With Sri Lanka slipping lower and lower into the chasm of economic decline, the CIA chief said that the island nation made really “dumb bets about their economic future” with heavy Chinese investment.
He said, reported The Guardian: “The Chinese have a lot of weight to throw around and they can make a very appealing case for their investments. 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.”
During former president Gotabaya’s brother Mahinda’s regime, China started investing heavily in infrastructure projects in the island nation as Lanka faced international isolation at the tail end of the civil war. Critics say it was due to Mahinda that the country has fallen into the “Chinese debt trap”.
The Hambantota port, which was funded by a Chinese loan during Mahinda’s regime, was leased to Beijing in a 99-year debt-for-equity swap in 2017 after the country failed to pay off the debt.
Sri Lanka has historically been an important commercial hub along maritime routes due to its strategic position in the Indian Ocean, where China is increasingly making its inroads.
The economic crisis also sparked a political crisis in the country after a popular uprising against the government. The island nation needs about $5 billion in the next six months to cover basic necessities for its 22 million people, who have been struggling with long queues, worsening shortages and power cuts.