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Comment by asciiresort | Hacker News Reader

> Without imports, many Sri Lankans will quickly find themselves hungry, stranded

How did these island nations sustain themselves before ? In other words, what has changed that they can’t live off the land anymore? And by that, I mean the sea.

Has Sri Lanka’s fish been pillaged? Is it being exported to wealthier nations that command higher prices, even as there is a domestic food crisis?

How much of this is because of globalism and developing hard dependencies? I’ve traveled to all 47 of Japan’s prefectures and I still see bountiful agriculture in the countryside. Even as developed and wealthy as Japan is, with many global dependencies in imports/exports, it is still heavily invested in agriculture.

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> In other words, what has changed

It's often a series of mis-steps that lead to catastrophic failures such as being suffered by Srilanka. Here are a few that come to my mind, in no particular order.

  1. Tourism took a big hit due to COVID lockdowns.

  2. They took on huge debt from China to fund their massive infrastructure developments with close to zero plan as to how to reap the benefit of that infrastructure. For instance this airport[1]

  3. The knee jerk banning of fertiliser.

  4. Corrupt and authoritarian (despite being democratically elected) government favouring their cronies.

News articles trying to analyse look for a recent bad policy choice such as fertiliser ban but one could see that even 5 years ago that Srilankan economy was being badly managed. The ingredients of catastrophe were there and COVID acted as the catalyst.

[1] https://www.forbes.com/sites/wadeshepard/2016/05/28/the-stor...

[2] https://www.reuters.com/markets/commodities/sri-lanka-rows-b...

#2 is actually false. Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones.

See this detailed report by The Atlantic: The Chinese ‘Debt Trap’ Is a Myth https://www.theatlantic.com/international/archive/2021/02/ch...

And this study by British campaign charity Debt Justice, which found that the situation in Africa is similar: https://debtjustice.org.uk/press-release/african-governments...

The Chinese debt trap is a lie made by mainstream media, who for some reason blindly writes negative China articles without any kind of factual investigation. Worse, these lies distract us from actual debt traps initiated by western actors — over we which we have far more control than China. If we actually care about these countries then we need to first demand from the media that they do factually correct reporting.

Then why did China ask for the Hambantota port[1]. It is a clear strategic and economic policy. Not to deny other countries haven't done that in the past; but it is a clear way of gaining control - especially the taking control over infrastructure part.

Same is the case with Africa, and many projects of which do not benefit the citizens of those countries in any way too. [2]

[1]: https://www.nytimes.com/2018/06/25/world/asia/china-sri-lank... [2]: https://www.youtube.com/watch?v=aJSD8XV3qzE

The Hambantota case is described in detail in The Atlantic's articl, which explains why it's not a debt trap. For one, the feasibility study for Hambantota was first made by Canada — the Chinese only came in later, competing with western countries for its construction. Second, see this excerpt:

> Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota.

Even if we assume that Hambantota is a problem, total Sri Lanka debt owned by China is still at 10%, much less than non-Chinese debt. China is not the biggest problem, if it is one at all.

Whether projects benefit citizen really is up to African governments. Chinese companies build whatever African governments ask them to; Chinese don't force their projects on Africa. When I buy a house and the house doesn't end up benefiting me, that's my problem for having chosen that house, not the mortgage's fault for "debt trapping" me.

But it's not at all set in stone that none of the projects, or even the majority of the projects, are useless. In a recent study, "China Surpasses US in Eyes of Young Africans, Survey Shows": https://www.bloomberg.com/news/articles/2022-06-12/china-sur...

I'm not sure why you're carrying so much water for China, a huge nation that can fend for itself.

China absolutely throws its weight around - just like all the other big nations.

It also blindly pursues its own self-interest again like all the other big nations.

China also isn't a monolith, with companies and individuals making deals or going after projects abroad. Sometimes on win-win terms, sometimes trying to screw a target out of money. Again - just like other nations.

China uses money in diplomacy. That's just a fact. They do so not out of altruism but out of self-interest.

I can also turn this around: I'm not sure why you have so much problem with me pointing out that accusations are not based on facts. It sounds as if you want those accusations to be true despite facts.

What is wrong with doing things not based on altruism? There is nothing wrong with business. Nobody builds bridges and hospital for free.

> Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones

My understanding is more of the Chinese debt is unproductive. 5% borrowed to build a useless port saps FX in a way 20% borrowed to buy yield-boosting agricultural inputs does not.

