Chinese Lending to Sri Lanka: A Factual cum “Reality” Check

What is it about?

This is a response to the Briefing Paper entitled Evolution of Chinese Lending to Sri Lanka since the mid-2000s – Separating Myth from Reality, written by Umesh Moramudali and Thilina Panduwawala published by the China-Africa Research Initiative of the School of Advanced International Studies (SAIS) at the John Hopkins University, USA. This response identifies a few factual errors (both quantitative and qualitative) and provides alternative data, and contests the interpretations of the data and conclusion drawn therefrom by Moramudali and Panduwawala by providing concrete examples to the contrary. We characterise Chinese lending to Sri Lanka between 2007 and 2022 as quasi-predatory lending, having defined the characteristics of predatory lending.

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Why is it important?

Emerging new donors in the global aid architecture have disrupted responsible lending to needy countries, undermined due diligence in project financing, project grabbing through bribery and corruption in order to advance the geopolitical and geoeconomic interests of the new donor countries, and indeed undermined overall economic and political governance in recipient countries. It is high time for developing countries to undertake an introspection of the lure of new donors and easy credit from them.

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