Bangladesh's finance minister warns of CCP's debt traps

 Research, editing : Gan Yung Chyan, KUCINTA SETIA

News on Bangladesh, CCP, Nepal, Laos, Kenya

News (1) to (5) / Reporter : Li Zhaoxi / Editor: Lin Qing / https://www.ntdtv.com/gb/2022/08/11/a103499851.html

News (1)

Bangladesh's finance minister warns of China's debt trap series

Image : A gas station in Dhaka is full of people after the Bangladesh government raised fuel prices on 5 August  2022. (Munir Uz Zaman/AFP via Getty Images)

The CCP's "debt trap" is gradually pushing some fragile countries into economic crisis. Bangladesh's finance minister on Sunday (7 August 2022) ​​sounded the alarm, warning developing countries to think twice about securing loans from China's Belt and Road Initiative (BRI) amid the pressure of global inflation and slowing economic growth .

As Bangladeshi Prime Minister Sheikh Hasina met with Chinese Foreign Minister Wang Yi on Sunday, Bangladeshi Finance Minister Mustafa Kamal pointed out in an interview with the Financial Times that China should  be responsible for the debts of the developing countries borne by the BRICS project.

"Everyone is blaming China (the Communist Party), China (the Communist Party) cannot refute it, it is their responsibility." Kamal said.

Kamal accused CCP of not conducting rigorous research before advancing the BRI, which has plunged some countries into debt crises, citing the example of Sri Lanka.

This year, Pakistan has fallen into a serious economic crisis, and the Sri Lankan government has just undergone a huge transformation. The depletion of foreign exchange reserves has caused inflation to skyrocket, and the public has launched a large-scale revolt.

News (2)

Nepal bans luxurious imports due to falling foreign exchange reserves

Nepal, which also foresaw the economic crisis, banned the import of cars and other luxury goods earlier this year due to falling foreign exchange reserves. Bangladesh became the latest Asian country to turn to the International Monetary Fund (IMF) last month for a $4.5 billion loan amid a financial shock from rising international fuel prices. Laos also faces a high risk of default.

These countries all have one thing in common, they are all part of the CCP’s BRI, and while experts have been warning low- and middle-income countries for years not to engage in CCP’s “debt” diplomacy, they are all confounded by Beijing’s “huge investment” live.

News (3)

Bangladesh and Nepal in economic crisis unwilling to accept loans from CCP

Bangladesh owes Beijing about $4 billion, or 6 percent of its total external debt. Bangladesh's currency has plummeted against the dollar in recent months as the government has been forced to impose strict austerity measures. Bangladesh has made it clear to the CCP that it is only willing to accept grants from Beijing and is unwilling to accept any more loans. Nepal made the same claim.

News (4)

Lao PDR in high risk of debt default

Laos is also at high risk of debt default, with a preliminary estimate of Laos’ total public and publicly guaranteed debt reaching 88% of GDP in 2021, according to a World Bank (WB) report released in April. The debt is worth $14.5 billion, about half of which is Chinese loans to finance projects including the China-Laos railway.

News (5)

Kenya's railway project a failure, Kenya hurts from paying CCP debts

Opposition to China’s BRI is not limited to the Indian subcontinent. The $4.7 billion railway project in Kenya, Africa, which is 90% funded by a loan from the Export-Import Bank of China, has proven to be a colossal failure.

Kenyan Vice President William Ruto admitted in an interview this year that its total public debt stood at $73.5 billion as of March, while the country's gross domestic product was just over $100 billion, creating a "very bad" situation. unstable” situation.

"We're hurting from paying the Chinese debt," Ruto said.

A year after the trains started operating, a parliamentary report revealed that the cost of transporting goods on trains was more than double that on roads. To make railroads profitable, authorities forced importers to ship goods by rail instead of road. One report conservatively estimated that more than 8,100 people lost their jobs.

Lawmakers have suggested the government renegotiate railway loans with China, but Eric Olander, co-founder of China's Global South Project, said high-risk mega-projects such as Kenya's railway were unlikely to receive funding in the future.