Sri Lanka Suffering For ‘Dumb Bets’ Made On High-Debt Chinese Investment: CIA Chief Bill Burns

China has invested heavily in Sri Lanka and worked closely with former president Gotabaya Rajapaksa, but most projects for which Sri Lanka has borrowed heavily ended up as white elephants

Sri Lanka economic crisis ( Image Source :Getty )

In a warning to other nations amid economic crisis in Sri Lanka, the US Central Intelligence Agency chief Bill Burns on Wednesday blamed "dumb bets" on high-debt Chinese investment by the island nation as a reason for the collapse of its economy. "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, reported news agency AFP.

Noting that other nations should keep a watch on such economic decisions, Burn said, "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 and worked closely with former president Gotabaya Rajapaksa. One of the major reasons of the investment is the island’s strategic location along the Indian Ocean, and India which is often seen as a rival of Beijing.

Rajapaksa fled the country and later resigned after massive protests and resentment flared over dire economic conditions as the island nearly exhausted its supply of food and fuel.

Ranil Wickremesinghe, who had been serving as acting President was elected as new Sri Lanka President on Wednesday. 

What are major Chinese investments in the island nation?

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

In 2017, Sri Lanka failed to repay a $1.4 billion loan for a port construction in the south of the country and ended up giving the facility to a Chinese company for 99 years on lease, reported AFP.

The Rajapaksa Airport built with a $200 million loan for China, located near the port, was so sparingly used that at one point it was unable to cover its electricity bill.

Secretary of State Antony Blinken believes that Russia's blockade of Ukrainian grain also contributed to Sri Lankan crisis that led to rise in food prices, the report added.