Finance Minister AHM Mustafa Kamal pointed out the case of Sri Lanka where an economic crisis was exacerbated due to infrastructure projects funded by Chinese debt that failed to generate adequate returns.
Bangladesh’s finance minister, AHM Mustafa Kamal sounded a warning to developing countries about a lurking Chinese debt trap sugar coated as a Belt and Road Initiative (BRI) loan. In an interview to a local business newspaper, the finance minister said that developing countries must think twice before taking BRI loans, bearing in mind global inflation and slowing growth which add to the debt burden of the emerging economies that most developing nations are.
“Whatever the situation [that] is going on worldwide, everybody will be thinking twice to agree to this project,” Kamal said, suggesting a more rigorous evaluation of the loans by Chinese authorities as the poorer countries risk falling into debt trap. “Everybody is blaming China. China cannot disagree. It’s their responsibility.”
He pointed out the case of Sri Lanka where an economic crisis was exacerbated due to infrastructure projects funded by Chinese debt that failed to generate adequate returns. He said the Sri Lanka crisis highlighted that China had not been rigorous enough in deciding the loans. It needs to “make a thorough study” before lending to a project, he said. “After Sri Lanka . . . we felt that Chinese authorities are not taking care of this particular aspect, which is very, very important.”
Wang Yi’s weekend visit
Kamal’s comments came within days of China’s foreign minister Wang Yi weekend visit to Bangladesh to meet with prime minister Sheikh Hasina and Bangladeshi foreign officials. In a statement, China called itself “Bangladesh’s most reliable long-term strategic partner” and said the pair agreed to strengthen “co-operation in infrastructure”.
Prior to this Yi’s visit, Bangladesh Foreign Secretary Masud Bin Momen had emphatically denied any talk of fresh loans from China. Briefing the media after the visit of Chinese Foreign Minister Wang Yi,
Bangladesh foreign minister Dr A K Abdul Momen too said that Chinese funding was coming in dribbles. He said that while 27 projects are currently being implemented in partnership with China, Bangladesh had received less than a fifth of the US$ 20 billion slated for disbursal.
Bangladesh became a part of the China-led BRI in 2016 when Chinese President Xi Jinping announced a US$ 40 billion package – US$ 26 billion for BRI projects and another US$ 14 billion on joint ventures. The BRI projects included the Padma bridge rail link for US$ 2.6 billion, the Dhaka-Sylhet four lane highway project for US$ 2.1 billion, the construction of a tunnel under the Karnaphuli river that was budgeted for US$ 705 million, besides several other projects.
