China, one of the top three richest countries in the world, is doling out trillions in loans in an effort to build its global infrastructure agenda. They call it their Belt and Road Initiative.
It’s dangerous as we’ve reported.
At least $385 billion is owed by 165 countries to China for #BeltAndRoad projects, with 42 low-to-middle income countries owning more than ten percent of their GDP, including Laos, the Maldives, Brunei, Cambodia, and Myanmar.
In this very big story, The Guardian reports China is owed $385bn, including ‘hidden debt’ from 42 poorer nations.
AidData researchers found 42 low-to-middle income countries with ‘belt and road’ exposure exceeding 10% of GDP.
China’s loans for “Belt and Road Initiative” (BRI) projects were systematically underreported to international bodies such as the World Bank.
CCP TAKES UGANDA’S ONLY AIRPORT
Uganda just found out the hard way.
The Entebbe International Airport was handed over to China for failing to repay a US$207M debt.
Several other countries have found themselves in a position of handing over state assets and in some cases sovereign land.
Uganda cannot pay its debt to China. It contracted back in November 2015. The loan had a maturity period of 20 years. It included a seven-year grace period.
According to International reports now surfacing, the country has signed an agreement to virtually surrender the new airport to the Chinese lenders.
That airport serves as the country’s only international airport for a nation with a population of some 46 million people and a US$37.4B economy.
According to the Uganda Civil Aviation Authority (UCAA), some provisions in the Financing Agreement with China expose Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.
China has rejected their pleas to renegotiate.
Uganda’s only international airport handles over 1.9 million passengers per year. China won’t renegotiate the contract despite pleas.
Developing countries from Pakistan to Djibouti, the Maldives to Fiji, all owe huge amounts to China. Already there are examples of defaulters being pressured into surrendering control of assets or allowing military bases on their land. Vice President Jagdeo recently confirmed that his government is exploring accessing a US$1.5B access to credit from China.
Sri had to formally hand over the strategic port of Hambantota to China on a 99-year lease, in 2019. It’s a deal that government critics have said threatens the country’s sovereignty.
The state-controlled China Merchants Port Holdings Company signed a deal with the Sri Lanka Ports Authority to control a 70 percent stake in the Hambantota port. The port lies on the southern coast of the country.
Sri Lankan politicians said the Hambantota deal is valued at US$1.1 billion. They said it was necessary to chip away at the debt. They did it despite analysts warning of the consequences of signing away too much control to the CCP.
“The price being paid for reducing the China debt could prove more costly than the debt burden Sri Lanka seeks to reduce,” said N. Sathiya Moorthy, a senior fellow specializing in Sri Lanka at the New Delhi-based Observer Research Foundation.