Sri Lanka is a country in Asia that is strategically located along major global trade routes. Sri Lanka's waters are known as the Silk Road because of their position connecting Western and Eastern countries. Recognizing this significant potential, China has established very close bilateral relations with Sri Lanka and taken advantage of this opportunity. Building close ties with China has also been a major advantage for Sri Lanka. Sri Lanka has established close cooperation with China, particularly in the economic and development sectors. China has provided substantial financial assistance for infrastructure projects such as highways, ports, railways, and airports (Department of External Resources, 2022).
One of the most talked-about infrastructure projects is the Hambantota port. The Sri Lankan government hopes that the Hambantota port will be the country's greatest asset. However, the Hambantota port continues to suffer losses, and the Sri Lankan government is forced to continue borrowing from China. This situation has contributed to the increase in Sri Lanka's debt. Sri Lanka's inability to repay its debt is linked to rising inflation in the country. Inflation in Sri Lanka has led to many negative consequences, such as rising unemployment, low economic growth, and people being unable to meet their basic needs.
The relationship between China and Sri Lanka is a strategy used by China for specific purposes. This strategy has become a new term in international relations, dubbed "China Debt Trap Diplomacy" (Nurjayanti, 2020). The bilateral relationship between the two countries has existed since Sri Lanka's independence. In the case of Sri Lanka, China acts as the central country supplying finished goods, semi-finished goods, technology, and manufacturing, while Sri Lanka acts as the supplier of raw materials. Sri Lanka's exports to China consist of agricultural products, while imports from China to Sri Lanka consist of finished goods (Putera et al., 2019).
Robert I. Rotberg states that a good government is one that can provide and fulfill political goods for its citizens. The political goods referred to by Rotberg are beneficial services that must be provided to citizens to instill a sense of security. These may include national defense, infrastructure, education, national security or human security, societal freedom, and protection against all forms of threats. (Amany, Farah, 2023)
 In the case of Sri Lanka's 2022 economic crisis, the Sri Lankan government was unable to provide political goods to its citizens. The country was in chaos due to inflation and bankruptcy in various sectors. Many public facilities had to be sacrificed. In the public transportation sector, the government reduced its fleet due to the fuel crisis. Prices of basic necessities have skyrocketed, making it extremely difficult for middle- and lower-income citizens to survive. Many families have also had to discontinue their children's education due to cost concerns. Education has become a luxury. Weerasinghe noted that student attendance had dropped by up to 40%, prompting him to ask teachers to bring additional food to encourage students to return to class (BBC News Indonesia 2023).
Hospitals are also running out of essential supplies and medications. This is a serious threat to lives. Medical staff have reported that the supply crisis has forced them to prioritize surgeries deemed more critical while neglecting less urgent procedures. Some medical staff have resorted to reusing certain equipment and rationing supplies (BBC News Indonesia 2022). Â Additionally, daily power outages lasting up to 10 hours are occurring in some areas. This is due to insufficient fuel supplies, which are causing power plants to malfunction. The situation is further exacerbated by dwindling coal stocks for coal-fired power plants (PLTU). Â In this context, Sri Lanka is unable to import fuel and coal because it lacks sufficient foreign exchange reserves to pay for these supplies (CNN Indonesia 2022).
From the perspective of Robert I. Rotberg's Failed States Theory, of the four classifications, namely strong states, fragmented states, weak states, and failed states, Sri Lanka is not yet classified as a failed state. Instead, it is classified as a weak state. Due to the narrowed dimension, namely the provision of public goods, Sri Lanka is only classified in the second point, namely failure to provide public goods.
Sri Lanka initially needed funds to build the Hambantota port, which was originally intended to boost its declining economy. However, the loan provided by China appears not to have undergone sufficient study and consideration regarding future payment options and steps. Sri Lanka's inability to address this issue is evident from the relatively high port defense funding barriers and their ability to pay interest, which puts them at risk of ending up in a serious "debt trap." Finally, China took over the Hambantota port for 99 years in 2017.
The impact of the Hambantota Port development project on Sri Lanka's economic crisis is significant. 1) Declining economic activity, such as unprofitable port projects. Although this project was expected to boost economic activity, the facts show that the revenue from the project is insufficient to cover operational costs and debt; 2) High inflation: Unprofitable port projects have caused high inflation and economic instability because the government has had to divert resources to pay off debt rather than meet the basic needs of the people; 3) Low economic growth; 4) Due to rising unemployment rates, many small and medium-sized businesses have been forced to close due to high inflation and declining economic activity. This has led to an increase in unemployment rates in the community, which is linked to poor investment decisions and poor debt management. This project demonstrates how infrastructure investments can have a significant impact if not managed properly in the context of the local economy.
References
Amany, Farah, A. (2023). Analisis Faktor Penyebab Kegagalan Pemerintah Sri Lanka Tahun 2022. Universitas Islam Indonesia, 4(1), 88--100.
