Today we are talking about One Belt One Road: China exporting debt through ‘Silk Road’ projects, IMF chief warns, check out the One Belt One Road: China exporting debt through ‘Silk Road’ projects, IMF chief warns with complete details and accuracy At 9wiki.info.
Check down the table for One Belt One Road: China exporting debt through ‘Silk Road’ projects, IMF chief warns By 9wiki – The Encyclopedia We are always providing right details you can comment below if you found any irrelevant content of celeb.
Lagarde made the comments at a Beijing forum on Chinese President Xi Jinping’s signature Belt and Road initiative, a $1 trillion road, rail and construction project spanning dozens of countries — from Asia to Africa and Europe.
But many of the colossal projects are being built by state-owned Chinese companies and financed by loans from China, leaving states billions of dollars in debt to Beijing.
“These ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises, and creating balance of payment challenges,” Lagarde told the crowd of Chinese and foreign officials.
“In countries where public debt is already high, careful management of financing terms is critical,” she said.
ROADBLOCKS FOR ‘SILK ROUTE’ IN PAKISTAN AND OTHER COUNTRIES
China’s plan for a modern Silk Road of railways, ports and other facilities linking Asia with Europe hit a $14 billion pothole in Pakistan when plans for the Diamer-Bhasha Dam were thrown into turmoil in November last year, when the chairman of Pakistan’s water authority said Beijing wanted an ownership stake in the hydropower project. He rejected that as against Pakistani interests.
From Pakistan to Tanzania to Hungary, projects under President Xi Jinping’s signature “Belt and Road Initiative” are being canceled, renegotiated or delayed due to disputes about costs or complaints host countries get too little out of projects built by Chinese companies and financed by loans from Beijing that must be repaid.
In some areas, Beijing is suffering a political backlash due to fears of domination by Asia’s biggest economy.
“Pakistan is one of the countries that is in China’s hip pocket, and for Pakistan to stand up and say, ‘I’m not going to do this with you,’ shows it’s not as ‘win-win’ as China says it is,” said Robert Koepp, an analyst in Hong Kong for the Economist Corporate Network, a research firm.
Some countries like Sri Lanka have already ended up deeply in debt and been left with little choice but to turn over crucial assets to Beijing as way to restructure the loans.
In Sri Lanka’s case, the island nation handed over a long term lease on the strategically located and bustling Hambantota Port to pay down debt.
On Thursday, Lagarde advocated greater transparency and cooperation to get all stakeholders on the same page to avoid such problems.
“It’s not a free lunch, it’s something where everybody chips in, it’s not just honey for bees,” she said, warning that the large scale spending projects also come with corruption temptations for officials.
“Projects can always present the risk of potentially failed projects and the misuse of funds. In some corners, it’s even called corruption,” Lagarde told the officials, many of whom preside over Belt and Road projects.
The speech may ruffle feathers in Beijing where leaders have heaped praise on the project and been loathe to acknowledge any risks or pitfalls in the initiative, which is often described as a revival of the ancient Silk Road trade routes.
Speaking before Lagarde, China’s central bank chief Yi Gang said Chinese banks had “achieved great successes” providing low cost financing to Belt and Road countries.
Yi said the banks do not rely on government subsidies but at the same time are “not purely commercial lending”.
Xi struck back at criticism of his key initiative on Wednesday at the Boao Forum for Asia, a Davos-like meeting of international leaders held on the southern island of Hainan.
The Belt and Road “is neither the Marshall Plan after World War II nor an intrigue of China. It is, if anything, a plan in the sunshine,” Xi said, according to the Xinhua state news agency.