If one were to look at two events in South Asia – the economic crisis in Sri Lanka, and the downfall of the Imran Khan led Pakistan Tehreek-E-Insaaf (PTI) government in Pakistan, one of the points which clearly emerges is that while like other developing countries — both the South Asian nations — may have moved closer to China, there are pitfalls to being excessively dependent upon Beijing. Both countries, like many other nations, have often been accused of becoming excessively reliant upon China and falling into what has been dubbed as a ‘debt trap’ which leads not only to rising economic dependency — as a result of piling debts — but also Beijing dictating political choices.
External debts of Pakistan and Sri Lanka
The International Monetary Fund (IMF) according to estimates, in February 2022, had said that Pakistan owed $ 18.4 billion or 1/5th of its external debt to China, while Sri Lanka’s total debt to China is estimated at $ 8 billion, its total external debt is $ 45 billion. In the case of Pakistan, a lot of attention has been focused on Imran Khan’s independence stance on the Ukraine issue, and a possible external hand in his ouster, the Pakistan Democratic Movement (PDM) coalition, led by PML-N Supremo Shahbaz Sharif, which is now in power has repeatedly pointed to Khan’s mismanagement of the economy, and the growing disillusionment of the public as well as erstwhile allies (one of the final blows to Khan’s hopes of staying in power was when the Muttahida Qaumi...
Read Full Story: https://moderndiplomacy.eu/2022/04/17/pakistan-sri-lanka-lessons-learned/
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