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China sinks pump into Sri Lankan economy

COLOMBO (UCAN): After the United States of America suspended military aid to Sri Lanka in its long-running war against Tamil separatists in 2007, China began funnelling funds into the island nation and by 2016 Beijing had become Sri Lanka’s biggest foreign investor.

It started with military aid and soon grew into several large projects that will see Chinese companies pour investment into the nation. But the projects have angered locals, who are suffering collateral damage in the upheaval.

Plans to turn Hambantota Harbour into an industrial port erupted into protests, when villagers found out they would be forced to relocate. They said it would turn their home into a Chinese colony.

On January 7, hundreds of people, including the secretary of the National Bikkhu Front, the Venerable Vanamulle Vijitha Thero, and opposition political parties clashed with police.

About 250 kilometres away in Colombo, the US$1.4 billion ($806 billion) International Financial City is being built on manmade islands fashioned from sand dredged from the local ocean floor, scattering fish schools and ruining livelihoods.

Father Michael Rajendram, the former Caritas SED-Galle director and one of the few Church officials who would go on record, said the government needs to inform people properly.

“If there was more awareness programmes for investors and locals, then everybody would understand the advantages and disadvantages of all these massive projects,” Father Rajendram said.

“There has been no education or information,” he added.

Venerable Thero said the government cannot take more land away from the people.

“China has requested 15,000 acres from Hambantota district for a proposed industrial zone and all the land is owned by farmers,” he pointed out.

China is not engaged in developing Sri Lanka or its  economy, but is building an infrastructure to turn large areas into Chinese colonies by sucking the money back into its own pockets.

“Politicians build these unwanted projects for their own benefit. They all are white elephant projects using high-interest loans putting us more and more in debt,” the Buddhist monk explained.

The involvement of China does have a cost for Sri Lanka. Almost all the money China has poured into the island nation has been in the form of loans at commercial interest rates.

Furthermore, labourers and subcontractors working on the projects are all Chinese using Chinese materials.

“All equipment is supplied by Chinese contractors and material, technology and labour also comes from China,” another member of the National Bhikkhu Front, who did not want to be named, noted.

Venerable Thero explained that Sri Lanka will be making loan repayments on current projects for the next 20 years and about a third of government revenue today goes directly to China.

Chandrasiri Mahagamage, the coordinator of the Trade Union Front to Protect Hambantota Harbour, said that Sri Lanka is a valuable hub in China’s One Belt, One Road project to forge new land and sea routes for its exports.

“China is very interested in developing ports in Sri Lanka, as it secures trade routes to the Middle East and Europe,” Mahagamage explained.

The All Ceylon General Port Employees Union and the Trade Union Front to Protect Hambantota Harbour held protests throughout January and February saying they are furious that not only will the plan proceed, but Sri Lanka will have to hand over 80 per cent of its stakes in the harbour to a Chinese firm.

The current government of Maithripala Sirisena opposed many of the larger Chinese investments procured by its pro-China predecessor, Mahinda Rajapaksa, including Hambantota, but their hands are tied. They have to go ahead in order to pay back decades of loans.

“The oil refineries, export-import and ship maintenance will be built within the port premises, but none of the workers will be Sri Lankan,” Mahagamage fumed.

Around 80,000 jobs were promised to locals at the start of the Colombo International Financial City project, one of the largest China-backed initiatives but, even though it started in 2016, the jobs have still to materialise.

The Colombo International Financial City aims to turn Sri Lanka into Asia’s next top financial hub. It was first mooted by the former president, Mahinda, when  he entered into an agreement with China Communication Construction Co. Ltd. to begin construction.

Massive protests highlighting issues faced by fishing communities, as well as the adverse impact on fish breeding areas, damage to coral reefs and coastal erosion halted the project for a time. But slowly the behemoth roared into life anyway.

Incredibly, Mahagamage has not given up hope the people can stop a similar disaster befalling Hambantota. “We would like to tell the president when the government takes its final decision from that day onwards port employees and all the trade unions will start an island-wide protest until the government gives up,” he said.

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