WASHINGTON, Feb.13 (Xinhua) – China’s “debt trap diplomacy” narrative is just a big lie that misrepresents China and the developing countries with whom it negotiates, say two American experts.
The past US administration promoted the fallacy of “debt trap diplomacy” by taking as an example the port of Hambantota in Sri Lanka to warn against the strategic use of debt by China, according to an article co-authored by Deborah Brautigam, professor in international political economy from Johns Hopkins University, and Meg Rithmire, associate professor at Harvard Business School.
An investigation by the co-authors showed that Chinese lenders are willing to restructure the terms of existing loans and have never seized an asset from any country, much less the port of Hambantota, according to the article published in The Atlantic magazine, which clarifies the background and schedule of the aforementioned infrastructure project.
With a feasibility report developed by Danish engineering firm Ramboll in 2006, the Sri Lankan government approached the United States and India for financing the port project, but both turned it down.
In 2007, with the lobby of the China Harbor Engineering Company, the Export-Import Bank of China offered a 15-year commercial loan for more than US $ 300 million for the project, and the group won the contract. At that time the long civil war in Sri Lanka was still ongoing.
The authors cited the former president of the Sri Lanka Port Authority, Saliya Wickramasuriya, who said that “obtaining commercial loans of up to $ 300 million during the war was not easy.”
In addition, there was no breach either, as some rumors claim, according to the investigators, although the port was losing money in 2014. In reality, “Colombo organized a rescue from the International Monetary Fund and decided to raise much needed dollars by renting the port of Hambantota , which was underperforming, to an experienced company, “they explained.
Sri Lanka chose China Merchants Port Holdings, making it the majority shareholder with a 99-year lease, and used a $ 1.12 billion infusion to bolster its foreign reserves, but not to pay off debts, according to the article.
“With a new administration in Washington, the truth about the widely misunderstood, perhaps intentionally, Hambantota port case will be updated,” they wrote.
Meanwhile, on the other side of the debt trap myth are debtor countries, who are also offended by the narrative that they could easily be fooled.
Speaking to the co-authors on condition of anonymity, a Malaysian politician wondered if the US State Department could differentiate between anti-contrast campaign rhetoric and the truth.
Events related to the Sri Lankan port revealed how the world is changing, the academics said. “China and other countries are getting more sophisticated when negotiating with each other. And it would be a shame if the United States did not learn from them.”
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