‘Chinese debt-trap’ created by present Govt., says Godahewa

The term ‘Chinese debt-trap,’ which has been picked up by world leaders including US Vice President Mike Spence, is a creation of the present government, Dr. Nalaka Godahewa said recently.

Speaking at a news briefing of the Patriotic Professionals’ Forum, he said when national leaders were spreading falsehood to gain cheap political mileage, the world believed in such information.

“A case in point is the recent remark made by US Vice President Spence that Sri Lanka had to forego its Hambantota Port project due to a Chinese debt trap. In 2014, the total Chinese debt to Sri Lanka stood at USD 4.5 billion which was less than 8% of the total national debt. If 8% is the debt trap, then what about the balance 92%? The government has caused humiliation to the country in many ways due to its financial mismanagement. The Bloomberg has now rated Sri Lanka as one of the most dangerous countries for investment. It has categorised Sri Lanka under the ‘Red Zone.’ Earlier in January, the Moody’s ranked Sri Lanka 24th in Asia in terms of its ability to settle debt. Many ranking organisations have downgraded Sri Lanka after the current government came to power. Sri Lanka has slipped from the 48th position to the 68th in ‘rule of law index’ and dropped from the 90th position to the 112th in the ‘economic freedom index,’” he said.

He also said the Colombo stock market was giving 25.3% annual returns to its investors and was rated the most sustainable stock market in Asia in 2014.

“Since then, the CSE is on a continuous decline. The ASPI has crashed from 7,299 points in December 2014 to 5,888 points as at end September 2018. Market capitalisation has dropped by Rs.530 billion. The daily market turnover is half of what it used to be and investors are continuously losing money,” he said.

On a different note, he said there was an attempt by some politicians to create an impression that the economic policies of US President Donald trump were adversely impacting the global economy.

“This is incorrect. It is not only the American economy that is growing. Even the rest of the world is progressing. Europe had a growth rate of about 1.8% in 2016 and in 2017 it went up to 2.5%. China grew at a rate of 6.7-6.8% during 2016-2017. Japan’s economy is also on a healthy footing. Hence, it is evident that the global economic crisis is only imaginary. Therefore, the government can only blame itself for the economic situation in the country,” he said.

Former Central Bank Governor Ajith Nivard Cabraal also spoke at the news briefing.