From The Atlantic's article, the feasibility study for the Sri Lanka port came from Canada. The Chinese didn't "trap" them into something unproductive, a western study said it's feasible.

Also there were conditions linked to the debt. Here is the money but you have to use it to build a highway using Chinese companies. Pure neocolonialism

Those conditions are negotiable. Countries can say "no" to "using Chinese companies". If countries say "we want local companies" then Chinese negotiators say "okay let's do that".

Furthermore, a major reason why Chinese companies did the work was due to a lack of skilled workforce in the country. Some countries chose for a hybrid model, where they ask for Chinese companies to train local workers.

Finally, if something does go wrong, then The Atlantic's article says that Chinese lenders are often willing to restructure the loan.

> Countries can say "no" to "using Chinese companies".

Except they aren't as the contracts prohibit open bidding.

> The Atlantic's article says that Chinese lenders are often willing to restructure the loan.

Except when they are not willing, which is most often the case. They restructure when things are seemly fine but if shit hits the fan like in the case of Sri Lanka, they wont discuss it.

But the CCP prob jots it down to 'a mistranslation' and 'rumor' as they have done in the past.

They restructured African debts when Africa got into trouble due to COVID, so the claim that "they only restructure when things are fine" is emperically false.

Regarding being able to negotiate: high-profile African commentators, such as Gyude Moore, have pointed out on multiple occasions that it's perfectly possible to say no to an offer, after which the Chinese offer new terms. You should check out his videos some time.

So because they restructured some they must restructure all despite the fact they refused to restructure Sri Lanka. So Sri Lanka is stuck paying like 5% interest vs japans 0.7%.

I know you love the CCP but it’s hilarious how much credit you give them despite not wanting to live in China.

I can also turn this around: what about the non-Chinese lenders who own much more Sri Lanka debt? Do they restructure? Why single out China specifically? Why is it necessary for China to allow restructuring all debt? Would you impose this standard on all other lenders?

It is entirely possible to be fed up with anti-China propaganda while not being specifically a CCP supporter.

It is also entirely possible for an overseas American to say positive things about the US without living there.

If I do live in China you’ll just say that I'm being forced to say these things. Since you can't, you mock me for not living there, making up some arbitrary requirement that doesn't make sense. This is intelectually dishonest.

It’s not anti-China propaganda when 1) it’s not propaganda. And 2) it’s about the CCP not China.

But calling it anti-China is a typical tactic to attempt to discredit people.

China credit is the only one knocking on doors and wanting ports to be built by paying off governments to push things through when the courts are saying it’s not a good deal and it has non favourable clauses with the end result of china getting to control the port they built at the cost of the government.

It's not propaganda except the narrative literally came from Trump, while the US govt has publicly admitted to sponsoring anti-BRI journalism: https://prospect.org/politics/congress-proposes-500-million-...

It's "only about the CCP" except Chinese scientists, Chinese engineers, Chinese students and other ordinary Chinese people are declared "linked to the CCP" without evidence, thereby destroying their lives. "Nearly 90% of the defendants charged with spying are of Chinese heritage. This includes citizens with connections to Taiwan, Hong Kong, and long-standing Chinese diaspora communities in Southeast Asia": https://www.technologyreview.com/2021/12/02/1040656/china-in...

And even if it's only about CCP, how does that justify not basing accusations on facts? I do not at all oppose you having legitimate grievances against CCP. I do oppose false grievances with no basis in reality, against any party.

You end your post with a claim. Please provide evidence that China forced countries to take loans, as opposed to countries having agency in this matter.

Started with Trump lol people have been talking about China Debt Trap since early 2000.

People have been critical of the CCP massively since Xi took power and started causing conflicts with all neighbouring countries with his power push.

Please lol blaming trump lol that’s funny on a whole new level.

I mean it's literally in the Atlantic article:

"The Trump administration pointed to Hambantota to warn of China’s strategic use of debt: In 2018, former Vice President Mike Pence called it “debt-trap diplomacy”—a phrase he used through the last days of the administration—and evidence of China’s military ambitions."

Look, you keep lol'ing, moving the goalpost and making new claims, but how about you actually discuss based on facts and provide evidence? I keep providing counter-evidence but you keep moving the goalpost every time you can't counter those.

Again, I have nothing against legitimate grievances. But keep it factual rather than based on spite.

So are we talking about the term 'debt-trap diplomacy' or the narrative? The term start in 2017 not 2018. But doesn't change the fact its been discussed for about 20 years now.

By changing from the narrative to a term you're shifting the goal post.

