{"id":66691,"date":"2019-12-10T21:07:20","date_gmt":"2019-12-11T02:07:20","guid":{"rendered":"http:\/\/dbsjeyaraj.com\/dbsj\/?p=66691"},"modified":"2019-12-10T21:07:45","modified_gmt":"2019-12-11T02:07:45","slug":"mahinda-rajapaksas-xinhua-interview-and-assertions-by-the-chinese-side-indicate-that-the-re-negotiating-of-hambantota-port-agreement-with-china-as-stated-by-gotabaya-rajapaksa-will-not-happen","status":"publish","type":"post","link":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=66691","title":{"rendered":"Mahinda Rajapaksa’s Xinhua Interview Statement and Assertions by the Chinese side Indicate that the Re-negotiating of Hambantota Port Agreement with China as Stated by Gotabaya Rajapaksa Will Not Happen"},"content":{"rendered":"

By<\/p>\n

P.K.Balachandran<\/strong><\/p>\n

Sri Lankan Prime Minister Mahinda Rajapaksa has put a lid on the controversy over President Gotabaya Rajapaksa\u2019s remark that his Government will re-negotiate the 2017 agreement with China over Hambantota port to gain greater control over it and reduce the lease period, which is now 99 years.<\/p>\n

With the Prime Minister\u2019s statement and formal assertions from the Chinese side, renegotiating the port deal is ruled out.<\/p>\n

Mahinda told the Chinese news agency Xinhua in an exclusive interview on Saturday that President Gotabaya had been \u201cquoted out of context.\u201d Explaining, the Prime Minister said: \u201c The President didn\u2019t mean there is any problem about sovereignty. What he meant was that our Government, unlike the previous one, has a principle of not privatising assets.\u201d <\/p>\n

He does not believe that Sri Lanka\u2019s engagement with the China-initiated Belt and Road Initiative (BRI) amounts to a \u201cdebt-trap\u201d as portrayed by some Western media.<\/p>\n

<\/p>\n

\u201cWe are very confident that Sri Lanka can very clearly repay the loans for the Hambantota Port and other development projects. Today, the economy has collapsed, but when we rebuild it paying back loans won\u2019t be a question,\u201d Mahinda said.<\/p>\n

\u201cIf Sri Lanka and China have any problems, we can easily discuss and resolve them as friends,\u201d he affirmed and added that his Government is looking forward to continuing developing friendly relations with China.<\/p>\n

\u201cThe two countries enjoy a strong, long-standing friendship, which has laid the foundation for practical cooperation,\u201d the Prime Minister added. <\/p>\n

On a visit to the US$ 1.4 billion China-built Colombo Port City to mark the inclusion of 269 hectares of reclaimed land to Colombo District on Saturday, Mahinda said that his Government will \u201cfirmly support and accelerate the development of the Colombo Port City project constructed by China to ensure that it will emerge as a new business hub in the island country.\u201d<\/p>\n

The prime minister pledged to accelerate the implementation of the preferential policies of the Colombo Port City from the Government level as early as January 2020, the Colombo Port City said in a statement following discussions with the Prime Minister.<\/p>\n

The Colombo Port City is Sri Lanka\u2019s largest Foreign Direct Investment project and is expected to attract billions of U.S. dollars of investments in the coming years and generate 80,000 jobs.<\/p>\n

Earlier in November, before going to New Delhi on his first foreign visit as Executive President, Gotabaya Rajapaksa had told the Indian Defence Journal Bharat Shakti: \u201c We should never have given control of the port to China. That was a mistake. Even though China is a good friend of ours and we need their assistance to develop, I\u2019m not afraid to say, that was a mistake. I will request them to renegotiate and come with a better deal to assist us. Today, people are not happy about that deal.\u201d <\/p>\n

However, it soon became apparent, that China did not take kindly to Gotabaya\u2019s assertion. President Xi Jingping\u2019s congratulatory message to the newly elected President was rather matter of fact, clearly stating the bases on which Sino-Lankan relations rest, and should rest. The reference to \u201ctrust\u201d, \u201cdocking development visions\u201d and \u201cbeing part of the Belt and Road Initiative,\u201d in his message had deep meaning. <\/p>\n


\nBeijing acted quickly<\/strong><\/p>\n

As the international media went to town over Gotabaya\u2019s renegotiating the Hambantota port deal, Beijing acted quickly to douse the fires and firm up its relations with Colombo. It sent former Ambassador to Sri Lanka, Wu Jianghao, as the representative of the Chinese State Councillor and Foreign Minister Wang Yi, to thrash out matters with the Sri Lankan leaders.<\/p>\n

At the end of the two-day visit, the Chinese embassy released a statement saying that China and Sri Lanka have agreed to speed up the implementation of cooperation on big economic projects, including the Hambantota Port \u201cunder the existing consensus,\u201d thereby ruling out renegotiations. <\/p>\n

