The debt trap strategy


“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” – 2nd US President John Adams, 1826

 

WITH the recent onslaught of the Covid-19 pandemic and economic hardship over the once wealthy and thriving Indian Ocean island, Sri Lanka is a tell-tale sign of emerging global debt trap set by wealthier nations.

Be it corruption or pure greed, certain despotic leaders around the world have fallen into the debt trap by rigging elections to remain in power perpetually via vote-buying with the use of ill-gotten money.

Some big-economy nations grab this once-in-a-lifetime opportunity by offering enormous amount of unsecured loans in return of getting vital access to their debtor countries.

This is what happened to Sri Lanka and is happening in our country as well.

If we keep on borrowing and investing heavily on white elephant infrastructure projects, we may be another Sri Lanka in the making.

The port of Hambantota became a collateral damage for the government of Sri Lanka and was taken control by the Chinese government.

Several projects in Malaysia are mired in controversies as well and have been on the radar of the Malaysian Anti-Corruption Commission, although none of the culprits have been sent to prison to date.

Huge national debts that are a curse to future generations have ballooned thanks to our short-sighted leaders who can’t see the forest for the trees!

On the other hand, if we are unable to service the loans plus interest – we are indebted to the country that gave the huge loans.

Our sovereign nation will be pawned to the power that be – our new master. We will need to listen to their command as slaves and soon our nation will spiral into economic hardship while the elitists will abandon the mothership with their loot.

Ordinary Malaysians will succumb to poverty and untold hardship to make ends meet.

Some will resort to suicide like we read in the media while the luckier ones will seek greener pastures overseas.

The geopolitical and socio-economic goalpost will be moved forever by the creditors to their advantage.

The grim scenario mentioned above may sound like in some war-torn countries such as Afghanistan or Ukraine, but slowly it will be our fate if we are not careful enough to see the oncoming train at the end of the tunnel.

When people are in dire need of food, gas and basic amenities, there will be upheavals and chaos as it is happening in Sri Lanka now.

Already some economists are saying that a huge cloud of uncertainties in food security is hanging over our nation if not the whole world.

Prices of essential goods have spiralled and we are going to raise the minimum wage. Will it work?

Time will tell as the root cause of the problem is not addressed yet! – March 24, 2022.

* Vijay Shanmugam reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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Comments


  • ".....by rigging elections to remain in power perpetually via vote-buying with the use of ill-gotten money....."

    ==> 1MDB? ... A royal suggested EC members be selected by the Council of Rulers to ensure transparency and regain trust in the electoral process. Good idea.

    " .... If we keep on borrowing and investing heavily on white elephant infrastructure projects ... if we are unable to service the loans plus interest ......."

    ==> ECRL? Just wait and see how it will turn out ... IMO, it won't be good.

    If the US 10 year T-Note reaches 4.0+, the ringgit will be ....... @#$%

    Posted 2 years ago by Malaysian First · Reply

  • Malaysian First,

    Good analysis..they have steadfastly ignored the Elephant in the room - the ever-growing debt burden with their shiok sendiri projects..

    Posted 2 years ago by Vijay Shanmugam · Reply