“Chinese Investment and the BRI in Sri Lanka”, 24 March 2020

China’s Belt and Road Initiative (BRI) is having profound impacts on recipient countries. This paper examines the benefits and costs of the BRI and its projects to Sri Lanka and the lessons that may improve future BRI projects in Sri Lanka and elsewhere.

Summary

• … Specific projects have contributed positively to Sri Lanka’s economy. Some have brought greater benefits than others, such as the Colombo International Container Terminal (CICT), which has allowed the Colombo port to grow at a rapid pace… In addition, there have been only limited economic spillovers for Sri Lanka, including knowledge transfer in the local labour force.
• The number of Chinese workers in Sri Lanka is rising but remains a very small percentage of the total labour force…
• The environmental implications of Chinese investment projects in Sri Lanka are mixed. While earlier projects were more harmful, recent projects such as the CICT and Port City in Colombo have adapted to stricter environmental standards. To ensure consistently high environmental standards, Sri Lanka should strengthen its domestic regulations and seek more investments from green-friendly partners…