(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
Bigger and richer economies should invest in smaller Asian ones if they want to counter China’s expanding Belt and Road Initiative, Sri Lankan President Gotabaya Rajapaksa said.
“I want to tell India, Japan, Singapore and Australia and other countries to also come and invest in us,” Rajapaksa said in an interview with the Hindu newspaper. “They should tell their companies to invest in Sri Lanka and help us grow, because if they do not, then not only Sri Lanka, but countries all over Asia will have the same (problem).”
China’s Belt and Road Initiative has resulted in an estimated $575 billion worth of energy plants, railways, roads, ports and other projects. But President Xi Jinping’s signature effort has also come in for criticism, including accusations that China is luring poor countries into debt traps for its own political and strategic gain.
Sri Lanka’s new government led by Rajapaksa is trying to undo the previous regime’s move to lease the southern port of Hambantota to a Chinese venture, citing national interest. There were concerns in India about its geopolitical rival using a port close to its southern coastline for future military uses.
The local government must have control of all strategically important projects like Hambantota, Rajapaksa told the Hindu paper. While Sri Lanka has come under scrutiny for its ties with China, its agreements were “purely commercial,” he said.
A port deal similar to Hambantota under the Belt and Road program in Myanmar was drastically scaled back to $1.3 billion from $7.5 billion, while in Malaysia the government canceled $3 billion worth of pipelines and renegotiated a rail project in 2019, cutting that one’s cost by a third to $11 billion.
“The main issues India could have with us would be on (our relations) with China or Pakistan, but if we don’t do anything that creates suspicions amongst Indian authorities, there will not be any problem,” Rajapaksa said. “The Chinese will take the Belt and Road Initiative all over unless other countries provide an alternative.”
To contact the reporter on this story: Anurag Kotoky in New Delhi at firstname.lastname@example.org
To contact the editors responsible for this story: Shamim Adam at email@example.com, Sara Marley
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.