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21st July 2022

TABLE OF CONTENTS
Ukraine war forcing China to rethink ‘how and when’ it may invade Taiwan, CIA chief says --- 2
Sri Lanka braced for more unrest as new president vows crackdown on ‘fascist’ protests --------3
Ranil Wickremesinghe: wily fox who is Sri Lanka’s new president ---------------------------------------- 6
Italy’s Mario Draghi expected to resign as prime minister ---------------------------------------------------- 8
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Ukraine war forcing China to rethink

‘how and when’ it may invade Taiwan,
CIA chief says
Bill Burns says China ‘unsettled’ by Russia’s war in Ukraine and it
may influence decisions on the possible use of force against Taiwan

Russia’s experience in Ukraine is affecting China’s calculations on how and when it may
decide to invade Taiwan, the head of the CIA said on Wednesday.

Appearing at the Aspen Security Forum, Central Intelligence Agency director Bill Burns
played down speculation that Chinese president Xi Jinping could move on Taiwan after
a key Communist party meeting later this year.

“The risks of that become higher, it seems to us, the further into this decade that you
get,” Burns said, adding: “I wouldn’t underestimate President Xi’s determination to
assert China’s control” over self-ruling Taiwan.

Burns said that China was “unsettled” when looking at Russia’s five-month-old war in
Ukraine, which he characterised as a “strategic failure” for president Vladimir Putin as
he had hoped to topple the Kyiv government within a week.

“Our sense is that it probably affects less the question of whether the Chinese leadership
might choose some years down the road to use force to control Taiwan, but how and
when they would do it,” Burns said.

He said that China is believed to have observed from Ukraine that “you don’t achieve
quick, decisive victories with underwhelming force.”

“I suspect the lesson that the Chinese leadership and military are drawing is that you’ve
got to amass overwhelming force if you’re going to contemplate that in the future,” he
said.

China also has likely learned that it has to “control the information space” and “do
everything you can to shore up your economy against the potential for sanctions,” he
added.

Burns, in line with previous US assessments, said that the United States does not believe
that Beijing is offering military support to Russia despite rhetorical backing.
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He said China has stepped up purchases of Russian energy but appears careful about
not incurring western sanctions.

China considers self-ruled Taiwan part of its territory awaiting reunification, by force if
necessary.

China’s defeated nationalists fled to Taiwan in 1949 after losing the mainland’s civil war,
but the island has since developed into a vibrant democracy and leading technological
power.

Speaking before Burns at the forum in the Rocky Mountains, China’s ambassador to the
United States, Qin Gang, said that Beijing still preferred “peaceful reunification”.

But he accused the US of supporting “independence” forces in Taiwan, where president

Tsai Ing-wen has asserted the island’s separate identity.

“No conflict and no war is the biggest consensus between China and the United States,”
Qin said. But the United States is “hollowing out and blurring” its stated policy of
recognising only Beijing, he said.

“Only by adhering strictly to the one-China policy, only by joining hands to constrain
and oppose Taiwan independence, can we have a peaceful reunification,” he said.

Under a law passed by Congress when Washington switched recognition from Taipei to
Beijing in 1979, the US is required to provide weapons to Taiwan for its self-defence.

US president Joe Biden said in May that the US was ready to use force to defend
Taiwan from a Chinese attack, appearing to shed the long-held US ambiguity on
whether it would engage militarily, although the White House quickly walked his
comments back.

Biden told reporters on Wednesday that he expected to speak to Xi “within the next 10
days”.

Sri Lanka braced for more unrest as

new president vows crackdown on
‘fascist’ protests
Popular opposition to Ranil Wickremesinghe’s election by MPs
could spill over into violence as he picks an old schoolmate as PM

Sri Lanka was braced for more unrest after newly appointed president, Ranil
Wickremesinghe, vowed to crack down on the protests that toppled his predecessor,
condemning them as “against the law”.
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Speaking after being MPs picked him as successor to Gotabaya Rajapaksa,

Wickremesinghe made it clear he would not tolerate those he perceived to be stirring up
violence.

“If you try to topple the government, occupy the president’s office and the prime
minister’s office, that is not democracy; it is against the law,” he said.

“We will deal with them firmly according to the law. We will not allow a minority of
protesters to suppress the aspirations of the silent majority clamouring for a change in
the political system.”

Wickremesinghe was sworn in as the eighth president of Sri Lanka at a small ceremony
in parliament on Thursday morning. He is expected to name the leader of the
parliament and old schoolmate Dinesh Gunawardena as prime minister. Gunawardena
is known as a strong Rajapaksa loyalist, and served as a cabinet minister when Mahinda
Rajapaksa was president, and then again when Gotabaya Rajapaksa was president.

In recent days, Wickremesinghe, who declared a state of emergency this week, had made
statements calling protesters “fascists” and indicating he would not be afraid to crack
down on the demonstrations.

