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China's 'debt diplomacy' smothers recipient countries like Pak: US

Press Trust of India/Washington 11 Oct 18 | 03:35 PM

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China's development assistance to countries is aimed at increasing their dependency on it, the head of America's aid agency has said, amidst China's attempt to increase infrastructure investment as part of President Xi Jinping's ambitious Belt and Road Initiative.

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China had been accused of engaging in "debt diplomacy" by loading developing countries with debt as part of a strategy to build its influence across the region under the BRI.

China has denied criticism that its finance model is predatory and smothers recipient countries like Pakistan and China in debt they cannot pay.

Mark Green, the United States Agency for International Development (USAID) Administrative said the overseas developmental aid of the United States and that of China is fundamentally different.

"They are fundamentally different. So, what we always say is, 'We're working to help countries on their journey to self-reliance.' What we want is for countries to lead their own bright future. We want them to go from being traditional assistance recipients, to partners, to fellow donors," he said.

"China's a very different model. They build dependency. So, the choice is self-reliance versus almost servitude. What they do are loans, and as we're learning more and more, often unsustainable financing that's mortgaging a country's future," Green said.

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The US asks countries to take on their own challenges, foster their self-reliance, build their next generation of leaders, and then join us, in terms of leadership around the world, he asserted.

When these countries do not pay their loans, they mortgage strategic assets, he alleged.

Pakistan is one of a number of countries that have accepted Chinese financing for projects of Beijing's "Belt and Road Initiative" for building roads, ports and other infrastructure across the globe. The new government in Pakistan is reportedly concerned over heavy Chinese loans under the China-Pakistan Economic Corridor.

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Sri Lanka last year granted a 99-year lease on the Hambantota deep-sea port to Beijing, after it was unable to repay Chinese loans for the  $1.4-billion project.

"So, you see ports being, essentially, taken over by China. Sole, exclusive use of those ports. Dangerously extractive, often, strategic minerals, what should have been the birthright of young Africans, is tied up by financing from China," Green said.

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"And so, what happens is those young Africans never see the benefits. They never see the broad-based economic growth based upon their resources. Instead, the benefits go elsewhere," he said.

While giving aid, he said, US asks for reforms. "We ask them to respect certain rights and values. What we want for them is to become, eventually, trading partners," he said.

"But equal partners, in that. And the way that you do that is incentivise market-based reforms, build their capacity, increase their incomes. So, we want them to move, in terms of fully independent sovereign nations, leading their own future and becoming partners of ours," Green said.

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