Free Republic

The Issue Unable to repay its debt, Sri Lanka gave China a controlling equity stake and a 99-year lease for Hambantota port, which it handed over in December 2017.The economic rationale for Hambantota is weak, given existing capacity and expansion plans at Colombo port, fueling concerns that it could become a Chinese naval facility. Recommendations Recipient countries should link infrastructure projects to broader development strategies that assess projects within larger networks and monitor overall debt levels.The international community should expand alternatives to Chinese infrastructure financing but cannot and should not support all proposed projects. The view from Hambantota’s Martello Tower...

China has often been accused of luring the poor African countries in its debt-trap by providing them loans for much-needed infrastructure projects and then control them when they fail to pay off their debts. Tanzania President John Magufuli has cancelled a Chinese loan worth $10 billion signed by his predecessor Jakaya Kikwete to construct a port at Mbegani creek in Bagamoyo over terms and conditions that, he said, beat the logic. Magufuli said that the terms of the Chinese loan agreement could only be accepted by a drunken man. His predecessor, Jakaya Kikwete had signed the deal with Chinese...