Sri Lanka’s debts were mainly to Western countries and international finance institutions, and debts to China were “extremely well manageable,” a Sri Lankan official said.
“This myth that Sri Lanka is in a debt trap because of borrowing from China is not true,” Sri Lanka’s State Minister of Finance, Capital Markets and State Enterprise Reform Ajith Nivard Cabraal was cited in Sri Lanka state-owned Daily News as saying.
“The debts we have taken from Japan are larger than those from China. So are all other debts such as the ones we have obtained from the World Bank. Our debts on international sovereign bonds are larger than what we have obtained from China. Those debts are from American, European and Asian investors,” he said.
The debts to China have been taken out for very reasonable rates, sometimes much less costly than some debts Sri Lanka has incurred from international sovereign bonds, said Cabraal, adding that the loans from China are all long term, very well managed and paid on time.