CIA chief William Burns has blamed “dumb bets” on high-debt Chinese investment as a factor in Sri Lanka’s economic collapse, and said it should serve as a warning to other nations, reports TRT World..
“The Chinese have a lot of weight to throw around and they can make a very appealing case for their investments,” Burns said at the Aspen Security Forum on Wednesday.
But nations should look at “a place like Sri Lanka today –– heavily indebted to China –– which has made some really dumb bets about their economic future and are suffering pretty catastrophic, both economic and political, consequences as a result.
“That, I think, ought to be an object lesson to a lot of other players –– not just in the Middle East or South Asia, but around the world –– about having your eyes wide open about those kinds of dealings,” the report quotes Burns as saying
Drowning in debts
China has invested heavily in Sri Lanka and worked closely with former president Gotabaya Rajapaksa.
Rajapaksa fled the country and resigned last week in the face of mass protests over dire economic conditions, with the island nearly exhausting its supply of food and fuel. He has found temporary shelter in Singapore.
Sri Lanka has borrowed from China, India and Japan. Some of its infrastructure projects have ended up as white elephants.
In 2017, Sri Lanka was unable to repay a $1.4 billion loan for port construction in the south of the country and was forced to lease out the facility to a Chinese company for 99 years.
Near the port is the Rajapaksa Airport, built with a $200 million loan from China, that was so sparingly used that at one point it was unable to cover its electricity bill.
Ukrainian war contributed to aggravating Sri Lanka’s crisis.