Sources add that hundreds of Chinese managerial level skilled personnel are expected to manage the industrial zone while providing 500,000 job opportunities for the youth in the south.
China Merchants Holdings (International) Company Ltd has secured this deal recently. This is the same shipping company that expanded and is now running Colombo’s South Container Terminal
The Chinese government has agreed to set up three Vocational training centers in Hambantota Monaragala and Puttalam areas to train Sri Lankan youths to fit in to the jobs at China –led industrial zone in Hambantota.
This assurance was given by Chinese assistant state minister for internal affairs Dou Enyong when he held talks with State Minister Palitha Range Bandara during his recent tour of China.
The construction work of these three China Tech centres will begin next year after obtaining the cabinet approval, Skills Development and Vocational Training State Minister Range Bandara said adding that Chinese investors are expected to build 2500 factories making massive investments.
Economists say that these deals will never solve the country’s debt problem as the money getting from Chinese companies will not be used off set the massive loans taken from that country.
They noted that if the Government debt is around 100% of GDP, then an economy is in trouble. Sri Lankan debt is close to 89% of GDP. Moreover, it cannot print its own currency too for clearing the debt.
Around $35 billion of the debt is serviceable because it carries low interest rates, most probably being forwarded by multilateral institutions like the World Bank.The $8 billion Chinese debt is a high cost debt. It carries an interest rate of about 8-9%. Therefore, China is arm twisting Sri Lanka to either clear the debt or ‘defer’ (not cancel) the debt through strategic favours.