Forty per cent of Myanmar’s government debt held by China
Lawmaker Daw Cho Cho calls for paying off loans to China “as early as possible”. About 97 per cent of Myanmar’s debt was accumulated between 1988 and 2011. China’s interest rates are high. Lawmakers demand quick adoption of a debt management strategy. Senator U Than Soe suggests sending rice instead of dollars to China.
Naypyidaw (AsiaNews/Agencies) – Myanmar has a national debt of some US$ 10 billion, more than four of which with China.
Two days ago, lawmakers began discussing the Joint Public Accounts Committee’s assessment of the government’s debt report, urging the government to pay off the loans from China as quickly as possible, pointing out that the 4.5% interest rate with China is the highest among all foreign countries that have lent to Myanmar.
“As we are allowed to pay back any amount any time we wish, we should pay back loans from China – whose interest rate is high and whose loan amount accounts for 40 per cent of the total national debt – as early as possible,” lower house lawmaker Daw Cho Cho told parliament.
According to the latest government debt report, Myanmar had racked up some US$ 4 billion in loans by 1988 and a further US$ 2.7 billion up to 2011—97 pe cent of which is owed to China. It says the government amassed another US$ 3.1 billion in loans between 2011 and 2016 and US$ 91 million more since then.
The previous Parliament approved US$ 300 million in loans from the Export-Import Bank of China at 4.5 per cent interest to fund a number of cooperatives.
Upper house lawmaker U Than Soe called for the urgent adoption of a debt management strategy to arrange loan repayments to China.
Citing international examples, he suggested that Myanmar repay China’s loans in the form of rice exports, as the majority of Myanmar’s rice is exported to China through border trade.
Parliamentarians are now waiting for answers from the government. Within four days, Union ministers will address the national debt issue in parliament.
In recent months, many Asian countries have become concerned over getting caught up in a possible debt trap with the Chinese juggernaut.
In many countries, more and more political leaders view China’s business model and Belt and Road Initiative (BRI) as a threat to national interests.
Last November, the government of the Maldives accused China of inflating the costs of infrastructure projects in order to put it and other countries in a situation of debt dependency. That same month, Beijing rejected the claim that Sri Lanka’s economy was trapped in a debt cycle.
Last December, the Indonesian government invited Chinese investors to take part in new projects worth US$ 60 billion, but excluded government-to-government loans.
Relations between China and Malaysia have become tense since Prime Minister Mahathir Mohamad came to power last May.
Following election campaign pledges, Mahathir cancelled more than US$ 20 billion worth of projects assigned to Chinese companies to avoid excessive debts.