Jaishankar draws hardline on Chinese debt trap policy in Dhaka meet

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By Our Special Correspondent

New Delhi, May 12: In a veiled message against the Chinese debt trap policy, Union Minister for External Affairs S Jaishankar cautioned the member nations of the Indian Ocean Conference against “unsustainable debt generated by unviable projects”. He warned that opaque lending practices may “bite us back”.

Jaishankar’s remarks came at the sixth meeting of the Indian Ocean Conference amid the Bay of Bengal nations in attendance along with India’s close and extended neighbours. Indian Ocean Region nations after the outbreak of the Covid-19 pandemic came under severe economic distress after remittances dried up and exports were disrupted.

Sri Lanka was the first to go off the block to default on servicing its over $52 billion foreign debt, which was largely on account of Chinese loan of projects such as Hambantota Port which were not immediately required by the island nation but served the strategic interests of Beijing to ring-fence India, from east Asia to Africa.    

“Encouraging opaque lending practices, exorbitant ventures and price points that are unrelated to the market, these are bound to bite us back. This is time to reflect and reform, not one to repeat and reiterate,” underlined Jaishankar in his address to the key meeting.

Besides Sri Lanka, Bangladesh and Nepal have also faced economic hardships in the wake of the covid-19 pandemic along with a Chinese push of its debt trap policy. India during its G20 presidency has been raising the issue of the debt of the smaller nations.

Bangladesh by unveiling its Indo Pacific paper has sought to distance from China amid the fast changing geostrategic equations in the immediate neighbourhood of Dhaka. Bangladesh is already reeling on account of excessive Rohingya refugees pushed out of Myanmar by China supported military Junta regime.

“Many nations of the Indian Ocean still address developmental challenges that may no longer be relevant in the Pacific. There are distinct issues that arise from regional identities, colonial experiences and geo-political relationships,” added Jaishankar.

As China seeks dominance over the maritime routes, India along with the Quad members has been calling for free access to the international waters and rules-based order. “Nations of the Indian Ocean are united in their maritime interest. We should ensure that global good should not be sacrificed at the altar of national dominance. Exchanging information on white shipping, cooperating on coastal surveillance or collaborating on maritime domain awareness are practical actions to back up diplomacy,” added Jaishankar.

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