not get access as an LDC tag reduced their credit rating and made loans more expensive.

As a DC BD private sector will get access to cheap loans. This will facilatate private secfor lead economic development which is the BD model.

 

[satyamev]

That is very logic since China is not a donor institution like IMF and World Banks where for this institution they lend to poor and developing nations with limited amount of fund. For Commercialized lending, some countries will go to Japan and China. Japan can offer low interest rate due to their very low and some time zero interest rate banking system due to their poor domestic economic growth performance while China can still grow at least 5 percent this year.

For country with poor rating so they cannot get low yield in their government bond issuance, they will rely on IMF, World Bank, ADB, IDB and also Japan and China (where both usually fund project done by their national companies usually in infrastructures sector).

world bank, imf dont give loans at the drop of a hat. There are lots of conditions attached.
China wants to generate manufacturing orders and employment for its own country, so the loans are tied to sourcing from china only.
Its a double profit- all the profits go to Chinese industry and the Chinese then get back the original loan with good interest.
Its for the receiver to study whether the project generates returns, which countries with populist governments dont.

 

[Indos]

world bank, imf dont give loans at the drop of a hat. There are lots of conditions attached.
China wants to generate manufacturing orders and employment for its own country, so the loans are tied to sourcing from china only.
Its a double profit- all the profits go to Chinese industry and the Chinese then get back the original loan with good interest.
Its for the receiver to study whether the project generates returns, which countries with populist governments dont.

Thats why I said IMF, World Bank, IDB, only offer limited amount of fund. Their interest is low but we cannot rely on them unless if we are ready to be controlled like what happen with Indonesia during 1997-2008 where we have to let go our N 2130 and N 250 program ( aero planes ) and other thing like privatizing Astra International where at that time is part of our SOE

Some time they do generous thing like during Covid.....

Yup, I see Chinese loan is likely to back their own local industries. This is just my analysts, actually our SOE in infrastructure get quite huge Chinese fund, these projects are done by themselves, despite so our state owned steel company, PT Krakatau Steel accuses our own SOE use imported steels during their projects.

I see maybe there is some kind of restriction in how our SOE should use the money although it is just my analyst, there is no SOE in infrastructure saying they must use Chinese raw material like steel when they get Chinese loan.

 

[satyamev]

Thats why I said IMF, World Bank, IDB, only offer limited amount of fund. Their interest is low but we cannot rely on them unless if we are ready to be controlled like what happen with Indonesia during 1997-2008 where we have to let go our N 2130 and N 250 program ( aero planes ) and other thing like privatizing Astra International where at that time is part of our SOE

Some time they do generous thing like during Covid.....

Yup, I see Chinese loan is likely to back their own local industries. This is just my analysts, actually our SOE in infrastructure get quite huge Chinese fund, these projects are done by themselves, despite so our state owned steel company, PT Krakatau Steel accuses our own SOE use imported steels during their projects.

I see maybe there is some kind of restriction in how our SOE should use the money although it is just my analyst, there is no SOE in infrastructure saying they must use Chinese raw material like steel when they get Chinese loan.

you will see that Chinese investment in Indian infrastructure is negligible in the last 20 years.
Their some companies get execution orders from open tenders , and equipment supply orders in power generation (India had very very bad experience with Chinese quality in power generation equipment).
I think it was a conscience decision by the Chinese not to invest in India, to discourage competition. And ofcourse India studies and discusses all its projects threadbare for years. paralysis by analysis i call it.
We burnt our fingers with enron , gas based power generation, totally uneconomical.
For countries like Indonesia with large populations, manufacturing small planes is never going to be enough. Its a tough space , requiring great expertise and a sophisticated supply chain. It wouldn't generate adequate employment. Very niche.
Chinese with their subsidized manufacturing easily undercuts other countries and this has been a bane for Indian industry too.

 

[bluesky]

Please watch to know if BD mega projects are any different from the SL projects.

 

[xuxu1457]

you will see that Chinese investment in Indian infrastructure is negligible in the last 20 years.
Their some companies get execution orders from open tenders , and equipment supply orders in power generation (India had very very bad experience with Chinese quality in power generation equipment).
I think it was a conscience decision by the Chinese not to invest in India, to discourage competition. And ofcourse India studies and discusses all its projects threadbare for years. Analysis by paralysis i call it.
We burnt our fingers with enron , gas based power generation, totally uneconomical.
For countries like Indonesia with large populations, manufacturing small planes is never going to be enough. Its a tough space , requiring great expertise and a sophisticated supply chain. It wouldn't generate adequate employment. Very niche.
Chinese with their subsidized manufacturing easily undercuts other countries and this has been a bane for Indian industry too.

 

[TNT]

How is srilankan crisis a chinese made problem when the chinese debt is just 10℅ of all srilankan debt. Typical American pigs and their lies.
I hope there are ppl with balls in Bangladesh that can tell US that u should not lecture us abt others and only talk abt US trade. Im damn sure chinese never wvwn mention the US in their interactions with Bangladesh. The US acting like a maassi going around im steeets and bad mouthing china.