As Sri Lanka heads into its presidential election on Saturday, candidates are counting on Chinese-backed mega-projects to help revive the nation’s struggling economy, despite such ventures being partly blamed for the country’s worst financial collapse.

The strategically important Indian Ocean island endured a severe financial meltdown in 2022, leaving it unable to import essential goods due to a lack of foreign currency reserves. This triggered mass protests, leading to the ousting of then-president Gotabaya Rajapaksa.

In the aftermath of Sri Lanka’s economic chaos, CIA Director Bill Burns pointed to the nation’s heavy reliance on Chinese-funded infrastructure projects, many of which have struggled to deliver returns.

Among these high-profile failures are an international airport with no commercial flights, an underused seaport, an empty convention center, and a $113 million communication tower that remains largely unused by broadcasters.

These projects, seen as part of Beijing’s Belt and Road Initiative (BRI), left Sri Lanka saddled with enormous debt, contributing to its financial crisis.

The island nation has since secured a $2.9 billion loan from the International Monetary Fund (IMF) to help stabilize its economy, but the financial challenges remain steep. Sri Lanka defaulted on its $46 billion external debt last year, accumulating significant loans and interest payments.

Despite this backdrop, the leading presidential candidates – incumbent President Ranil Wickremesinghe, opposition leader Sajith Premadasa, and Marxist leader Anura Kumara Dissanayaka – are optimistic about the potential of one particular Chinese-funded project: the Port City development in Colombo. They hope the ambitious real estate venture will attract much-needed foreign investment to help rebuild the country’s economy.

The Port City project, which involves transforming reclaimed land into a financial hub with luxury residences, commercial spaces, and business zones, is expected to boost Sri Lanka’s appeal to international investors. Located on a prime stretch of the island’s coastline, the development is envisioned as a key driver of economic growth.

Critics argue that many of these ventures were poorly conceived and lacked the financial sustainability necessary to generate long-term benefits. The new government will have to manage significant debt repayments while attempting to turn Port City into a success story.