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A Chinese labourer works at a construction site in Colombo – Pic by Buddhika Weerasinghe/Getty Images
By Wade Shepard
Forbes: A recent delegation to China led by Sri Lanka’s former President Mahinda Rajapaksa warned that there may be public unrest if China carries out a new plan to create a 15,000 acre special economic zone in Sri Lanka’s remote Hambantota District.
Together with the former External Affairs Minister Prof. G.L. Peiris, the delegation personally delivered their doomsday message in Beijing, Guangzhou, and Shenzhen.
Hambantota is the location of many large-scale, Chinese-partnered development projects that the Rajapaksa-led government started in 2008 with the ambition of turning an under-developed, tsunami-ravaged area that’s best known for its pristine beaches and wildlife preserves into the country’s number two city. Phase I of a $1.5 billion-deep sea port, a $209-million international airport, a world-class cricket stadium, a convention centre, and many miles of uber-modern highway were all built there with Chinese funding. Holding this grand scheme together was a proposed industrial zone, which would give ships a reason to come into port and a place for locals to work.
The original development plan – i.e. Rajapaksa’s plan – called for this industrial zone to be 750 acres, but the Chinese reputedly wanted to increase the size many fold, requesting 15,000 acres – an area larger than Providence, Rhode Island – in July for an SEZ big enough to create a million jobs. The recent Rajapaksa-led delegation claimed that in order for China to be given this much space that many villagers would need to be evicted from their homes and many farmers kicked off their land, which could provoke a less than favourable local response which may boil over into full-on protests.
Adding fuel to this projected fire is the fact that many of the development projects in Hambantota, which originally began as Sri Lankan national projects that were merely financed with Chines money, have gradually turned into de facto Chinese enclaves. Due to severe debt problems and a marked lack of profitability, 80% of the deep sea port and the Mattala International Airport (a.k.a. the world’s emptiest) were handed over to Chinese companies on long-term leases in exchange for debt relief.
The area of Hambantota where the deep sea port is located is now just referred to as China Harbor by the locals – presumably not only because the China Harbor Engineering Company built it. Many people here have sat by watching idly as their sleepy fishing village is converted into a major station along China’s 21st Century Maritime Silk Road, with towering office buildings, multi-lane highways, world-class transportation hubs, and other elements of the urban environment being copied and pasted all around them. In 2004, the coastal regions here were wiped out by a tsunami, which resulted in the deaths of 3,000 people, and now the waves of development are rolling through as the place is being rebuilt with gusto.
“We don’t want to see it like Dubai, with big buildings everywhere and no trees. This is Sri Lanka, we like green,” a local man who runs a beach-side hotel told me.
When I asked him what he thinks of the new deep sea port he just shrugged, as though it was something remote and far removed from his life rather than the venerable fortress that rose up within view right down the beach.
“The old Government they start something then the new Government they are slow to keep doing it,” he commented before shrugging and walking away.
I met a group of young fishermen a little way down the beach. They were huddled together inside of a bamboo and palapa hut. Their colourful traditional-style outrigger canoes were docked on the beach around us, one of which was painted to resemble a Jamaican flag with a Bob Marley head prominently emblazoned upon its hull. Reggae music emitted from one of their phones as they talked about how the new deep sea port impacted their livelihood. They claimed that they can’t fish in some of the places they used to and they now have to dodge the occasional ocean freighter.
“Is the fishing worse now?” I asked.
“Yes, very worse,” one of them replied.
“Can you fish by the port?”
“No, they have Navy. Very dangerous.”
Life goes on in Hambantota as though the port, the airport, and the rest of the newly-built infrastructure didn’t exist. The rural status-quo churns onward in spite of the fact that the landscape is being physically changed. The massive infrastructure projects of China’s Belt and Road initiative are often reshaping places with a distinct absence of citizen engagement, as though somehow encapsulated away from the local ecosystem. While people in these new epicentres of development are told that these big mega-projects will be to their benefit — and sometimes they really are — the sheer disconnect between the local way of life and the 21st century infrastructure that is being airdropped upon them is often incredibly stark. A state of affairs that, as Sri Lanka’s former President points out, can lead to discontent.
