India became the top bilateral lender to SL in 2022 after much needed crisis recovery assistance it provided. The Asian Development Bank is the largest multilateral lender next to India. From 2017 till 2021 China was the largest bilateral lender (Ref. financial sources). Many in the west and some in SL are still worried about the Chinese debt trap. Legend says that Prince Vijaya of India and his 700 men were trapped by Sri Lanka’s Apparel industry matriarch Kuveni and her dog. Hence, those worried about Chinese debt traps seems not worried about Indian debt traps. Kuveni’s story maybe analyzed in full by those interested. Sri Lankans should remember that all loans taken have to be paid no matter who the lender is. To repay the debts and take the country out of crisis, Kuveni’s descendants will have to redress their small wonder in another outfit but the welfare gown. In that process even practical saffron fraternity might agree on lesser number of lights needed to enlighten. .

In February 1978 addressing the house of Parliament, newly appointed President JRJ requested the members to turn the search light unto thy selves. Those who have doubts about redesigning the welfare state may follow JRJ’s advice if they wish to build a prosperous republic. When the Peoples Republic of China was established on 1^st October 1949, very few were willing to help them. USSR was the front runner and small states such as SL gave their support by recognizing the new government while many in the west didn’t till the UN recognized one China in 1971. US President Richard Nixon deserves credit for his moves towards China in 1972. Still since 1949, the PRC while fighting famine and poverty within has been helping all those who requested help. SL is one such state which received more grants especially during the 1970s. The PRC seems to have followed JRJs advice long before SL.

World in distress

During the recent days; USA central bank had raised interest rate to the highest level for 14 years, Reserve Bank of Australia had hiked interest rates by 50 basis rates and raised the cash rate to 2.35% and Bank of Canada had hiked a key interest rate by 75 basis points to 3.25% noting a record since 2008 in an attempt to control inflation (Ref. financial sources). Some economists view that these moves would flow more wealth from developing countries to the strong economies due to market behavior. That will make the weak economies weaker according to them. In the late 1990s many strong far eastern economies fell resulting in the fall of powerful governments such as Indonesia’s Suharto rule. Far eastern states which relied less on the western lending agencies somehow managed to withstand the 1990s blow according to some analysts. China was one such.

BRI life line

In this crisis the Belt and Road of China is a life saving opportunity that has come along the ancient maritime Silk Road.  The BRI is aimed at developing trade, investment and infrastructure connecting the partners along the ancient Silk Road. SL also developed infrastructure using most of Chinese loans. Its high time SL uses the structures for income generation. Most attractive land marks along the BRI includes; Gwadar Port in Pakistan, Mombasa Nairobi and China Laos railways, new capital of Egypt and Haifa port in Israel. This indeed will be a passage of life for SL when China connects to Africa and the Middle East through the Indian Ocean. If the economy is strengthened with the BRI, SL may repay its debts in violet.

(The writer is an academic and a broadcaster. Views expressed are personal and may not be the views of his affiliations).