'Countries Saddled With Large Debts': Jaishankar Takes Dig at China's 'Debt-Trap Diplomacy'

New Delhi: Speaking at the Munich Security Conference on Saturday, February 19, External Affairs Minister S. Jaishankar preached caution to developing countries seeking foreign investment to fund development projects.

Jaishankar was responding to a question posed by Bangladesh Finance Minister A.K. Abdul Momen, who was seated in the audience, to the panel at the conference which the Indian foreign minister was a part of.

Other panel members included the foreign ministers of France, Australia and Japan as well as US senator Jeanne Shaheen.

Acknowledging the assistance provided to Bangladesh in the past by India and Japan, Momen asked the panel if the Quadrilateral Security Dialogue (Quad, comprising the US, India, Japan and Australia) would be able to provide the kind of financial assistance that China is currently offering.

“China comes forward with a basket of money and aggressive proposals, affordable proposals, and then you have a problem. What to do?” the Indian Express quoted Momen as saying.

Jaishankar, describing international relations as “competitive”, said that while every country will look for opportunities, it is in their own best interest to be “prudent” about what they are getting into and to “do their due diligence”.

“We have seen countries, including in our region, being saddled with large debts,” Jaishankar said; a remark that is being seen as a thinly-veiled dig at China and its ‘debt-trap diplomacy’.

This kind of diplomacy refers to China’s offers of loans for infrastructure projects (under the Belt and Road Initiative) that end up being too difficult for the recipient country to repay, thereby resulting in the country having to make some economic/political concessions to China, generally in terms of equity in the initiative.

Also read: How China Is Expanding Global Influence via Debt Trap Diplomacy

While the foreign minister did not name China, he went on to say, “We have seen projects which are commercially unsustainable; airports where aircraft don’t come, harbours where a ship doesn’t come,” which is ostensibly a reference to Sri Lanka having to hand over majority control of the Hambantota port to China due to the external debt situation in the former.

This link was made more clear when Jaishankar said, “..bad, unsustainable projects don’t end there. Debt becomes equity and that becomes something else.” Thus, Jaishankar said that it was “very important” for countries to make “informed decisions”.

At a different point during the conference, Jaishankar did, however, refer to China.

When asked about India’s relations with the country, Jaishankar was quoted by The Hindu as saying, “The state of the border will determine the state of the relationship, that’s natural,” and that the relationship with China is currently going through a “difficult phase”.

Jaishankar, when asked if the Quad had come up as a response to tensions with China, refuted the suggestion, pointing out that it had first been established in 2007, long before tensions with China escalated, and was revived in 2017.

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