The island of 22 million people has borrowed heavily to make up for years of budget and trade deficits.

For months, the population has suffered serious shortages of food, fuel and medicine and has for weeks blamed President Gotabaya Rajapaksa for having thrown the country into this historic crisis.

On Monday, clashes between Rajapaksa supporters and anti-government protesters left five people dead and more than 225 injured and led Mahinda Rajapaska to resign as prime minister.

When the latter was president (2005-2015), the region of Hambantota, ancestral stronghold of the clan, benefited from a flood of investments intended for major infrastructure projects, tainted by suspicions of corruption.

For the construction of Mattala Rajapaksa International Airport, the country borrowed 200 million dollars from China, but the terminal is so little used that its revenue was once insufficient to cover its electricity bill.

View of a museum built in memory of the parents of the Rajapaksa brothers, in the cradle of the clan in Hambantota in Sri Lanka on April 24, 2022 Ishara S. KODIKARA AFP

But in 2017, Colombo found itself unable to service its $1.4 billion debt contracted with Beijing for the construction of the deep-water port of Hambantota.

"We had a lot of hope when the plans were announced. And this area was better off for it," recalls Dinuka, a villager in the area, "but now it means nothing. Our children too will continue to pay this debt".

Located on the world's busiest east-west sea route, it was supposed to boost industrial activity but lost $300 million in six years.

Sri Lanka was forced to cede it for 99 years to a Chinese company.

The government has heavily indebted the country to China to develop these projects, causing concern among Westerners and Indians.

The opposition accused him of having squandered these loans.

"Debted up to your neck"

"Decades of fiscal profligacy and weak governance ... have gotten us into deep trouble," Murtaza Jafferjee, president of Sri Lanka's Advocata Institute think tank, told AFP.

Overlooking the port, a conference center that cost 15.5 million dollars loaned by China, hosts only dust since its opening.

For many Sri Lankans, these projects symbolize their disastrous management.

“We are in debt up to our necks,” recalls Krishantha Kulatunga, owner of a small paper mill in Colombo.

View of the Nelum Pokuna Mahinda Rajapaksa theater, built with the help of China, on May 5, 2022 in Colombo Ishara S. KODIKARA AFP

His business is near a glass skyscraper in the shape of a lotus flower.

The "Lotus Tower", financed by Chinese funds, dominates the capital, but has never opened to the public.

“How can we feel proud of this tower when we are left begging to eat?” asks the shopkeeper.

"China has done its best"

China, the government's main bilateral lender, holds at least 10% of its external debt valued at $51 billion.

Analysts estimate it to be significantly higher, given loans to state-owned enterprises and the Central Bank of Sri Lanka.

The government sought to renegotiate its schedule with China, which preferred to offer more bilateral loans to repay existing borrowings.

But the proposal faltered when Sri Lanka turned to the International Monetary Fund (IMF) last month, much to the chagrin of Beijing, which is likely to suffer a haircut on its loans, like other creditors.

View of the Lotus Tower, financed by Chinese funds, in Colombo on May 5, 2022 Ishara S. KODIKARA AFP

"China tried its best to help Sri Lanka avoid default but unfortunately the country went to the IMF and chose default" on April 12, Chinese Ambassador Qi Zhenhong said in Colombo. last month.

Qi said the move would affect Beijing's willingness to help Sri Lanka financially in the future.

The restructuring of Sri Lanka's debt, demanded by the IMF before any bailout, will "certainly have an impact on future bilateral loans", he warned.

© 2022 AFP