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Walking a tightrope: Singapore and Asean navigate the great power struggle for influence

Bryan Wu
Bryan Wu8/4/2022 01:46 PM GMT+08  • 15 min read
Walking a tightrope: Singapore and Asean navigate the great power struggle for influence
At the G7 meeting from June 26 to 28, US President Joe Biden (front, centre) and his counterparts announced the Partnership for Global Infrastructure and Investment programme, which is positioned as a counter to China’s Belt and Road Initiative
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As Gotabaya Rajapaksa boarded a Saudia plane from the Maldives on July 14, he was still Sri Lanka’s president. That changed after he arrived in Singapore — and resigned via e-mail — marking an ignominious end to his family’s multi-decade rule of the country he abandoned with inflation at a crippling 54.6% and a mountain of foreign debt on which it has defaulted.

Protesters who overran the presidential palace in Colombo were furious with Rajapaksa for precipitating the economic crisis with needless spending on grand infrastructure projects, ranging from convention halls to international airports and even cricket stadiums. The US$3.1 billion ($4.27 billion) spent on a port in Rajapaksa’s hometown of Hambantota, largely funded by China, drew particular ire. Now controlled by China, the port is seen as a key node of China’s Belt and Road Initiative (BRI) that aims to connect the entire Euro-Asia landmass and Africa.

To be sure, China’s share of funding stands at just around 10% of Sri Lanka’s total debt. Various creditors, including the Asian Development Bank (ADB), the World Bank, India, Japan and Western institutions, are owed similar amounts. Unfortunately, for all the potential of the Hambantota port serving as an additional alternative to Colombo’s, Sri Lanka is now seen as part of a growing list of emerging economies drawn into “debt-trap diplomacy” through which generous loans from China are used to fund projects with uncertain returns. According to the American Enterprise Institute, the value of China-led BRI infrastructure projects hit US$838 billion by the end of last year.

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