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Asian Angle | Are Indonesia, Malaysia and Sri Lanka really ‘victims’ of China’s belt and road ‘debt trap diplomacy’?
- Indonesia owes Chinese lenders more than US$22 billion for financing projects like the 150-kilometre Jakarta-Bandung High Speed Train
- Analysts argue that recipient countries are not hapless victims, but actively shape how China’s development-financing system is being implemented
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Indonesia’s financial obligations to China are increasing, and there are worries they will continue to expand. Based on data from Bank Indonesia, debt from Chinese creditors as of March this year stood at US$22.01 billion, an increase from February’s figure of US$20.82 billion.
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Hong Kong creditors are also owed money, with total debt in March reaching US$16.85 billion. That is an increase from the March 2021 figure of US$14.25 billion, but down from the February 2022 total of US$16.97 billion.
Overall, however, Indonesia’s external debt in the first quarter of 2022 declined to US$411.5 billion compared to US$415.7 billion from the previous quarter.
Those figures were examined by AidData, a research institute based in the United States. Last year it released statistics concerning Beijing’s ambitious Belt and Road Initiative, and the potential for countries to be indebted to China for the construction of numerous infrastructure projects. Indonesia was said by the report to have hidden debt worth US$17 billion.
Many fear this debt to China will put Indonesia at risk of a default like Sri Lanka and Malaysia, the two most widely cited “victims” of China’s “debt-trap diplomacy”.
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