Chinese trap: When Gen. Rawat had warned Nepal about what Sri Lanka, Pak stared at

New Delhi, Apr 05: Both Sri Lanka and Pakistan are in economic doldrums and the political crisis is only adding to the worse of these two nations that neighbour India.

One of the main reasons for this is the Chinese debt trap.

The situation in these two countries has now forced nations like Maldives, Bangladesh and Nepal to think again on the Chinese infrastructure and also being part of the BRI initiative.

In Sri Lanka the blame clearly lies on Rajapaksa who began leaning towards the Chinese heavily much to the displeasure of India. The nation brought upon itself immense economic stress by taking high interest loans from China in the name of developing infrastructure.

Pakistan on the other hand has more than 10 per cent of its debt owed to China. Imran Khan has been blamed squarely for the economic mess the country is in today. Due to this high value debts the country has not only fallen economically, buy has also plunged into political crisis. Khan is making matters worse by whipping up public sentiments and blaming the situation on a foreign conspiracy against him and his government.

Both Pakistan and Sri Lanka face complex situations as the US has a great amount of control on the global financial institutions. This would make it harder for the two nations as they have shifted their loyalties to China.

Prior to his passing away, India's first Chief of Defence Staff, General Bipin Rawat had spoken about these issues. He advised Nepal against signing off on loans from countries in the region and asked it to learn from Sri Lanka's experience.

Nepal must learn from countries like Sri Lanka and stay vigilant in its dealings with China, General Bipin Rawat said.

General Rawat was addressing the annual dialogue between the Centre for Land Warfare Studies in New Delhi and the Nepal Institute for International Cooperation and Engagement.

Here, I would like to stress that India's goodwill comes with no strings attached. Nepal is free to exercise its choices in international affairs, but it should stay vigilant and learn from some cases of Sri Lanka and other nations who have signed agreements with other countries in the region, he said.

The unique India-Nepal ties have been built over centuries. In the present age, Nepal is also opening up to other nations, including China based on its independent foreign policy, he said.

The General's statement were an obvious reference to to the way China has entrapped several nations in debt through infrastructure projects. India has concerns that China through its infrastructure projects are making inroads into Nepal in a bid to work against New Delhi's interests in the country.

Nearly 50 per cent of the loans extended by China were not reported. The Chinese state and its subsidiaries have lent around 1.5 trillion USD in direct loans to more than 150 countries, according to the Harvard Business Review. China is the world's largest official creditor and surpassed official lenders such as the World Bank, IMF or all OCED creditor governments combined, the study noted.

In South Asia, it is Pakistan and Bangladesh which have taken the highest loans from China. While Bangladesh owns USD 4.7 billion, in the case of the Pakistan the loan is USD 22 billion.

Maldives on the other hand is worried about the debt trap. The Chinese debt bill was around USD 3.1 billion including government to government loans. The country may struggle to repay the loan by 2022-23 given how the economy has been strugling.