China has reportedly announced that it was providing USD 90 million grant to Sri Lanka in a bid to advance rural development projects in the nation. This news comes two days after President Gotabaya Rajapaksa requested a visiting Chinese delegation to support him in disproving the perception that China-backed mega projects were ‘debt traps’.

On October 9, the Island’s President said that he wanted to disprove the notion that China was funding developmental projects in Sri Lanka to gain influence in local affairs. During the talks with Yang Jiechi, the former foreign minister who was leading the visit, President Rajapaksa requested China to clear misbeliefs about China-funded project in the nation.

Calling the funding as a ‘timely grant’, the Chinese Embassy in Colombo stated that the funding would be used for education, medical care, and water supplies in the nation’s rural areas and that it would  ‘contribute to the well-being of the nation’ in the post-pandemic era.

Apparently, China considers the island to be a crucial link in its huge ‘Belt and Road’ international infrastructure-building initiative and has offered billions of dollars in debts for the nation’s projects over the past decade. These projects include airport, seaport, port city, power stations, and highways.

In 2017, the Indian Ocean island nation leased out a Chinese-funded port situated near busy shipping routes to a Chinese firm for 99 years to recover from the burden of repaying the loan to China. The facility is part of China’s plan for a line of ports extending from Chinese waters to the Persian Gulf. The communist nation has also decided to offer a USD 989 million loans to Sri Lanka to develop an expressway, which will connect the nation’s tea-growing central region and the Chinese-run seaport.

Critics have voiced out their worries regarding such hefty Chinese-funded developments alleging that they weren’t ‘financially viable’ adding that Sri Lanka may face complications in repaying the loans.

Source Credit - https://www.arabnews.com/node/1747476/business-economy