SRI LANKA – CHINA Ports, financing and assistance: Colombo accelerates on its way to Beijing

The Sri Lankan government ignores US warnings and India’s security concerns. The latest funding of nearly $400 million will go to support the construction of a port complex in the capital. China, world leader in maritime trade.

Colombo () – To counter the economic crisis, Colombo is ignoring the warnings of its allies and neighboring countries, betting on an ever closer embrace with China. Ignoring US warnings that the root of Sri Lanka’s difficulties lies in its dependence on Beijing and its infrastructure megaprojects (which pose a security problem for India), government leaders are tightening the throttle. The objective is to obtain new funds and aid within the framework of the Belt and Road Initiative (BRI), as shown by the latest investment signed in May with the China Merchants Group for a port logistics complex in the capital for a value of 392 million Dollars.

The Colombo port, opened in 2014 and scheduled for completion in 2041, requires an investment of $15 billion, aims to rival Dubai and is just the latest in a series of major infrastructure projects by Beijing in Sri Lanka. After all, China is home to some of the world’s largest and best-connected commercial ports, and directly owns or controls at least 10 of the world’s top 100. To them are added many other smaller ones on the coasts and in the interior, which are necessary to sustain the export chain.

In an interview granted to , economist Viraj Samarakoon noted that “according to the Liner Shipping Connectivity Index (LSCI), which evaluates countries and their container ports,” China is the industry leader with “close to 80% of world trade moving by sea “. That is why, he added, it has become “crucial” for Beijing to take advantage of shipping networks as part of “a broader development plan driven by the export sector.”

Scholars Samantha Hewapathirana and Anuradha Wijetillake believe that “Beijing’s efforts to shape global maritime connectivity do not end at China’s borders.” And the scale of the activities has raised questions about the potential repercussions in recipient countries, including the broader implications of growing economic influence.” One such example is the port of Hambantota which was leased to a Chinese state-owned company. to pay off (or reduce) part of Colombo’s debt to Beijing: a decision that raised concerns about Chinese economic influence and the potential risks for smaller countries in signing expensive development deals with China.”

Some critical voices recall the accusations against Beijing on the issue of territorial sovereignty. Economist Sanuth Wijewardena explained that “Since 2021 Sri Lanka has been experiencing high fiscal deficits, unprecedented levels of inflation and rising prices for basic and essential goods, including medicines. Due to depleting foreign exchange reserves, Colombo announced that it would suspend external debt payments in April 2022”. At the time, the value “was $34.8 billion, half of which was market loans. The biggest creditors,” he concluded, “were China, the Asian Development Bank and the World Bank.”