Sri Lanka is experiencing its worst economic crisis in the country’s history. On Friday night, a state of emergency was declared in response to the violent protests. There are many reasons why Sri Lanka has fallen into poverty, but the main causes of the current crisis are tax cuts and the collapse of the tourism industry. Sri Lanka’s debt management programme came to an end as a result. As of February, Sri Lanka had a debt of $ 12.55 billion, of which it must pay about 4 billion this year.
Sri Lanka’s foreign debt is dominated by international sovereign bonds, the Asian Development Bank, China, and Japan. In times of trouble, China has abandoned Sri Lanka. He is unwilling to make any concessions in the loan’s terms. On the contrary, India, with whom Sri Lanka has grown increasingly distant in recent years, has sent assistance while maintaining friendship. China’s treatment of Sri Lanka serves as a cautionary tale for other countries caught in its debt trap.
Sri Lanka has declared an emergency and imposed a 36-hour curfew.
In response to the violent protests by citizens in Sri Lanka, which is experiencing the world’s worst economic crisis, an emergency was declared on Friday night. The people’s rage, which was fueled by a lack of diesel, gasoline, electricity, and food, remained unabated. The dissolution of the cabinet and the formation of an interim government were demanded by 11 parties supporting the Rajapaksa government. A protest against the government has also been called. As a result, the President issued an order imposing a 36-hour curfew in the country from 6 p.m. Saturday to 6 a.m. Monday.
In response to calls to depose the government, President Gotabaya Rajapaksa has enacted strict laws. The army has been given carte blanche to detain people for long periods of time without charge or trial. Information about relatives’ arrests has come from a variety of sources. The government is unable to import essential items due to the crisis. For the next 13 hours, people will be without power. Thousands of people erupted in violence and arson in front of the presidential residence on Thursday night.
There were two-kilometer-long lines for gasoline.
Medicines are in short supply in Sri Lanka, food inflation is at an all-time high, and petrol lines can stretch for two kilometres. In fact, the country’s foreign exchange reserves had fallen by more than 70% to $2.36 billion in January, and are still falling. Due to a lack of foreign exchange, the majority of the country’s essential goods, medicines, gasoline, and diesel are not imported from abroad. The situation has now deteriorated to the point where a cup of tea costs 100 rupees.
Sri Lanka is going through its most difficult period since 1948.
Sri Lanka is experiencing its worst economic crisis since 1948, with no money to print paper.
After being reduced to a pauper, China turned on him.
What happened in Sri Lanka should serve as a wake-up call to other nations. Sri Lanka’s credit rating is at an all-time low. Its debt is 119 percent of GDP, with Sovereign Bonds accounting for close to 40 percent of that. China’s investment in Sri Lanka over the last two decades is one of the major causes of the country’s economic crisis. Sri Lanka owes China a large amount of money. In the years 2021-22, Colombo owed China $2 billion. China has already leased the Hambantota port for 99 years.
In December 2021, Sri Lankan President Gotabaya Rajapaksa requested assistance from China, but Beijing declined. Colombo desired the debt to be restructured in order to receive assistance in dealing with the economic crisis. The Sri Lankan media referred to the Chinese spokesperson’s statement as “crocodile tears.” Protests against Chinese projects are also taking place in Sri Lanka. In such a situation, Sri Lanka turned to an old friend, India, for assistance. India did not let us down.
India offered assistance by delivering diesel-rice.
India has dispatched 40 thousand tonnes of diesel from the ship to assist Sri Lanka, which is in the midst of a humanitarian crisis. Soon, 40 thousand tonnes of rice will be delivered from India. By Saturday evening, this oil had begun to be distributed throughout Sri Lanka’s cities. Soon, 40 thousand tonnes of rice will be delivered from India. It has begun to be loaded by Indian traders. Sri Lanka has been promised $1 billion in aid from India. Meanwhile, reports that India will send troops to Sri Lanka have been debunked by the Indian Embassy in Colombo.
On Saturday, the fourth consignment of diesel arrived in Colombo.
Other countries caught in China’s web should learn from this.
China has built massive infrastructure in almost every African country over the last two decades. China’s ‘Belt and Road Initiative’ has provided large-scale loans for such projects not only to Africa, but also to some Asian and European countries.
According to the data available, Angola owes China $ 25 billion as of 2020. Ethiopia owes China $13.5 billion, Zambia $7.4 billion, and the Congo $7.3 billion.
China has also lent money to Asia’s poor and developing nations. Sri Lanka owes billions of dollars in debt to China, and Pakistan is also in debt to China. Malaysia has received a 22 billion dollar investment from China.
Former Maldives President Mohamed Nasheed stated in December 2019 that his country owes China $3.5 billion in debt. China has also lent money to some European developing countries.