Wed Sep 18 03:27:16 UTC 2024: ## Sri Lanka’s Election Hinges on Chinese-Funded Mega-Project Despite Debt Crisis

**Colombo, Sri Lanka** – As Sri Lanka prepares for a presidential election on Saturday, the fate of a Chinese-funded mega-project, Port City, stands as a central point of contention. This comes amidst the country’s ongoing economic crisis, which has been partly blamed on Chinese-funded infrastructure projects that have accrued significant debt.

Sri Lanka faced its worst financial meltdown in 2022, leading to widespread protests and the ousting of former president Gotabaya Rajapaksa. The country’s dependence on Chinese loans for major infrastructure projects, many of which remain underutilized, has been criticized by Western nations, who label them “debt traps” for developing countries.

The upcoming election sees three main contenders – incumbent President Ranil Wickremesinghe, opposition leader Sajith Premadasa, and Marxist leader Anura Kumara Dissanayaka – all banking on the success of Port City to attract foreign investment and revive the economy. This project, which began in 2014, involves reclaiming land next to Colombo harbor and creating a special economic zone with tax breaks of up to 40 years.

Despite its potential, Port City remains largely empty, prompting questions about its viability. Critics argue that the project is merely a strategic move by China to solidify its influence in the region, rather than a genuine economic driver. They point to the fact that many companies relocating to Port City are existing Sri Lankan entities taking advantage of tax benefits, rather than new foreign investment.

However, the Port City Economic Commission remains optimistic, predicting $12-$15 billion in foreign direct investment to develop the zone. They emphasize that the project was financed by Chinese investment and not loans to Sri Lanka.

While President Wickremesinghe, once critical of the project, has now inaugurated a Duty Free mall at the site and secured parliamentary approval for offshore banking, the other candidates have also pledged to continue the project, albeit with potential amendments.

The upcoming election will reveal whether Sri Lanka can leverage this Chinese-funded project to overcome its economic woes or if it will further deepen the country’s reliance on Beijing, potentially hindering its economic independence.

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