The projects were part of China’s signature Belt and Road Initiative (BRI), One of the projects, dubbed the East Coast Rail Link, would have connected the South China Sea with strategic shipping routes in Malaysia’s west, providing an essential trade link. The other was a natural gas pipeline in Sabah, a Malaysian state on the island of Borneo.
The World Bank, which funds infrastructure projects in many developing countries, has said the Belt and Road Initiative comes with potential benefits and risks. In a blog post a senior World Bank economist said successful BRI projects could improve infrastructure and commerce in countries that have had difficulty integrating into the world economy.
But the economist, Michele Ruta, added that for some countries, “the financing required for BRI projects may expand debt to unsustainable levels.”
Sri Lanka accepted such loans from China after the end of civil war in 2009. Today, Sri Lanka spends about 80 percent of its government revenue paying down what it calls “unprecedented” debt — often for near-empty highways or glossy international airports that host just one flight a day. Sri Lanka had to lease out the Hambantota port to China for 99 years.
Malaysia is struggling under $250 billion in debt. Mahathir said his decision to freeze two big projects will help his country save money.
Sources :
1. Washington Post
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