External Affairs Minister S. Jaishankar, responding to Bangladesh Foreign Minister AK Abdul Momen’s question about whether the Quad countries can provide the same level of financial assistance as China, said that countries seeking loans should be concerned about unsustainable infrastructure projects such as empty airports and ports.
Mr. Jaishankar also said that India’s ties with China are currently going through a “difficult phase,” adding that the state of the relationship stems from “the state of the border,” as well as China’s transgressions along the Line of Actual Control since April 2020, in an exchange at the Munich Security Conference on Saturday.
Jaishankar cites the example of Sri Lanka to Bangladesh
“We have seen countries, particularly those in our region, become encumbered by massive debts.” We’ve seen projects that are commercially unsustainable: airports where planes don’t fly in, harbors where ships don’t dock,” Mr. Jaishankar said during a panel discussion on the Indo-future, Pacific’s in comments that appeared to allude to Sri Lanka’s debt situation, where there have been concerns about the Hambantota Port and the Mattala airport, both of which were built with Chinese loans that Sri Lanka struggled to repay, eventually having to hand over the facilities.
“It’s definitely in the consumer country’s interest, but it’s also in the international community’s interest since unsustainable initiatives don’t stop there.” “Often, debt becomes equity, and equity becomes something else,” he explained, illustrating the issue Sri Lanka was facing.
Significantly, the Foreign Minister of Bangladesh, who was in the audience of Mr. Jaishankar’s panel discussion with the Foreign Ministers of France, Australia, and Japan, as well as senior US Senator Jeanne Shaheen, raised the issue of infrastructure financing.
Mr. Momen added that while India had extended Lines of Credit and Japan had assisted with infrastructure funding, incoming loans had been “dwindling,” and China had “came forward with a basket of money and aggressive, inexpensive ideas.” Mr. Momen said it was difficult to decide what to do because people in Bangladesh are expecting more infrastructure as the country develops.
“We require more cash from our development partners, but this comes with a lot of strings attached, making it tough.” Our greatest loans come from the World Bank, the IMF, and the ADB, but we’re also looking for assistance from other sources because the demand for development is so great. “Does there seem to be a simple way out?” Mr. Momen posed the question to the panel.
While the Quad grouping has set a goal of providing long-term, alternative funding, it has yet to put in place a clear mechanism to do so. The United States has proposed a “Blue Dot network” to assess various development projects based on their sustainability and transparency in financing alternatives, and India and Japan have agreed to collaborate on South Asian initiatives.
In response to a question about India’s relations with China, Mr. Jaishankar reiterated his claim that the situation at the LAC had arisen as a result of China’s actions in 2020. “Obviously, ties with China right now are going through a very tough phase,” he said, adding that “the status of the border will decide the state of the relationship, that’s natural.”
When asked if the Quad was born out of concerns with China, Mr. Jaishankar pointed out that the 2007 Quadrilateral grouping was revived in 2017, long before tensions with China erupted in 2020, and that it is not a security structure like the North Atlantic Treaty Organization. “I strongly advise you not to use the clumsy analogy of [calling the Quad] an Asian-NATO. It isn’t because three countries [the United States, Japan, and Australia] are treaty allies. Mr. Jaishankar stated, “We are not a treaty ally.”