CIA chief says Sri Lanka’s ‘dumb bets’ on China contributed to economic collapse

CIA chief Bill Burns on Wednesday blamed “dumb bets” on high-debt Chinese investment as a factor in Sri Lanka’s economic collapse, saying it should serve as a warning to other nations.

“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.

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.”

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“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.”

China has invested heavily in Sri Lanka - strategically located in the Indian Ocean and off India, often seen as a rival of Beijing-- 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.

Sri Lanka has borrowed heavily from China for infrastructure projects, some of which ended up as white elephants.

In 2017, Sri Lanka was unable to repay a $1.4 billion loan for a 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 for China, that was so sparingly used that at one point it was unable to cover its electricity bill.

US Secretary of State Antony Blinken has also publicly blamed Russia’s blockade of Ukrainian grain as a contributing factor in Sri Lanka’s crisis, noting the sharply rising prices of food.

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