Jul 21, 2022

CIA chief blames 'dumb bets' on China for SL economic woes Featured

In a warning to other nations amid economic crisis in Sri Lanka, the US Central Intelligence Agency Director William J. Burns has blamed “dumb bets” on high-debt Chinese investment by the island nation as a reason for the collapse of its economy.

Speaking at the Aspen security forum in Colorado, Burns said: “The Chinese have a lot of weight to throw around and they can make a very appealing case for their investments.”

But he said 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.”

Although China has invested heavily in Sri Lanka, analysts have disputed the China debt-trap narrative in Sri Lanka. 

China debts, only 10% of total debt

The alleged "debt trap" is a deliberate fabrication, according to Bernard Goonetilleke, chairman of the Pathfinder Foundation, a Sri Lankan think tank.

Speaking recently to 'China Daily' last week, Goonetilleke, who is also a former Sri Lankan ambassador to China, has said that Sri Lanka's debt to China represents around 10 percent of its total external debt.

"One has to examine carefully to determine which other countries and financial institutions have provided the remainder,'' he has further noted.

He has further said the country's problems stem from "Sri Lanka living beyond its means, by bridging budget deficits by external loans over the past two decades, for which interested parties try to make China the scapegoat".

(Excerpts : The Guardian UK / China Daily)

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