Sri Lanka's Debt Default Process Reportedly Begins

Image copyright: AP Images [via Independent]

The Facts

  • Sri Lanka's debt default process has begun, according to credit ranking agencies, after the country announced on Tues. that it planned to suspend foreign debt payments.

  • This comes as the South Asian island nation is suffering from its worst economic crisis since its independence in 1948.

The Spin

Anti-China narrative

Sri Lanka's crisis is a product of Chinese foreign policy, specifically its practice of "debt-trap diplomacy." China offers to build sparkling new infrastructure based on unsustainable amounts of debt, then host countries default and China gets a new link in its "Belt and Road Initiative."

Pro-China narrative

India is responsible for the "debt trap" allegations. It is an effort to interfere with China's friendly and productive economic ties with its neighbors. India should commit to joining in with regional economic cooperation efforts instead of hampering them.

Narrative C

The Rajapaksa's reign in Sri Lanka has been marked by nepotism and persistent allegations of corruption on top of atrocities committed against civilians during the civil war. The clan has invited outsized and opaque Chinese investments so that they themselves could personally profit at the expense of the nation. Sri Lankans are justifiably angry and have the right to protest peacefully.

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