Why Chief of Defense Staff Bipin Rawat warns Nepal about China’s footprints – India News

Chief of Defence Staff General Bipin Rawat advised Nepal against signing off on loans from other countries in the region

In a statement aimed at China, Chief of Defense Staff General Bipin Rawat this week advised Nepal to sign loans from other countries in the region and urged Kathmandu to learn from Sri Lanka’s experience in the region. There were agreements with other countries. , A reference to Chinese financial institutions that have quietly used billions of dollars in debt to develop developed countries to gain strategic leverage.

In his keynote address at an event online hosted by Nepal’s Think Tank, General Rawat, while outlining the deep and wide-ranging ties between New Delhi and Kathmandu, said that Nepal was committed to other countries, including China, based on its independent foreign policy. Is opening.

“Nepal is free to act independently in international affairs but it must be vigilant and learn from Sri Lanka and other countries that have entered into agreements with other countries in the region,” the top Indian military official said. ”

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Sri Lanka is an example of this. It had to hand over the port of Hambantota to China on a 99-year lease in 2017 after struggling to pay off debts incurred by Chinese companies on its construction. China’s 3 3.3 billion arrears are only part of Sri Lanka’s financial woes, exacerbated by governments borrowing from international markets.

Lanka, however, is not alone. China has lent at least 31 billion to five South Asian countries, a senior government official said; Pakistan, Maldives, Bangladesh, Sri Lanka and Nepal.

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“These are the figures given but the actual figure may be even higher,” the official said.

No one really knows the actual figures because Chinese lenders are reluctant to tell governments the numbers. Zambia, the first African country to default on its debts since the epidemic, said: According to a report in the Guardian, Property and fund managers wanted transparency on its nearly 3 3 billion debt to Chinese lenders who barred them from providing details until the recipients of the information signed a confidentiality packet. Do.

Zambia has been focusing on debt reduction for months. It is now the first African country to accept public payments since the epidemic began.

A study published in Harvard Business Review In February this year, it was estimated that about 50 per cent of loans taken by Chinese institutions were not reported. It concluded that the Chinese state and its subsidiaries have lent about 1.5 1.5 trillion to more than 150 countries around the world.

The study says that this has made China the world’s largest public lender, surpassing the governments of traditional, authorized lenders such as the World Bank, IMF, or all OECD creditors.

Include portfolio loans and business credit for purchasing goods and services, and the total claims of the rest of China’s governments are over 5 5 trillion. This means that by 2017, the world’s debt to China is more than 6%.

In South Asia, however, it is not Sri Lanka but Pakistan and Bangladesh that have borrowed the most from China.

Bangladesh owes China 7 7.4 billion and has sought 18 18 billion in concessional and preferential loans to implement mega projects. China pledged 24 24 billion in loans a few years ago, but only 1 981 billion has been disbursed by July 2019, according to the Diplomat website.

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It is estimated that Pakistan has already borrowed 22 22 billion for its mega projects, including the China-Pakistan Economic Corridor, which was questioned by Prime Minister Imran Khan before he came to power. This week, Islamabad has paid another 1 1 billion to repay the second installment of its 3 3 billion soft loan. Next month, it expects the third installment to return to Riyadh.

At present, the State Bank of Pakistan is facing concerns over Chinese debt, insisting that the loan for CPEC is only Rs. billion billion, which is only .3..3 percent of Pakistan’s total foreign debt 110 110 billion.

It is the Maldives that is concerned that the previous Abdullah Yameen regime may have dragged the Indian Ocean island chain into a debt trap. Former President Mohammad Nasheed, who is now the Speaker of Parliament, has announced that the Chinese debt bill was around ਆਸ 3.1 billion, including government debt, money given to state-owned enterprises and private sector loans guaranteed by the Maldivian government. Were included.

Analysts say the Maldives could struggle to repay Chinese debt by 2022-23, while the 4.9 billion economy is struggling with declining tourism revenues.

About the author: Muhammad Wayne

Wayne is a reporter who covers everything from oil trading to China's biggest conglomerates and technology companies. Originally from Chicago, he is a graduate of New York University's business and economic reporting program.

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