Chinese investment under the Belt and Road Initiative (BRI) across the world is causing alarm among the beneficiaries, as China’s debt-diplomacy only reaps profits for Beijing while countries are pushed towards an economic crisis.
The recent warning by Bangladesh finance minister AHM Mustafa Kamal or the recent cancellation of a key Chinese-financed project by Zambia are sharp pointers, an America-based publication reported. Zambia, working to prevent China’s debt-diplomacy, recently cancelled USD 1.6 billion of Chinese loans. The Bangladesh finance minister had warned the developing countries that they “must think twice” about taking more loans through BRI as global inflation and slowing growth added to the strains on indebted emerging markets. In an interview with the Financial Times, Kamal also said China needed to be “more rigorous in evaluating its loans amid concerns that poor lending decisions risk pushing countries into debt distress.” The deep economic stress Pakistan is currently experiencing and the regime change in Sri Lanka amidst massive public protests have rattled many in South Asia even as experts elsewhere take note of these economies that are weak but remain significant as their wellbeing affects huge populations, the Financial post reported. Sri Lanka, where Chinese-backed infrastructure projects that failed to generate returns had exacerbated a severe economic crisis.