Less than an hour after he was declared president on Wednesday, a court order was
issued prohibiting anyone from congregating within a 50-metre radius of a statue that
stands at Galle Face in Colombo, where protesters spurred by the country’s economic
collapse have been camped out for months.

However, people defied the order and dozens gathered on the steps of the president’s
offices, which are still occupied by the protest movement, to shout rallying cries of “deal
Ranil” – a reference to Wickremesinghe’s reputation as a scheming politician – as well
as “Ranil bank robber”, referring to a bank bond scam he was implicated in. Hundreds
of police and military stood on the periphery but did not interfere in the rally.

After being selected by MPs as president, Wickremesinghe called on the opposition

parties for an “end to division” and said he wanted to “bring everyone together so that a
national consensus is formed as to the way forward”.

But questions remain over whether Wickremesinghe would be able to put together a
cross-party unity government acceptable to the people, after the major opposition
parties had pledged their support for the presidential candidate he defeated.

Wickremesinghe has been prime minister six times and is close to the Rajapaksa family.
Protesters fear that he will protect the Rajapaksas from being held accountable, as he
has been accused of doing in the past, and would not instigate the constitutional change
being demanded by the protest movement, including an end to the system of executive
presidency.
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Wickremesinghe is due to serve for the rest of Rajapaksa’s term, until November 2024.

“Ranil will be chased away, he is a crook and he doesn’t have a mandate,” said Anura
Goonaratna, 53, a toy exporter. “This protest movement is going to get worse. There has
to be an end to this and the only ending we will accept is throwing Ranil out, whatever it
takes.”

With recriminations swirling in Sri Lanka about the country’s implosion, the head of the
CIA weighed into the debate on Wednesday by blaming “dumb bets” on high-debt
Chinese investment.

Speaking at the Aspen security forum in Colorado, America’s spy chief Bill 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.”
China has invested heavily in Sri Lanka – strategically located in the Indian
Ocean and off India, often seen as a rival of Beijing – and worked closely with
former president Rajapaksa.
However, analysts have disputed the China debt-trap narrative in Sri Lanka.
China only accounts for 10% of Sri Lanka’s debts, most of which were
concessionary loans and the repayments only accounted for less than 5% of
the country’s annual foreign debt servicing.
A much greater drain on the country’s foreign exchange reserves were
international sovereign bonds, much of which are from the US, which were
borrowed by the country at high interest rates. It was these bond repayments
– which were due to total over $1.5bn in 2022 – that drained Sri Lanka’s
reserves and ultimately forced them to default in May, as the country was
virtually bankrupt.
Rajapaksa fled the country and resigned last week in the face of mass protests
over dire economic conditions, with the island nearly exhausting its supply of
food and fuel as it no longer has foreign currency to pay for crucial imports.
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Ranil Wickremesinghe: wily fox who

is Sri Lanka’s new president
Profile: Six-time PM may be unacceptable to many of the same
protesters who forced out predecessor

There are few who have been stalwarts of Sri Lankan politics in the last half-century
quite like the man often referred to as “the fox”.

Ranil Wickremesinghe, 73, who gained his nickname for his apparently wily ability to
repeatedly resurrect his political career, has been prime minister six times since he first
entered politics in 1977, though he has famously never completed a term.

He had also made several failed bids at the presidency. But finally, on Wednesday, after claiming victory
in the parliamentary secret ballot, Wickremesinghe achieved what had appeared to be a lifelong political
ambition: he took executive office, replacing the ousted president Gotabaya Rajapaksa.

A lawyer by profession, his first ascension to the role of PM came in 1993 after the
assassination of the then president Ranasinghe Premadasa. But, in what would become
a running theme during his career, his term did not last long.

Over his various terms in office, both as prime minister and opposition leader,
Wickremesinghe became known for being economically capable and a pro-western
reformer, particularly for his role steering the country out of a recession in 2001, and he
had a strong voter base among the urban middle classes.

Yet despite his insistence that he was a “clean” politician, he was not untouched by
corruption allegations, and was accused in being involved in an insider trading scam at
the central bank. He always maintained his innocence.

After he became prime minister in 2015, Wickremesinghe was also accused of protecting
the Rajapaksa family – who were political opponents but with whom he had close
personal ties for years– from facing prosecution over alleged corruption and human
rights abuses. While investigations were initiated against the family, they were stalled
and ultimately came to nothing.

By the time Wickremesinghe had resigned as prime minister in 2019, there was mass
public disenchantment with him, while his party, the once dominant United National
Party (UNP) had fractured after a group of MPs broke away and formed a new
opposition. He barely gained any votes in the 2020 parliamentary elections and he had
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to enter parliament as an MP through a list system for his party, the sole parliamentary
representative for his once powerful UNP.

But it was in May this year that Wickremesinghe was brought back in from political
near-obsolescence to be Sri Lanka’s caretaker president, as the country grappled
through its worst economic crisis since independence.

He took on the post at the special request of embattled president and longtime friend
Rajapaksa, who was facing an ongoing political crisis including mass protests
demanding he resign.

