Currently, the economies of many countries in the world are about to collapse. China’s debt has badly taken the economies of many countries into its clutches. In this situation, the situation can also be sad and serious as Sri Lanka. According to a Bloomberg report, the economy of many emerging markets and developing countries in the world faces a major threat. The reason for this is nothing more than the inability to pay the foreign debt of these countries. Because of this debt, Sri Lanka has suffered from economic instability. It was the first country to stop paying foreign bonds in 2022.
Sri Lanka The country’s economy is going through a period of devastation. Due to this great economic crisis, where there has been a shortage of food and drink in Sri Lanka, however, due to the protests of the population, President Gotabaya Rajapaksa has also fled his residence. Along with this, Prime Minister Ranil Wickremesinghe has also formally submitted his resignation. There are many reasons for this devastation. Its tourism sector contributed 10 per cent to Sri Lanka’s total economy, but restrictions imposed due to the Crown epidemic ruined Sri Lanka’s tourism sector. This caused a lot of damage in Sri Lanka. Second, the Sri Lankan government decided to do 100% organic farming while banning fertilizers to promote organic farming. Because of this, agricultural production in Sri Lanka was halved, so there was a great shortage of rice and sugar in Sri Lanka, among other things. Third, Sri Lanka has taken on a large debt from other countries such as India, Japan and China in the past, but did not use this loan properly. Due to the huge debt, Sri Lanka’s economy was under strong interest and pressure in the long run. Because of this, Sri Lanka’s foreign exchange reserves have dwindled and it is not able to import even the necessary things. Fourth, the Sri Lankan government had cut taxes in 2019, giving relief to the people. As a result, government revenues fell by 30 percent, causing the country’s economy to collapse. Fifth, Sri Lanka has been dominated by the Rajapaksa family for the past two decades.
The Rajapaksa family is accused of using the loan received abroad for their personal interest instead of using it for the country. In Sri Lanka, the President, the Prime Minister, the Minister of Finance, the Minister of Irrigation, the Minister of Youth and Sports all come from the Rajapaksa family. They all face allegations of corruption. The people of Sri Lanka, who are facing an economic crisis, have become aggressive. A few days ago, thousands of people protested against the residence of the president and the house of the prime minister. Bathing in the pool, taking selfies while eating, these images were seen all over the world. Ranil Wickremesinghe, who took over as prime minister in May, had said Sri Lanka’s economy was deeply indebted. At the moment, Sri Lanka is asking for help from its neighboring countries, India, China and the International Monetary Fund. Due to the inability to deal with this crisis, both Sri Lankan President Gotabaya Rajapaksa and Prime Minister Wickremesinghe have decided to resign. According to reports, on July 13 the president will resign. The state of Sri Lanka has become so bad that people do not receive bread twice. One has to queue for several hours to get fuel. The government has a debt of about $ 51 billion. Sri Lanka cannot pay its interest, let alone the principal amount. Tourism, which plays an important role in the development of the economy, has also collapsed after the 2019 terrorist attack due to security and Crown issues. The country’s currency has depreciated by 80 percent. Because of this imports have become more expensive, let alone inflation, it is already out of control.
Official figures show that food prices have risen by as much as 57 percent, with the result that the country is on the verge of bankruptcy. There is no money to buy fuel, milk, cooking gas and even toilet paper. In general, there has never been a shortage of food in Sri Lanka, but people go hungry here. The United Nations Food Program says 9 out of 10 families cannot eat two meals or are saving meals. About three million people receive emergency humanitarian aid. Doctors turn to social media to order critical medications and equipment. Not only that, the growing population of Sri Lanka is asking for a passport to go abroad in search of work. Government employees have additional days off a week for three months so they can grow cereals and vegetables on their own. According to the Indian Express report, economists say the cause of the crisis is years of mismanagement and corruption. All public anger erupted against President Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa. Later in May, when outrage did not take his name, he resigned. Things got worse for many years. In 2019, more than 260 people lost their lives in the Easter suicide bombings in churches and hotels. Currently, the economies of many countries in the world are about to collapse. China’s debt has badly taken the economies of many countries into its clutches. In this situation, the situation can also be sad and serious as Sri Lanka. According to a Bloomberg report, the economy of many emerging markets and developing countries in the world faces a major threat.
The reason for this is nothing more than the inability to pay the foreign debt of these countries. Because of this debt, Sri Lanka has been suffering from economic instability for a long time. Sri Lanka was the first country among the countries to go through the billion rupee crisis, which stopped paying its foreign bonds in 2022 this year. This decision must have been made because politicians here had to guess the fuel crisis that has been deepening with food shortages in the country. As a result, resentment towards the country’s government continually increased among the people of Sri Lanka. Faced with an invisible threat, these are the countries that have been identified in the Bloomberg report as defaulters who are unable to pay their debt. Also included in this list are many countries such as El Salvador, Ghana, Egypt, Tunisia, Kenya and Pakistan. We must take Sri Lanka’s economic development very seriously. We need to control all kinds of unproductive spending and professional management should stop the flow of money at the household level under the pretext of the common man. We need to strengthen our local and rural economy. The idea of drinking desi ghee by getting into debt can also create an economic crisis like Sri Lanka for our states. Political corruption has also played an important role in Ravana’s collapse of Sri Lanka’s economy. Not only that, because of this, any kind of defense has become difficult for Sri Lanka. A solid arrangement of political corruption and economic anomalies in our country will give us indomitable courage to deal with an economic crisis like Sri Lanka.
Dr. Varinder Bhatia
director of the university
E-mail: [email protected]