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Sri Lanka is not falling into a Chinese debt trap: PM

2018-09-12 12:52:06
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Prime Minister Ranil Wickremesinghe, who is in Vietnam, has said he didn't believe that Sri Lanka was falling into a debt trap caused by high-interest Chinese loans.

On the sidelines of the World Economic Forum on ASEAN in Hanoi on Tuesday, Mr. Wickremesinghe has told the CNBC that,“We are dealing with China. There are a fair amount of Chinese investments. There are China loans…I can't see it as a threat,”

The Premier has also denied the often cited claim that Sri Lanka was ceding control of strategically vital ports to Chinese control.

He has said the government inherited debt racked up through the mismanagement of the prior administration.

"We took over the government and stabilized the economy ... they ran away, we were the only ones left," he said.

Meanwhile, he said Sri Lanka is not under "threat" from growing China-US trade tensions, despite Sri Lanka’s reliance on Chinese investment.

Despite concerns voiced earlier this month by ratings agency Fitch about a "challenging" external debt servicing outlook and political uncertainty following regional polls, Mr. Wickremesinghe has said he didn't believe Sri Lankan sovereign bonds were on the verge of a downgrade.

"We and many others are running deficits in Asia and that certainly would be a matter of concern, but so far we have been able to negotiate with the rating agencies and it has certainly not affected our borrowing capacity," he said.

Japanese bank Nomura Holdings on Monday identified Sri Lanka as one of 30 emerging markets most susceptible to an exchange rate crisis, a claim vehemently denied by Sri Lanka's central bank and Mr.Wickremesinghe, who called it "false."

Sri Lanka, bailed out by the International Monetary Fund (IMF) in 2009 and mid-2016, should not need further support from the global lender, the prime minister said.  

"We have been going to the IMF a bit too often ... Sri Lanka and Pakistan, and I hope that we will be able to manage. The IMF saved us at a crucial period, I must acknowledge it, but we must learn now to go on our own," he said.

Meanwhile, Mr.Wickremesinghe has said he "can't see an early election."

Sri Lanka not under 'threat' from US-China trade tensions, says PM from CNBC.


  Comments - 13

  • Saman Wednesday, 12 September 2018 13:00

    He knows nothing. It already happened.

    Reply : 13       24

    Ranil Ponweera Wednesday, 12 September 2018 13:25

    The impression that there is a Chinese Debt Trap, was created by him. Now when he admits that he lied, no one believes him.

    Reply : 1       30

    Nahfees Wednesday, 12 September 2018 13:17

    True that ! We have already fallen. I sincerely hope you will retire with dignity. You are plain talker, we need guys who can execute. I do not support Gota, good or bad the guy is meticulous in execution.

    Reply : 12       25

    Unchikun Wednesday, 12 September 2018 13:20

    I totally agree with you Sir, we are not falling into a debt trap, we are in it. Need a new fresh leader to get us out of this mess.

    Reply : 5       28

    shan Wednesday, 12 September 2018 13:34

    He has the knowledge, great vision, composer and experience to lead Sri Lanka to prosperity, I don't see anyone in the JO has the capability. People should support him to continue for another 5 years and see. A country in such a state cant be turned prosperous within few years it needs a decade at least. I wish he Build a bridge to India and connect it to the world, So Sri Lankans can drive up to China, Russia and even Europe from Sri Lanka .this will be great for tourism and economy since many vehicle manufacturers and others have plants in south India

    Reply : 44       31

    Jaliya Wednesday, 12 September 2018 20:45

    Pal, you need to see your family doctor immediately and explain your uncomfort ... he will proscribe you something much milder.

    Reply : 10       15

    POTTA HARRY Wednesday, 12 September 2018 14:56

    Money given by parents to children cannot consider as loans. Similarly monies given by China to its Colony no longer to be considered as loans. What he says is correct

    Reply : 4       13

    Soam Wednesday, 12 September 2018 15:29

    Mister PM, Sri Lanka is already inside Chinese debt trap. Your GDP is not high enough to atleast service the loans. It means you have to borrow more to pay the interest and for other expenditure. Curtail in essay infrastructure investment, increase tax , reduce perks such as duty free vehicles to parliamentarians. Simply have a discipline fiscal policies and abide by. Remember Greece.

    Reply : 4       15

    Sunil Wednesday, 12 September 2018 15:48

    If what you say is true good for the country. But why are so many other countries still using Sri Lanka as an example to show Chinese colonization and takeover!?Are we doing enough to protect our nation from this modern colonization?

    Reply : 5       10

    MP Wednesday, 12 September 2018 15:49

    But Sri Lanka fell into CB head - Mahendran's trap.

    Reply : 2       14

    observer Wednesday, 12 September 2018 19:08

    He believes but not the facts.

    Reply : 0       5

    dickie bird Wednesday, 12 September 2018 20:43

    China is to give 60b to African states in the next 03 years for various kind of development said Mr. Xi Jinping.Without loans and Development A country can not progress.Further, China has said these funds for partmership development and also agreed to write off debts too.West have developed cold feet and Rani's Yahapalanayal is unable to exists anymore sans China assistance or he is planning to prop up CB for another round of cleaning. This fox has exposed himself to be a damn rogue in clean suit. media has misled us to believer over the years that this Rani can do wonder for the economy.

    Reply : 1       6

    RP Wednesday, 12 September 2018 21:29

    PM you’re dead wrong. We are almost choking like Pakistan’s with it’s heavy debt owed to China. This is why many calling Pakistan a colony of China.There is a pattern how Chinese are manipulating land for debt. Part of Pakistan occupied Kashmir and Gwadar port and Hambantota in SL.

    Reply : 4       8

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