Are there any examples of western nations taking control of power grids, ports, etc, when those loans are defaulted on?

It used to be, mind you some decades ago, a normal policy for foreign government to keep what they have payed for. Take Panama or Suez canal. That being said, the practice is essentially colonialism and for various reasons it became taboo in the west.

Publicly that is. If you are private company there is still a lot of things you can get away with, but you won't get gunboats to show up anymore.

Simply put. China is doing the same thing. Performing business like decisions on international scale. West has just decided that such approach is immoral and mostly abandoned it as a policy.

> West has....abandoned it as a policy.

Has it though? They don't do it overtly but through IMF. When a debt ridden country approaches IMF for help that help comes with heavy strings attached such as cutting down social spending, and privatisation. And IMF is controlled by ex-colonial nations. Even a developed nation like Greece got a taste of it. The funny thing is through a debt ridden country IMF is in fact helping debtors who are mostly western entities.

There are quite a few layers here to peel but safe to say west hasn't abandoned their policy just that they outsourced it to IMF.

If the lending country is poor and one does not take the asset itself as collateral, then how does one lend to these countries? Don't lend at all? What should these countries do to acquire critical infrastructure?

You are on the right track. That's one of the reasons China makes inroads across global south, because it's willing to "make a deal". Another reason is that China doesn't want any sort of commitments to international standards, democracy etc.

Western governments offer 'help', but it's rarely what local governments want. And often it means publicly complying with rules imposed from the 'outside'. When the 'outside' includes your former colonial overlord and you have turned anti-colonialism into most important aspect of your political identity (for example African Union has no problem with dictators, or genocide, but you better not have capital on different continent) you'd be undermining your regime by accepting it.

In the meantime China offers exactly what you ask for, and doesn't ask about minorities or how long your presidential term is.

For now it's mostly working out for locals, their governments at least. In the long run ... Congo had very beneficial relationship with Portugal during the first century or so, not so much afterwards.[0]

[0] https://en.wikipedia.org/wiki/Kingdom_of_Kongo#Foundation_of...

There are those who believe that conditions such as committing to international standards and democracy, even though well-intended, are actually counter-productive — at least during a country's development phase.

It's indeed an open question how beneficial the relationship will be in the long term. But it's not at all guaranteed that it will end up like Portugal. China was a big naval power during the Ming dynasty, but didn't colonize Africa or South-East Asia. One should be careful with projecting western history onto China.

Some high-profile Chinese figures recognize the problem that BRI projects don't always end up benefitting people. For example, Zhang Chun, researcher at the Center for African Studies at Yunnan University, said this:

"There is a lack of an accurate analysis of Africa's benefits from the Belt and Road Initiative and that needs to be remedied"

Source: 欧亚系统科学研究会 https://mp.weixin.qq.com/s/Vva1N_LVMBwcfpZcSl57rw

Yes, privatization was heavily pushed by the IMF in Latin America and Africa as a condition for receiving loans [0].

[0] https://en.wikipedia.org/wiki/Structural_adjustment

Not producing enough food is pretty normal. In my native Norway we have not been self sufficient in hundreds of years. Only 2.5% of the land is arable. Any time there was a serious war and shipping lanes got blocked like in Napoleonic wars we got into deep trouble. Plenty of people died. Same deal in the Netherlands. They were not self sufficient in their Golden age. The Soviet Union was not self-sufficient. It was a big reason why it collapsed. It got import problems just like Sri-Lanka causing political turmoil and eventual collapse.

Funny what being unable to import can do to a country. The US cannot have this problem since it controls the world reserve-currency. It can in principle print itself out of any problem.

> The US cannot have this problem since it controls the world reserve-currency

you got that the wrong way around. The US has the world reserve _because_ it cannot have this problem (of not having enough domestic production of necessities).

The world isn't entirely controlled by the US - even though they do dictate a large portion of financial policy all over the world, the countries of the world decided to use the US currency as an intermediary because of the stability and assurances (that has recently been shocked by financial sanctions of magnitudes never seen before).

> […] the countries of the world decided to use the US currency as an intermediary because of the stability and assurances (that has recently been shocked by financial sanctions of magnitudes never seen before).

After WWII, the world agreed to use the US Dollar as reserve currency because the US promised to exchange every 35 USD for one troy ounce of gold, as per the Bretton Woods agreement.

And when the US defaulted on this obligation in 1971 the world continued using the USD since there was no other politically viable alternative.