The statement further said that on the basis of the \u201cexisting consensus\u201d, the two countries will \u201cdraw up and promote a new blueprint for future cooperation.\u201d This was in line with an earlier statement by a Chinese embassy spokesman that the existing agreements were drawn up on an \u201cequal-footed basis\u201d for a \u201cwin win\u201d outcome. <\/p>\n

It is not as if China does not negotiate or has not renegotiated projects. It has done so in many parts of the world, including Sri Lanka. The US$ 1.4 billion Colombo Port City project was stopped in 2015 by the Sirisena-<\/p>\n

Wickremesinghe Government on various grounds. But it was allowed to resume in 2016 after changing parts of the agreement by mutual consent. <\/p>\n

The Government\u2019s opposition was to the fact that 20 hectares Sri Lanka\u2019s land was going to be owned in full by China. Even India had raised objections to China owning land in Sri Lanka on a freehold basis. The Government renegotiated with the China Harbour Engineering Corporation Port City Ltd., and gave the 20 hectares on a 99-year extendable lease. The Government had decided that no lands would be granted on a freehold basis to any foreign entity. <\/p>\n

Because the Chinese company had agreed to drop its US$ 125 million compensation claim for the duration of the project\u2019s suspension, the government awarded a further two hectares which it could hold on a 99-year lease.<\/p>\n

The Rhodium Group, which studied 40 Chinese debt negotiations in 24 countries involving debts totalling US$ 50 billion, found that there were cases of deferment, forgiveness, and refinancing. According to \u201cForbes\u201d, China has forgiven loans to the tune of US$ 10 billion.<\/p>\n

But Sri Lanka cannot be equated with other countries easily. The stakes here are high for both China and Sri Lanka, which make renegotiation a tough prospect. While the Hambantota Port is of great economic and strategic value for China, which makes renegotiation tricky, China\u2019s economic involvement in Sri Lanka is too significant for the island nation to be tough on China. <\/p>\n

China has pumped in much money in Sri Lanka in the vital infrastructure sector. And in contrast to the popular impression, Chinese loans comprise only about 10% of Sri Lanka\u2019s total foreign debt of US$ 15.3 billion, points out Dr.Dushni Weerakoon, Executive Director of the Colombo-based Institute of Policy Studies. She says that out of the Chinese loans, over 60% was lent on concessional terms that were not really excessive. Typically, they are at fixed rates of 2%, with other fees of 0.5 % and with average maturity of 15\u201320 years. <\/p>\n

\u201cThe remaining 40% of non-concessionary Chinese loans accounted for only 20% of Sri Lanka\u2019s total debt from such borrowings. The rest (80%) was borrowed from international capital markets in the form of sovereign bonds, term financing facilities and foreign holdings of gilt-edged securities,\u201d Dr.Weerakoon adds. <\/p>\n

It is a myth that the Hambantota port was ceded to China because Sri Lanka faced problems paying back Chinese loans, she asserts. The debt is due to borrowing from other sources. <\/p>\n

\u201cFrom an initial US$500 million international sovereign bond (ISB) issue in 2007, Sri Lanka went on to amass US$ 15.3 billion in debt from subsequent ISB issues and foreign currency term financing facilities from 2007\u201318. Sri Lanka\u2019s debt problem was (and is) really about avoiding default and meeting its obligations to international investors and commercial lenders from this growing and costly form of foreign borrowing.<\/p>\n

\u201cThese high interest borrowings now exceed a third of Sri Lanka\u2019s total debt. As a result, Sri Lanka faces a record foreign debt repayment of nearly US$ 6 billion in 2019 \u2014 of which US$2.6 billion had to be paid in the first quarter of 2019 alone. With low reserves and tightening market conditions, finding ways to meet these repayment obligations was an effort. Leasing the Hambantota port was part of a strategy to find cash and stave off pressures on the available fund of reserves,\u201d Dr.Weerakoon explains. <\/p>\n

Shorn of Western-inspired propaganda, Sri Lanka\u2019s economic relations with China have benefitted the island which makes it imperative for its leaders to be wary about making radical changes.<\/p>\n

Courtesy:Daily Mirror<\/em><\/p>\n

Tweet<\/a><\/div>","protected":false},"excerpt":{"rendered":"

By P.K.Balachandran Sri Lankan Prime Minister Mahinda Rajapaksa has put a lid on the controversy over President Gotabaya Rajapaksa\u2019s remark that his Government will re-negotiate the 2017 agreement with China over Hambantota port to gain greater control over it and reduce the lease period, which is now 99 years. With the Prime Minister\u2019s statement and …<\/p>\n

Continue reading ‘Mahinda Rajapaksa’s Xinhua Interview Statement and Assertions by the Chinese side Indicate that the Re-negotiating of Hambantota Port Agreement with China as Stated by Gotabaya Rajapaksa Will Not Happen’ »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/66691"}],"collection":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=66691"}],"version-history":[{"count":2,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/66691\/revisions"}],"predecessor-version":[{"id":66693,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/66691\/revisions\/66693"}],"wp:attachment":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=66691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=66691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=66691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}