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In other places I've done my best to follow the Sri Lankan economic crisis, particularly since it could be more geopolitically relevant than people realize as it simultaneously flushes out the roles of regional powers like China and India.
... and here we are with China taking the lead on restructuring the absolutely massive Sri Lankan debt:
The IMF bailout process made slow progress due to the need to restructure Sri Lanka’s nearly 50 billion dollar external debt.A previous Chinese letter giving a two-year moratorium on debt repayment had been deemed inadequate by the IMF. Wickremesinghe said the IMF programme which will be there for over the next four years would be different from all of the previous 16 programmes with the Washington-based global lender. He said the government has to take many hard economic decisions in order to stabilise the economy and work towards growth. The government measures to order tax hikes, raise utility tariffs and end fuel subsidies had triggered political protests. “I would like to apologise to the people for the hardships”, he said. The IMF in September last year approved Sri Lanka a 2.9 billion dollar bailout package over 4 years pending Sri Lanka's ability to restructure its debt with creditors -- both bilateral and sovereign bondholders.
China owns about 20% of the Sri Lankan debt, so them having a big stay in how it is restructured makes sense.
China will be able to have Sri Lanka by the horns for the indefinite future, and maybe it is even the case that the Sri Lankans will get loans next time from the Chinese (and it'll be in Yuan!).
This is how you grow an empire.
India missed out on an opportunity to exercise more control over a nation traditionally in her sphere of influence - why they did that, I do not know.
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