> It can in principle print itself out of any problem.

Except inflation, as we are learning.

Strangely, you can print money during a recession without causing inflation.

But you have to stop when the recession is over. That has proven hard for people to remember to do.

Sri Lanka's population is 2x what it was in 1965.

https://www.macrotrends.net/countries/LKA/sri-lanka/populati...

Japan imports about 60% of its food.

https://www.merlofarminggroup.com/agri-view-japan%E2%80%99s-...

I am well aware that Japan imports food.

The point is not about whether a country imports at all, but whether it can mobilize domestic production of essential food crops in times of crisis.

Even China import and has rice reserves. There is a reason these government have and subsidized rice reserves rather tea reserves.

I think Japan is well aware it couldn't feed the whole island chain even if it absolutely needed to, but it also has a robust domestic manufacturing and high tech industrial exporting sector which continually acquires funds for foreign currency and food. Totally unlike Sri Lanka.

To put it crudely Japan doesn't need to grow all its own food because people send it money for Toyotas and Mitsubishi cargo trucks and such, and it uses that to buy whatever food it wants.

> whether it can mobilize domestic production of essential food crops in times of crisis.

Sri Lanka could, but not with the chemical fertiliser ban.

As the article notes the government forced the food production to go all organic in one year with no plan, yields crashed, and now they have to import even rice.

It sustained itself thru tourism and local food production.

They have sold tea overseas since being a British colony.

Also, another factor is they have to import all their medicines and oil, which is also dependent on foreign reserves. So now not enough food, no cooking fuel, no medicines, no petrol, and not enough fuel for electricity. Truly a wretched set of problems.

You can buy Dilmah tea to help, Hand made Batik shirts, and visit. It is a truly lovely country, with good tourism facilities.

> Dilmah tea to help, Hand made Batik shirts

In my experience, exported goods provide very little profit to the original manufacturer. The middle layers greedily absorb all the profit. In fact, in the west, labor costs to stock/sell it in the supermarket are significantly higher than what the manufacturer made for their effort.

Instead, I’d really recommend donating the money to an action group or trusted charity, ideally if you can also verify they are doing actual things on the ground.

It is hard to do from the US. I can donate directly to my family and have them give to local aid groups but have not been able to donate directly except to groups that have a US presence (and no doubt much higher aid overhead).

But longer term, having Sri Lanka goods be valued on the world market will help the island. Dilmah employs a lot of people on the island.

Cancelled flights, fuel shortages and street violence aren't helping the tourism sector.

> It is a truly lovely country, with good tourism facilities.

Not to mention the people. Absolute wonderful human beings despite years of war and turmoil.

> As the article notes the government forced the food production to go all organic in one year with no plan, [...]

Because spending on fertilizer was a lot of their foreign currency spending, and the government thought "We'll just force 'organic farming' so our spending will look better!".

I'm looking forward to going back in a year or so, when the situation stabilises.

My risk appetite is significantly higher than the average tourist, but even I'm not stupid enough to go there right now when there's the potential for things to get much worse, very quickly.

Population grew.

In Japan agriculture is heavily subsidized, in particular rice production. Stuff that is not heavily subsidized focuses on high margin premium. They can't compete on volume/price but can on quality. After eating expensive apples or grapes there nothing really compares anywhere else

That’s my point about Japan.

Rice, unlike tea, is a defensive measure for times of crisis. Even as Japan imports food, the point is whether the country can quickly mobilize and ramp up to essential food crops. The point is having options and a hedge, which allows you leverage during economic negotiations for other things.

The percentage of imports you can have should be bounded by the runway and time horizon you have.

It seems Sri Lanka went all in on one crop without a hedge, and it would infeasibly take years to convert.

Same deal in Norway where I live. We maintain an agricultural sector in a rocky subarctic climate at exorbitant prices which probably makes Japanese agriculture look like a bargain.

We have had enough bad experiences in the past however to give up having some level of self-sufficiency.

If you ever wondered why nearly every European country is in the EU, except Norway well there you got part of it he reason.

> If you ever wondered why nearly every European country is in the EU

There are many others, to be fair: Iceland, Switzerland, most of the Balkans, parts of Eastern Europe, the UK, and at least 5 microstates.

Sorry, from your comment I did not understand why Norway is not part of the EU. Would you mind clarifying?

Are you saying EU membership could affect Norway's agriculture?

The common agricultural policy is a clusterfuck.

Well, not from producing copious quantities of tea. Globalization meant they (thought they) could specialize in growing tea and let someone else specialize in growing food. In theory - everyone wins.

