Repeated cycles of borrowing from capital markets, including the International Sovereign Bonds, have made them the largest source of foreign funding for Sri Lanka. The Asian Development Bank (ADB) is in second place with a 14.3% share, having lent $4.6 billion. Japan is at 10.9% and China at 10.8%, with each having lent about $3.5 billion each.
The rest of the debt is owned by countries such as India and international agencies including the World Bank and United Nations.”
Blaming China which has actually built a lot of infrastructure including the Norichcholai power plant that has given us electricity plants, BMICH, port city etc in Sri Lanka, unlike the US and EU which has NOT built anything but rather is asset stripping lands and Energy assests like the Yughadanavi power plant is absurd!
The US and its EU and its AUKUS friends are trying to sabotage the Chinese development projects with Hybrid Economic War against Lanka (2019 Ester attacks on Shangri La hotel) , beggering the island county and then blaming the Chinese for building something.. with the Fake News about “Chinese debt traps” and lets not forget that the Law was changed to make an American Citizen, Basil Rajapakse, who is corrupt the “Minister of Economic Disaster! Guess who was behind that one?
Please see this link:https://www.reuters.com/
A NOTE from THUPPAHI: also see “Truthseeker”: “Sri Lanka’s Financial Crisis,”11 April 2022,
One response to “The Principal Roots of Sri Lanka’s Economic Crisis”
This analysis is very welcome as there is lot of ‘hogwash’ regarding the current financial imbroglio that is devastating the current lives of ordinary Sri Lankans.
Capital expenditure especially for infrastructure builds are long term. Nishan De Mel, CEO of Verite Research articulates that the interest from such loans especially from EXXIM Bank of China bears a consolidated interest payment of two percent for a period of 19 years. The toatal payment for these Capital Expenditure (inclusive of some principal) amounts to approximately 150 million (not billion) USD per annum.
The curent payment of International Sivereign Bonds was borrowing during the Yahapalanaya GoSL who borrowed 12,5 billion USD at 6.5 percent interest with a payback period of two years inclusive of capital.
In essence the Yahapalanaya GoSL left an economic time bomb when they left office for the incoming administration to pickup and remedy.