CIA chief Bill Burns on Wednesday blamed “foolish 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 countries.
But nations “should look at a place like Sri Lanka today – heavily indebted to China – which has made some really silly bets about its economic future and is suffering very disastrous consequences, both economic and political as a result.
“That, I think, should be a commodity lesson for many other players, not just in the Middle East or South Asia, but around the world – about keeping your eyes open about these types of deals.”
China has invested heavily in Sri Lanka – strategically in the Indian Ocean and away from India, which is often seen as a rival to Beijing – and has worked closely with former President Gotabaya Rajapaksa.
Rajapaksa fled the country and resigned last week in the face of massive protests over dire economic conditions, with the island nearly running out of supplies 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 to build a port in the south of the country and was forced to lease the facility to a Chinese company for 99 years.
Near the port is Rajapaksa Airport, built with a $200 million loan from China, which was so poorly used that at one time it was unable to cover its electricity bill.
Secretary of State Antony Blinken has also publicly blamed Russia’s blockade of Ukraine’s grain as a contributing factor to the Sri Lankan crisis, noting rapidly rising food prices.