A lesson for Djibouti and Africa: How China snatched Sri Lanka’s port Updated for 2021

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Updated: March 1, 2021


African countries have left their doors wide open to China, but many economists and experts around the world are warning that China’s tainted history of exploitation and ambitious imperialist expansion may leave the continent poorer, heavily indebted and re-colonized.

A recent case in Sri Lanka has left many African countries rethinking the way they do business with China, from the horn of Africa in Djibouti to the central African countries of Cameroon and Gabon.

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In Sri Lanka, it was a gradual process that ended with a take over of the port. In Djibouti, that process seems to be ongoing

China began giving loans to Sri Lanka’s president, Mahinda Rajapaksa, every time he requested for them, for his ambitious port project.

The money kept pouring in from China, even though feasibility studies said the port wouldn’t work and other frequent lenders like India had refused, especially because Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa.

The Hambantota Port Development Project by China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, kept failing. But the Chinese kept funding it.

In 2012, as reported by The New York Times, the port drew only 34 ships, even though tens of thousands of ships pass by because it is located along one of the world’s busiest shipping lanes.

With Sri Lanka unable to pay its heavy debts, the port became China’s.

Although Mr. Rajapaksa was voted out of office in 2015, Sri Lanka’s new government struggled to make payments on the debt he had taken on. But with the country already heavily indebted, and under intense pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.

As reported by The New York Times, “the transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway”.

The Times described the case as “one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world — and of its willingness to play hardball to collect”.

“The debt deal also intensified some of the harshest accusations about President Xi Jinping’s signature Belt and Road Initiative: that the global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies,” The Times added.

As Josh Rogin of The Washington Post wrote on September 27, the Horn of Africa has become a strategic linchpin for the United States, but China has escalated its involvement there, presenting a daunting challenge for U.S. policymakers.

China opened its first military base in Djibouti last year, even though the United States, Japan, France and Italy all have bases in the area. The United States and its allies had hoped that China would adopt a cooperation approach. But a year after, the military base in Djibouti is only one part of steady encroachment into Djibouti that now threatens the diplomatic and national security interests of the U.S. and its allies.

But China did not stop at the military base. Early this year, the Djiboutian government which remains heavily indebted to China, seized control of Doraleh Container Terminal from Dubai-based DP World.

The President of Djibouti Ismail Omar Gulleh invoked emergency measures to ignore legal rulings in the United Kingdom meant to stop his illegal seizure of the port.

Since then, China has continued to connive with Djibouti, to illegally dispossess DP World of its contract and to take over other possessions, making it clear that Chinese economic interests are clear.

Josh Rogin believes Djibouti stands to be a key node in China “string of pearls” strategy, which links key ports to their “One Belt, One Road” initiative.

If the case in Sri Lanka is anything to point to, the government of Djibouti may be handing over the country in the Horn of Africa to China.

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Simon Ateba
Simon Ateba
Simon Ateba covers the White House, the U.S. government, the International Monetary Fund, the World Bank and other financial and international institutions for Today News Africa in Washington D.C. Simon can be reached on simonateba@todaynewsafrica.com

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