In the space of just a few weeks, Rajapaksa had been forced to dissolve his cabinet twice
and after his older brother Mahinda, who was prime minister, resigned, the president
was desperately looking for a replacement after opposition leaders rejected the post.

Wickremesinghe was pitched to the public as a capable, experienced pair of hands, who
could help the country navigate this severe financial crisis and negotiate with
international organisations including the International Monetary Fund. But among
protesters who had been calling for president Rajapaksa to go, Wickremesinghe’s
decision to accept the role was seen as a betrayal of the people’s movement, and he was
instead accused of propping up and protecting the Rajapaksa family as he had done for
decades.

As resentment towards president Rajapaksa grew over recent weeks, anger began to be
directed at Wickremesinghe too. Calls began to mount for him to resign, and on the
night of 9 July when protesters stormed the presidential palace and offices, the prime
minister’s official residence was also occupied and Wickremesinghe’s private home
burned to the ground. On 13 July, just as president Rajapaksa was due to step down,
protesters then occupied Wickremesinghe’s official offices to make clear they also
wanted him out.

Since president Rajapaksa stepped down on Friday, the rallying cry of protesters has
turned to “Ranil go home” after he temporarily took over the role . Ahead of the
presidential ballot, anti-Wickremesinghe demonstrations led by students and protest
groups filled the streets and as news of his victory broke, many erupted in anger.

Yet many fear there will be further unrest on the streets now he has been chosen as Sri
Lanka’s next president, particularly as he had appeared to pledge to crack down on the
protesters, who he has referred to as “fascists” and “extremists”.

“Ranil Wickremesinghe should also step down because he came in defence of this
corrupt system and he has failed five times before as prime minister,” said Father
Jeevantha Peiris, a Catholic priest who has been a protest leader. “As citizens we don’t
accept him, we don’t need another corrupt leader.”
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Italy’s Mario Draghi expected to

resign as prime minister
Former European Central Bank chief had failed to secure support
from coalition partners in confidence vote

Italy’s prime minister, Mario Draghi, is expected to confirm his resignation after three
key parties in his broad coalition did not participate in a confidence vote on the
conditions he set for his government continuing.

The former European Central Bank chief told the senate earlier on Wednesday that the
survival of his unity administration hinged on “rebuilding the pact of trust” and spirit of
cooperation of its early months, and asked for a vote on this basis.

Draghi offered his resignation last week after the Five Star Movement (M5S), a key
component of his broad coalition, snubbed a vote on a €26bn cost of living package.

His resignation was rejected by the president, Sergio Mattarella, who asked him to
address parliament in an attempt to avert what would be the collapse of Italy’s third
government in three years.

The move instead widened the rifts between the squabbling parties, with Matteo
Salvini’s far-right League and Silvio Berlusconi’s Forza Italia demanding a new Draghi
government without M5S.

Draghi has said several times that he would not lead a government without M5S, but
would also not accept ultimatums.

As tensions mounted throughout the day, the League and Forza Italia said they were
“surprised” when Draghi announced his government’s fate would be determined with a
confidence vote on a resolution requested by centrist senator, Pier Ferdinando Casini,
that called for the approval of Draghi’s conditions.

Both parties said they would not be present for the vote. M5S then followed suit. “Over
the past 18 months all of our measures have been dismantled,” M5S senator Mariolina
Castellone said. “Let’s remove the inconvenience.”

The vote passed in the senate on Wednesday evening but even though Draghi still has a
majority, he will likely confirm his resignation.

“I think it’s over,” said Wolfango Piccoli, co-president of the London-based research
company, Teneo. Draghi will address the lower house of parliament on Thursday
morning, where he is expected to announce his resignation as an act of respect towards
parliament, before going to Mattarella. Piccoli said: “Barring a miracle, that’s the
outcome.”
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He added: “It’s not a question of a majority at this point because he always had the
majority – the question here is about the politics, meaning there was no movement from
the political parties to meet his conditions to create a new sense of trust, so what we’ve
seen is three parties turning their backs on him.

“All the speeches by the League, M5S and Forza Italia today were pre-election speeches.”

Draghi’s potential resignation would come despite a groundswell of public support for
him to remain in the post. There have been declarations from more than 1,500 mayors
from across the political spectrum and various labour unions, a signal of public support
Draghi said was “unprecedented and impossible to ignore”.

He had also urged unity so that the government could face key challenges, such as the
war in Ukraine, the energy crisis, social inequality and the enactment of reforms needed
to obtain the next tranche of the €200bn Italy is due to receive from the EU’s post-
pandemic recovery fund. He also rebuked his coalition partners for infighting and point-
scoring over recent months.

If Draghi confirms his resignation then Mattarella could ask him to stay on as interim
prime minister. However, analysts say that Mattarella would most probably dissolve
parliament and call elections for as early as the end of September.

A report this week on recent surveys said that in the event of early elections, a coalition
led by the far-right Brothers of Italy and including the League and Forza Italia could
easily secure a majority.