Wednesday, the head of the US spy agency blamed “dumb bets” on high-debt Chinese investments for Sri Lanka’s economic collapse, which led to a political crisis there. Bill Burns, the head of the CIA, talked about the mistake at the Aspen Security Forum. He said that other countries should learn from it.
Burns said, “The Chinese have a lot of power, and they can make a strong case for their investments.”
He also said that countries should look at “a place like Sri Lanka today, which is heavily in debt to China and has made some really stupid bets about its economic future and is now suffering pretty catastrophic economic and political consequences as a result.”
“I think that should teach a lot of other people, not just in the Middle East or South Asia but all over the world, to keep their eyes open when making deals like that,” he said.
China has put a lot of money into Sri Lanka, which has a hard time getting money and has almost run out of food and fuel. Beijing worked closely with the former president of Sri Lanka, Gotabaya Rajapaksa, and set up a “dragon debt trap” for Colombo.
Was China a swindler when it came to Hambantota Port? Sri Lanka was short on money.
Sri Lanka was unable to pay back a $1.4 billion loan it took out to build the Hambantota port in 2017. Instead, it had to rent the port to a Chinese company for 99 years. China Harbor Engineering Company (CHEC) and the Sino Hydro Corporation worked together on the building project.
Sri Lanka is strategically located in the Indian Ocean. India, which is a rival of China, has kept giving Sri Lanka money, and the leader of the country’s opposition recently asked India to keep helping Sri Lanka and its people “get out of this disaster.”
Rajapaksa, on the other hand, left the country last week after it was thrown into chaos and resigned because the economy was so bad.
Ranil Wickremesinghe, who has been the Prime Minister of Sri Lanka six times, was chosen to be the next President on Wednesday. But Wickremesinghe is seen as part of the ruling class, and many ordinary Sri Lankans didn’t want him to run.
Protesters against the government who forced Rajapaksa to leave the country and step down also wanted Ranil Wickremesinghe to step down. This means that Sri Lanka’s political crisis, which started because of an economic crisis, could get worse.