Myanmar lawmakers have sounded alarm over the country’s high and rising debts owed to China, urging the National League for Democracy (NLD)-led government to pay back the loans as fast as possible to avoid a sovereignty-eroding debt trap.
With foreign exchange reserves at a meager US$6.35 billion in 2018 and the national debt estimated at US$10 billion, of which $4 billion is now owed to China, parliamentarian Than Soe recently suggested sending rice instead of dollars to China. Whether China would accept such a deal remains to be seen. The interest rate on most Chinese loans is a whopping 4.5%, believed to be the highest rate among all the foreign government and financial institutions that Myanmar now owes.
Most of Myanmar’s foreign debt was accumulated between 1988 and 2011, a period when the country was subjected to Western sanctions imposed against the previous military regime’s poor rights record. At the time, China was the only major foreign donor willing to lend generously to the ostracized regime. Myanmar’s over two decades of international isolation left it heavily indebted to Chinese monetary institutions.
With foreign exchange reserves at a meager US$6.35 billion in 2018 and the national debt estimated at US$10 billion, of which $4 billion is now owed to China, parliamentarian Than Soe recently suggested sending rice instead of dollars to China. Whether China would accept such a deal remains to be seen. The interest rate on most Chinese loans is a whopping 4.5%, believed to be the highest rate among all the foreign government and financial institutions that Myanmar now owes.
Most of Myanmar’s foreign debt was accumulated between 1988 and 2011, a period when the country was subjected to Western sanctions imposed against the previous military regime’s poor rights record. At the time, China was the only major foreign donor willing to lend generously to the ostracized regime. Myanmar’s over two decades of international isolation left it heavily indebted to Chinese monetary institutions.
