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> In other words, what has changed It's often a series of mis-steps that lead to catastrophic failures such as being suffered by Srilanka. Here are a few that

> In other words, what has changed It's often a series of mis-steps that lead to catastrophic failures such as being suffered by Srilanka. Here are a few that come to my mind, in no particular order. 1. Tourism took a big hit due to COVID lockdowns. 2. They took on huge debt from China to fund their massive infrastructure developments with close to zero plan as to how to reap the benefit of that infrastructure. For instance this airport[1] 3. The knee jerk banning of fertiliser. 4. Corrupt and authoritarian (despite being democratically elected) government favouring their cronies. News articles trying to analyse look for a recent bad policy choice such as fertiliser ban but one could see that even 5 years ago that Srilankan economy was being badly managed. The ingredients of catastrophe were there and COVID acted as the catalyst. [1] https://www.forbes.com/sites/wadeshepard/2016/05/28/the-story-behind-the-worlds-emptiest-international-airport-sri-lankas-mattala-rajapaksa https://www.forbes.com/sites/wadeshepard/2016/05/28/the-stor... [2] https://www.reuters.com/markets/commodities/sri-lanka-rows-back-organic-farming-goal-removes-ban-chemical-fertilisers-2021-11-24/ https://www.reuters.com/markets/commodities/sri-lanka-rows-b...

FooBarWidget 4y ago
#2 is actually false. Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones. See this detailed report by The Atlantic: The Chinese ‘Debt Trap’ Is a Myth https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/ https://www.theatlantic.com/international/archive/2021/02/ch... And this study by British campaign charity Debt Justice, which found that the situation in Africa is similar: https://debtjustice.org.uk/press-release/african-governments-owe-three-times-more-debt-to-private-lenders-than-china https://debtjustice.org.uk/press-release/african-governments... The Chinese debt trap is a lie made by mainstream media, who for some reason blindly writes negative China articles without any kind of factual investigation. Worse, these lies distract us from actual debt traps initiated by western actors — over we which we have far more control than China. If we actually care about these countries then we need to first demand from the media that they do factually correct reporting.
- InvertedRhodium 4y ago
  Are there any examples of western nations taking control of power grids, ports, etc, when those loans are defaulted on?
  - epups 4y ago
    Yes, privatization was heavily pushed by the IMF in Latin America and Africa as a condition for receiving loans [0]. [0] https://en.wikipedia.org/wiki/Structural_adjustment https://en.wikipedia.org/wiki/Structural_adjustment
  - clarionbell 4y ago
    It used to be, mind you some decades ago, a normal policy for foreign government to keep what they have payed for. Take Panama or Suez canal. That being said, the practice is essentially colonialism and for various reasons it became taboo in the west. Publicly that is. If you are private company there is still a lot of things you can get away with, but you won't get gunboats to show up anymore. Simply put. China is doing the same thing. Performing business like decisions on international scale. West has just decided that such approach is immoral and mostly abandoned it as a policy.
    - vishnugupta 4y ago
      > West has....abandoned it as a policy. Has it though? They don't do it overtly but through IMF. When a debt ridden country approaches IMF for help that help comes with heavy strings attached such as cutting down social spending, and privatisation. And IMF is controlled by ex-colonial nations. Even a developed nation like Greece got a taste of it. The funny thing is through a debt ridden country IMF is in fact helping debtors who are mostly western entities. There are quite a few layers here to peel but safe to say west hasn't abandoned their policy just that they outsourced it to IMF.
    - FooBarWidget 4y ago
      If the lending country is poor and one does not take the asset itself as collateral, then how does one lend to these countries? Don't lend at all? What should these countries do to acquire critical infrastructure?

FooBarWidget 4y ago

#2 is actually false. Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones. See this detailed report by The Atlantic: The Chinese ‘Debt Trap’ Is a Myth https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/ https://www.theatlantic.com/international/archive/2021/02/ch... And this study by British campaign charity Debt Justice, which found that the situation in Africa is similar: https://debtjustice.org.uk/press-release/african-governments-owe-three-times-more-debt-to-private-lenders-than-china https://debtjustice.org.uk/press-release/african-governments... The Chinese debt trap is a lie made by mainstream media, who for some reason blindly writes negative China articles without any kind of factual investigation. Worse, these lies distract us from actual debt traps initiated by western actors — over we which we have far more control than China. If we actually care about these countries then we need to first demand from the media that they do factually correct reporting.

InvertedRhodium 4y ago
Are there any examples of western nations taking control of power grids, ports, etc, when those loans are defaulted on?
- epups 4y ago
  Yes, privatization was heavily pushed by the IMF in Latin America and Africa as a condition for receiving loans [0]. [0] https://en.wikipedia.org/wiki/Structural_adjustment https://en.wikipedia.org/wiki/Structural_adjustment
- clarionbell 4y ago
  It used to be, mind you some decades ago, a normal policy for foreign government to keep what they have payed for. Take Panama or Suez canal. That being said, the practice is essentially colonialism and for various reasons it became taboo in the west. Publicly that is. If you are private company there is still a lot of things you can get away with, but you won't get gunboats to show up anymore. Simply put. China is doing the same thing. Performing business like decisions on international scale. West has just decided that such approach is immoral and mostly abandoned it as a policy.
  - vishnugupta 4y ago
    > West has....abandoned it as a policy. Has it though? They don't do it overtly but through IMF. When a debt ridden country approaches IMF for help that help comes with heavy strings attached such as cutting down social spending, and privatisation. And IMF is controlled by ex-colonial nations. Even a developed nation like Greece got a taste of it. The funny thing is through a debt ridden country IMF is in fact helping debtors who are mostly western entities. There are quite a few layers here to peel but safe to say west hasn't abandoned their policy just that they outsourced it to IMF.
  - FooBarWidget 4y ago
    If the lending country is poor and one does not take the asset itself as collateral, then how does one lend to these countries? Don't lend at all? What should these countries do to acquire critical infrastructure?