August 9th 2019
The BRI has the potential to deliver economic benefits to countries, but it also exposes them to financial and political risks. In December 2017, for example, Sri Lanka formally passed control of the US$1.5bn Hambantota Port to a Chinese-led joint venture under a 99-year lease when the government faced problems with repaying debt related to the project. The IMF will still play a significant role as a lender of last resort in the region, as the government of Pakistan discovered in October 2018 when it was forced to make a formal request to the IMF for a bail-out package to stave off an impending balance-of-payments crisis. Although Pakistan has been the recipient of significant funds under the China-Pakistan Economic Corridor (CPEC), emergency support from China (and other bilateral sources, such as Saudi Arabia) was less forthcoming than the government had anticipated.