Sri Lanka, Pakistan, Maldives stand neck-deep in Chinese debt: Forbes


Colombo: Sri Lanka, Pakistan and Maldives are among the biggest debtors of China. Pakistan owes USD 77.3 billion of external debt to China, according to Forbes.

Maldives’ debt to 31 per cent of its Gross National Income (GNI). Maldives’ total debt amounts to MVR 86 billion by the end of 2020, MVR 44 billion of which is external debt, reported The Island Online.

Forbes, collecting data from The World Bank report as of 2020, said that 97 countries across the globe are under Chinese debt. Countries heavily in debt to China are mostly located in Africa, but can also be found in Central Asia, Southeast Asia and the Pacific.

China is reaching most of the countries under the One Belt and Road scheme. The world’s low-income countries owe 37 per cent of their debt to China in 2022, compared to just 24 per cent in bilateral debts to the rest of the world.

The Chinese global project to finance the construction of the port, rail and land infrastructure across the globe, had been a significant source of debt to China for participating countries, reported The Island Online.

Those with the highest external debt to China are Pakistan USD 77.3 billion, Angola at 36.3 billion, Ethiopia at USD 7.9 billion, Kenya at USD 7.4 billion and Sri Lanka at USD 6.8 billion.

Maldives newspaper reported that according to statistics released by the Finance Ministry, Maldives’ debt rose to MVR 99 billion by the end of Q1 2022. It made up 113 per cent of GDP.

The countries with the biggest debt burdens in relative terms were Djibouti and Angola, where debt to China exceeded 40 per cent of gross national income, an indicator similar to GDP but also including income from overseas sources.

The equivalent of 30 per cent of GNI or more in Chinese debt affects the Maldives and Laos, with the latter just having opened a railway line to China which is already causing debt issues for the country.

Sri Lanka in May 2022 was the first country in two decades to default on its sovereign debt. Chinese debt to Sri Lanka was the fifth-highest overall in late 2020 and amounted to 9 per cent of the country’s GNI, reported The Island Online.

China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. China rejects this criticism and calls it as “propaganda/narrative of the vested interested countries” to tarnish its image. ___The Print