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Message: <blockquote data-quote="Mrdwxll0" data-source="post: 23956899" data-attributes="member: 569380">Originally Posted by Rappler.comAccording to the <a href="https://www.rappler.com/thought-leaders/207900-lessons-manila-sri-lanka-debt-trap" target="_blank">Rappler.com</a>, the Sri Lankan experience What lessons can the Philippines learn from other countries' experiences? Under what conditions will a government be more or less vulnerable to Chinese "debt traps"? To answer these questions, we consider the case of Sri Lanka as an illustrative example of the process whereby Chinese debt can translate into strategic concessions. The basic lesson from Sri Lanka is simple. Needing to kick-start its economy following a long civil war, the then government of President Mahinda Rajapaksa eagerly accepted Chinese financing for a number of infrastructure projects. Between 2005 and 2017, Chinese investment in the country <a href="https://www.straitstimes.com/asia/south-asia/chinas-lucrative-embrace-of-sri-lanka-stirs-unease-0" target="_blank">totaled close to $15 billion</a>. The central problem was that a number of the projects – most famously a port and airport in Rajapaksa's home district of Hambantota – <a href="https://www.forbes.com/sites/wadeshepard/2016/10/28/sold-sri-lankas-hambantota-port-and-the-worlds-emptiest-airport-go-to-the-chinese/#ace3ec444562" target="_blank">failed to generate sufficient revenues</a> to cover debt repayments. The long-term nature of infrastructure projects makes them especially tricky investments to price and plan, and the subsequent lack of commercial viability raised many questions regarding a lack of transparency in the decision-making process and the possibility that decisions to "<a href="https://www.washingtonpost.com/world/asia_pacific/can-sri-lankas-new-government-break-free-from-china/2015/08/15/d7bd9974-4044-11e5-b2c4-af4c6183b8b4_story.html?utm_term=.a2d290b5408f" target="_blank">build bridges where there were not rivers</a>" were made instead for personal or political reasons. Rajapaksa lost a surprise election in early 2015, in part because of <a href="https://www.ft.com/content/f33d8084-95a8-11e4-a390-00144feabdc0" target="_blank">corruption allegations</a>. The new government commenced promising to reverse and renegotiate some of its predecessor’s worst decisions but, facing a deteriorating macroeconomic situation and <a href="https://asia.nikkei.com/Politics/Sri-Lanka-s-embrace-of-China-investment-heightens-regional-geopolitical-risk" target="_blank">dearth of alternative financing sources</a>, ultimately had little choice but to <a href="https://thediplomat.com/2018/01/does-debt-pay-china-and-the-politics-of-investment-in-sri-lanka/" target="_blank">cede control of a strategic asset</a> – the Hambantota Port – in return for debt relief. While the government insists that the port will <a href="https://www.lowyinstitute.org/the-interpreter/hambantota-the-chinese-port" target="_blank">never be used for military purposes</a>, others around the region are not so sure. Meanwhile, India remains actively engaged in its traditional sphere of influence to counter rising Chinese influence, which does suggest some scope exists for smaller states to <a href="https://www.tandfonline.com/doi/abs/10.1080/14799855.2017.1414045" target="_blank">play the two sides off against each other</a>.<a href="https://www.rappler.com/thought-leaders/207900-lessons-manila-sri-lanka-debt-trap" target="_blank">• Rappler.com - [OPINION] Lessons for Manila from Sri Lanka's 'debt-trap' experience</a><a href="https://www.forbes.com/sites/panosmourdoukoutas/2018/11/26/china-cannot-turn-the-philippines-into-another-sri-lanka/#5c0337c56ee9" target="_blank">• Forbes.com - China Cannot Turn The Philippines Into Another Sri Lanka</a><a href="https://www.washingtonpost.com/world/asia_pacific/can-sri-lankas-new-government-break-free-from-china/2015/08/15/d7bd9974-4044-11e5-b2c4-af4c6183b8b4_story.html?noredirect=on&utm_term=.676372970f32" target="_blank">• WashingtonPost.com  - Can Sri Lanka’s new government break free from China?</a><a href="https://www.straitstimes.com/asia/south-asia/chinas-lucrative-embrace-of-sri-lanka-stirs-unease-0" target="_blank">• StraitsTimes.com - China's lucrative embrace of Sri Lanka stirs unease</a><a href="https://www.forbes.com/sites/wadeshepard/2016/10/28/sold-sri-lankas-hambantota-port-and-the-worlds-emptiest-airport-go-to-the-chinese/#90b793144562" target="_blank">• Forbes.com - Sri Lanka's Hambantota Port And The World's Emptiest Airport Go To The Chinese</a><a href="https://asia.nikkei.com/Politics/Sri-Lanka-s-embrace-of-China-investment-heightens-regional-geopolitical-risk" target="_blank">• NIKKEI.com - Sri Lanka's embrace of China investment heightens regional geopolitical risk</a><a href="https://thediplomat.com/2018/01/does-debt-pay-china-and-the-politics-of-investment-in-sri-lanka/" target="_blank">• TheDiplomat.com - Does Debt Pay? China and the Politics of Investment in Sri Lanka</a><a href="https://www.lowyinstitute.org/the-interpreter/hambantota-the-chinese-port" target="_blank">• LowyInstitute.org - Hambantota: “the Chinese port”</a></blockquote>

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