In theory yes, but in practise, you cannot completely 100% specialize without taking on an asymmetric risk (that of the outside party not selling you food due to their own or some other crisis).

The risk is asymmetric because your specialty (tea) isn't an absolute necessity (may be 'cept to the brits), and yet, you _need_ food (an absolute necessity).

Sri Lanka was self-sufficient in rice as recently as a few years ago. Banning fertiliser cut yields by 35%.

https://www.canr.msu.edu/prci/publications/Policy-Research-N...

> Has Sri Lanka’s fish been pillaged

The fishermen can no longer afford or acquire fuel for their boats to go out and catch the fish. Due to the non fish related economic disaster outlined in the article.

They need fuel because they need boats that go far. They need to go far because the supply of fish has decreased.

Fishing is not a modern activity. Rafts existed long before people rode horses.

And in some very poor locations people do fish by sail and rowing, but even in some of the lowest income countries on earth, using small petrol engines is increasingly common (source: buying local seafood in Sierra Leone some years back).

> using small petrol engines is increasingly common (source: buying local seafood

Right, because the locals have changed from fishing for themselves to fishing for others. This is market economy dynamics of engaging in activity that produces the most money.

At least where I was buying fish it was all for domestic consumption in the Freetown metro area. Very little or none of it was being caught to be frozen or canned.

You also don’t need fuel to go to work, commuting is a modern activity. With COVID and the increase in fuel prices, we should /all/ work from home and let civilisation crumble.

>How did these island nations sustain themselves before ? In other words, what has changed that they can’t live off the land anymore? And by that, I mean the sea.

Well the chemical fertilizer ban means no living off the land. ~85% of the farms are expected to fail or have failed.

>Has Sri Lanka’s fish been pillaged? Is it being exported to wealthier nations that command higher prices, even as there is a domestic food crisis?

No, they have tremendous inflation(54.6%) and therefore fishermen cant afford fuel to go get those fish. Major fuel shortages means no eating food in sri lanka.

https://www.scmp.com/news/asia/south-asia/article/3172540/pl...

>How much of this is because of globalism and developing hard dependencies? I’ve traveled to all 47 of Japan’s prefectures and I still see bountiful agriculture in the countryside. Even as developed and wealthy as Japan is, with many global dependencies in imports/exports, it is still heavily invested in agriculture.

It's not dependencies persay but rather yes globalists are entirely at fault. This is the work of Davos/WEF.

https://www.sundaytimes.lk/180902/news/pm-this-is-how-i-will...

This used to be an article on WEF but they deleted it because obviously WEF is responsible for what is happening in Sri Lanka 100%.

The funny thing about the WEF conspiracies or for that matter the sri lanka politicians didnt see the trap they were falling into. Personally I dont believe WEF has done anything, they just convince stupid politicians to do stupid things.

Sri Lanka believed and even achieved an ESG score of over 95, beating most countries.

Before globalized trade, nations sustained themselves in ways we today see as extreme poverty.

Most countries are simply not meant to have as many people as they do. Its an aberration of history brought about by easy and cheap accessibility to fertilizers, genetically modified crops, and cheap oceanic transport.

The true cost of feeding the world is much higher once you take away the subsidies and security architecture that makes all of the above possible.

> How did these islandnations sustain themselves before ?

They didn't. At least by today's standards. The poorest parts of the world have become immensely richer over the past 50 years. In the 80s it was still common to have famines that could wipe out millions in a small area.

Despite a massive population growth in the world's poorest areas, such famines basically don't exist anymore.

not 100% sure.. my guess is that they depended upon tourism and it was severely impacted by the pandemic.

For Sri Lanka, the right thing to have been done (in hindsight) is to keep the country open for tourism and disregard covid impact. Kind of like Texas/Florida.

They had to choose between the lesser of the two evils. This is a hard decision to make.

> the right thing to have been done (in hindsight) is to keep the country open for tourism and disregard covid impact.

but even if they did, would tourists still be arriving? I suppose if the leaders thought that the human toll is worth keeping the economy alive - but then again, they wouldn't have mandated "organic" farming if they could come to that conclusion.

And in any case, the inflation and war in ukraine raising fuel prices would not have been helped by tourism imho. A double whammy isn't easy to recover or prevent tbh.

Their healthcare system would not have coped - as things were, it was pretty much at breaking point.

Also, the rest of the world had curbs on travel, which would have made it non viable anyway.

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