However, a large segment of Hambantota is passionately supportive and proud of their new developments, and have occasionally taken to the streets to stick up for them. When it was reported that the nearby Mattala International Airport was being used by the Government to store rice rather than being developed into the aviation hub it was meant to become, they erupted in protest.
Mahinda Rajapaksa, who was President for nine years and reigned with near omnipotence, remains a highly-polarising, controversial figure in Sri Lanka. He is held by some to be a national hero, having ended a decades-long civil war; while to others he is a corrupt, nepotistic, war criminal. Oddly, he seems to have appointed himself to continue serving a diplomatic role for Sri Lanka, and still meets with members of foreign governments, advises current officials, and apparently leads international delegations where he speaks on behalf of the country that he no longer rules.
Whatever is the case, the fact of the matter is that the deep sea port at Hambantota specialises in bulk cargo, and a bulk cargo port without a corresponding industrial zone is about as useful as an airport without any flights.
(The writer is the author of ‘Ghost Cities of China’ and is currently travelling the New Silk Road doing research for a new book.)
Finance Ministry said yesterday while this Government is making meaningful endeavours to convert the infrastructure facilities constructed by the previous Government at colossal cost with foreign loans, former President Mahinda Rajapaksa is making allegations that the Government is selling off national assets.
“The Government vehemently rejects these allegations and it is unbecoming of a person who ruled this country twice to implement such a vicious circle to mislead the people,” the Finance Minister Ravi Karunanayake was quoted as saying in a statement by the Ministry.
The previous Government put the nation in a debt trap, making the country unaffordable to bring any returns on its development. The cost for Hambantota Port and Mattala Airport initially made as unsolicited proposals were later doubled at the time of implementation. As a result the Government’s revenue gradually deteriorated to an average of 11% of GDP.
Prime Minister Ranil Wickremesinghe during his recent visit to China held successful discussions with Chinese authorities to convert these credits into equity. Accordingly, the Hambantota Port which failed to bring return on its huge investment will be converted into a joint venture between the Sri Lanka Ports Authority and China with the equity of over $ 1 billion. This will enable the Government to retire a sizeable portion of the loan obtained for the Hambantota Port.
Similarly, Mattala Airport, SriLankan Airlines and Hambantota Investment Zone will have Public Private Partnership (PPP) investment without selling off or privatising any assets of the nation as alleged by the former President and his allies, which is malicious and misleading. It is pity that even certain trade unions are making the same allegations, giving life to the vicious circles of those politicians.
After Budget 2017 was presented in Parliament, Mahinda Rajapaksa has unleashed another canard to say that the Central Bank of Sri Lanka is to be privatised. At the time the Government has taken the steps to convert the country into a manufacturing economy, all stakeholders representing all sectors of the economy have hailed the Budget as a positive step towards it. The Government perceives these acts by the former President as malicious and misleading attempts with an ulterior motive to jeopardise the economic development of the country. Infact the assets of this nation were sold off to foreigners during the regime of Mahinda Rajapaksa. The land of the Army Headquarters at Galle Face and a land at Hambantotawere given as a freehold to a foreign company to construct a hotel complex. At that time there was a 100% levy on land purchased by foreigners. But this was waived off by the previous Government at the behest of then Minister Basil Rajapaksa.
In addition, at the Colombo Port City, the then Government not only gave the foreign company the portion of reclaimed land as freehold but also excluded it from Sri Lankan jurisdiction as well. But no sooner this Government came into office it took the initiative to retake the land given freehold to China, bringing them under Sri Lankan jurisdiction
As a result of Mahinda Rajapaksa ruling this country twice while serving as the Minister of Finance as well, what we inherited was an inflated GDP growth largely due to high cost infrastructure facilities carried out without prioritising them to suit the needs of the economy. This didn’t have any favourable effect on economic development and the end result was an unprecedented increase in debt servicing and deterioration of national revenue, making it impossible to cover recurrent expenditure or debt servicing. In this context, how can Mahinda Rajapaksa, MP, claim that during his Government the country was developed? It must be the reason for Ministers of his Cabinet to allege that there were economic killers in the Government at that time.
