Loans infringing on sovereignty problematic: USAID chief on Sri Lanka crisis

NEW DELHI: While praising India’s economic support for Sri Lankavisit the United States Agency for International Development (YOU SAID) Manager Samantha Power cited China’s “unclear” loan contracts with the island nation with very high interest rates as one of the reasons for the country’s current financial difficulty.
The power also called on all countries including India to ensure that Russia does not abandon the UN-backed grain deal it signed with Ukraine to minimize global food crisis.
Power discussed the situation in Sri Lanka with her Indian interlocutors and addressed a meeting later in the day, identifying economic mismanagement and corruption, agricultural policies unwise, debt burdens, and the Covid-crushed tourism sector as the sources of the financial crisis.
“When the process of obtaining loans brings profound intrusiveness to sovereignty and independent and interest rates are very high, then things are going to matter,” Power said, responding to a ToI query about her comment that unclear loan agreements contributed to the crisis. crisis.
Power is currently on a visit to India to “advance the partnership” of the United States “with the government and people of India, and strengthen India as an important global development leader in the addressing urgent global challenges, according to US authorities, she met with foreign minister S Jaishankar on Monday. On Tuesday, Power also met with civil society representatives to discuss rights freedom of speech, expression, identity and “the importance of protecting the rights of minorities”.
She is said to have emphasized the United States’ “continued commitment” to working with civil society organizations around the globe to advance human rights and fundamental freedoms.
According to Power, the debt challenge is not unique to Sri Lanka, and many “indebted” countries in Africa and Asia are hoping that their calls will be answered. It is absolutely necessary for Beijing to engage in debt forgiveness transparently and on terms that are fair to all other creditors, she said.
“Indeed, over the past two decades, China has become one of Sri Lanka’s largest creditors, offering loans that are often opaque with higher interest rates than other lenders and financing for a series of eye-catching infrastructure projects whose actual uses often cast doubt on the people of Sri Lanka,” said Power.
“Now that economic conditions have worsened, Beijing has promised credit lines and emergency loans – which is important as Beijing is estimated to hold at least 15% of its external debt. But calls for more substantial bailouts have so far gone unanswered, and the biggest question of all is whether Beijing will restructure its debt to the same extent as other countries. other bilateral creditors,” she added.
While praising India’s tolerance for dissent and diversity, Power also said the winds of anti-democracy are strong around the world and stressed the importance of important to both India and the United States, of protecting pluralism, democracy and individual rights.
Within the United States and India, she added, there are forces that seek “to sow division; those who seek to divide races and religions against each other; those who want to bend the law, abuse institutions and use violence against those who stand in their way”.
“We saw this, of course, on January 6 in the United States, back in 2021, just last year. democracy and individual rights – will determine not only our trajectory but also that of the world. the world we live in,” she said.

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