China-aided Housing Project in Sri Lanka causes uneasiness among citizens

Analysis in Colombo expresses worry at increasing control of Beijing

By Ashis Biswas

Even as Sri Lanka’s fragile economic recovery faces unexpected pressures owing to the continuing Iran/US-Israel conflict, a new and apparently helpful Chinese-aided low cost housing project that could have acted as a silver lining, has not brought much cheer among its hard pressed citizens. Sri Lankan media reports suggest that as before, many citizens feel concerned over what they feel to be the island’s growing economic dependence on China.

As local analysts see it, part of the problem happens to be China’s stubborn refusal to alter the basic format of projects it helps finance in smaller countries — never mind the critical media coverage among the host countries, or negative reactions among sections of common people. From Myanmar to Bangladesh, from Pakistan to Sri Lanka, recipient countries have all complained of the near total control China exercises over each stage of the projects it finances /executes abroad.

This is not to suggest that the anti-Chinese media rants have actually led to a break in financial ties linking Beijing authorities and other countries. The need for foreign investments and technological assistance is always urgent in smaller developing countries. The worst case scenario for China has mostly involved its withdrawal from an individual project that hardly constituted a long term setback to financial ties as a whole. .

Further, it is no secret, despite strong denials from Beijing, that the aid recipient countries have little or nominal control over the pace or tempo of ongoing operations in major projects, whether in the infrastructure, power production or other sectors. Yet, unrelated political factors elsewhere may affect the flow of finances, or the delivery of critical Chinese equipment, in specific projects. Such slowdowns usually happen when Chinese interests are negatively impacted elsewhere in bilateral relations.

For instance, Pakistani analysts have often criticised the repeated stalling of ancillary projects that China has committed to carry out in the country along with the larger CPEC connectivity initiative — building power producing units and tourism facilities. Mostly such hiccups occur whenever there are deadly attacks launched by armed Baloch militants targeting Chinese workers engaged in, ongoing projects in Baluchistan, causing serious damage.

Not only work related to the CPEC itself had been delayed, but smaller projects too suffered, and to hell with the immediate effect of such a breakdown on the local economy! Beijing-based authorities have been known to have put more and more pressure on the already stretched Pakistani security personnel, to prevent such strikes.

This despite the deployment of around 15,000-plus Pakistani security personnel specifically on duty to protect Chinese interests in the troubled areas. The experience of the Myanmar government too has not been very different, with China-aided projects. Observers feel that diplomatically and in terms of sheer economic heft and influence, China is far too strong for Pakistan, Myanmar or many other countries and Beijing therefore takes full advantage of this.

Sri Lanka has experienced some problems with China in the immediate aftermath of its financial collapse a couple of years ago. While Western countries and agencies, along with India, did their best to help the Sri Lankan economy, by offering softer terms in future agreements or extending periods for repayment of loans etc, the Chinese initially played hardball and refused to renegotiate terms and provisions of existing bilateral economic agreements.

The Chinese-aided housing project for low income families coming up at Maharagama near Colombo is part of the major Belt and Road Initiative (BRI). A small part of work has been completed. As of now 112 units are ready for occupation but the eventual target is for about 2000 units. Overall construction responsibilities are being handled by the Chinese Harbour Engineering Company.

As with most Chinese projects, officially, the ‘humanitarian’ side of the project is being highlighted, as it offers substantial relief to hard-pressed low income families by providing stable accommodation close to the national capital. Such a claim is hard to deny especially as the Sri Lankan on their own are not capable of implementing such schemes. Sri Lanka is struggling to make timely repayments to the IMF and other bodies that had advanced it loans etc on favourable terms to help it rebuild the economy.

No wonder then, the general concern about the ever-growing reliance on China for Sri Lanka’s overall economic development, with its obvious political implications, has grown. Economists point out that now Chinese assistance has been extended to the housing and real estate sector, while earlier it had been restricted to building infrastructure and connectivity — the construction of ports, highways and air fields, etc.

Here for Sri Lankans, no technological assistance was necessary from China as the country had its own growing real estate sector building houses and offices etc. Labour Union leaders are worried over the long term impact on employment opportunities for thousands of job seeking local building workers on the island. Economists and political circles in general feel uneasy about the Chinese controlling too much of Sri Lanka’s own economy and its political future, according to recent report in the Sri Lankan media. (IPA Service)