10% of expensive debt built over a short period of time is pretty massive.
It’s, however, not the sole, or even one of the larger causes of Sri Lanka’s current issues.
That being said, if the same money was raised from the IMF, the IMF would work with Sri Lanka to help resolve their issues much better than what China does. And it would probably have prevented the govt from taking some
Of the worst actions they took that did contribute to the problems Sri Lanka is facing by threatening to withold money during future funding rounds.
The reason a lot of authoritarian and corrupt governments have been opting for Chinese debt is because it comes with no strings attached. It’s expensive, and China is happy as long as they are paid (plus their companies and workers get work), and if they’re not paid they’re happy taking over whatever property the loan was secured with.
The IMF, OTOH, works with countries to instill better discipline, and while there are justifiable criticisms about it, it’s way overblown, because this is usually the alternative.
It’s, however, not the sole, or even one of the larger causes of Sri Lanka’s current issues.
That being said, if the same money was raised from the IMF, the IMF would work with Sri Lanka to help resolve their issues much better than what China does. And it would probably have prevented the govt from taking some Of the worst actions they took that did contribute to the problems Sri Lanka is facing by threatening to withold money during future funding rounds.
The reason a lot of authoritarian and corrupt governments have been opting for Chinese debt is because it comes with no strings attached. It’s expensive, and China is happy as long as they are paid (plus their companies and workers get work), and if they’re not paid they’re happy taking over whatever property the loan was secured with.
The IMF, OTOH, works with countries to instill better discipline, and while there are justifiable criticisms about it, it’s way overblown, because this is usually the alternative.