The government in the Sri Lanka has collapsed amid an economic crisis created by mounting Chinese debt. Ranil Wickremesinghe, prime minister of the island nation in the Indian Ocean, was forced to resign, paving the way for an all-party government after thousands of protesters took over the presidential palace and key government offices over the weekend.
President Gotabaya Rajapaksa was reportedly moved to a safer location as demonstrators from across the country marched on capital Colombo. They blame his government for the biggest economic crisis in the country’s 74-year history caused due to mounting Chinese debts. “Many blame the Rajapaksa family, in power for years, for mismanaging the economy and borrowing heavily from China,” the BBC noted Sunday.
“Thousands of Sri Lankan protesters stormed into the president’s official residence in Colombo on Saturday, demanding his resignation as public anger grows over the country’s worst economic crisis in seven decades,” Reuters reported. “Soldiers and police were unable to hold back the crowd of chanting protesters, who also forced their way through heavy metal gates into the Finance Ministry and President Gotabaya Rajapaksa’s sea-front offices,” the news agency added.
The Associated Press reported the political turmoil:
Sri Lanka’s Prime Minister Ranil Wickremesinghe has agreed to resign after party leaders in Parliament demanded both he and the embattled president step down on the day protesters stormed the president’s residence and office.The prime minister’s spokesman, Dinouk Colambage, said Wickremesinghe told party leaders that he will resign when all parties have agreed on forming a new government.His decision came after the biggest protest yet swept Sri Lanka on Saturday as tens of thousands of people broke through barricades and entered President Gotabaya Rajapaksa’s residence and nearby office to vent their fury against a leader they hold responsible for the nation’s worst economic crisis. (…)Sri Lanka’s economy is in a state of collapse, muddling through with aid from India and other countries as its leaders try to negotiate a bailout with the International Monetary Fund. The economic meltdown has led to severe shortages of essential items, leaving people struggling to buy food, fuel and other necessities.
The economic crisis, which led to acute food shortages and fuel price hike, resulted from Sri Lankan government’s inability to repay Chinese debt. Billions of dollars of debt was incurred by pouring money in infrastructure projects and purchase of military weaponry, taking the country to the brink of bankruptcy.
Between 2010 and 2015, “[o]ver $5 billion in Chinese loans fueled an infrastructure boom,” the Japanese business newspaper Nikkei reported in May 2022. Financing projects “ranging from a new port to an airport and broad highways that cut across the rural hinterland.”
Beijing became island nation’s biggest weapons supplier. “China had been a key weapons supplier to Colombo as the final years of the war intensified under Mahinda, with Chinese arms sales rising to $1.8 billion,” Nikkei added.
The massive Chinese investment in Sri Lankan infrastructure was part of Beijing’s global Belt and Road Initiative (BRI), a multi-billion project that seeks to give China the control over strategic ports, highways and railway networks across Asia and Africa.
Sri Lanka is of particular interest to China, as the Communist regime tries to encircle India, its key Asian rival. The Chinese People’s Liberation Army (PLA) is pursuing a “string of pearls” strategy at sea by taking control of key ports and islands stretching from the Indian Ocean to the Persian Gulf. The move effectively gives PLA the ability to impose a naval embargo on India in case of a military conflict.
Sri Lanka is not the only Asian nation battling unsustainable Chinese debt. As Nikkei daily noted, “Beijing’s debt map spans Cambodia, Laos and Myanmar to the Maldives and Nepal.”
President Donald Trump’s administration repeatedly warned developing countries in Asia and Africa to beware of China’s uses of ‘debt diplomacy’ to rob them of their national sovereignty. In June 2020, then-Secretary of State Mike Pompeo urged developing nations to resist the lure of generous Chinese loans. Beijing was creating “an unsustainable debt burden” to subjugate poor countries, he cautioned.
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