Pranam
Sri Lankan government declared an economic emergency in 2021 in view of
rising food prices, a depreciating currency, and rapidly depleting forex
reserves. The situation reached to an extent where President Gotabaya
Rajapaksa called in the army to manage the crisis by rationing the supply
of various essential goods.
According to the World Bank estimates, 5 lakh people in Sri Lanka have
fallen below the poverty line since the pandemic struck, which it described
as a "huge setback equivalent to five years' worth of progress".
Factors that Led to Economic Crisis: Explained in 5 Points
1 The tourism industry, which accounts for 10 per cent of the country's
GDP, is hit hard by the pandemic. Several countries including Canada
recently warned its citizens over travelling to the Island country due to
foreign exchange crisis and this is not going to help the industry. The UK,
India and Russia are three major sources of inbound tourism for the Island
country.
2 India rejects report of Sri Lanka using Line of Credit to import water
cannons The government's decision to ban chemical fertilizers to make
agriculture 100 per cent organic had a negative impact on the economy.
Agricultural production is being hit by the new law as organic farming
reduces production by half, as per the experts. The price rice of
essentials including rice and sugar allegedly due to hoarding of essentials
by "food mafia" added to the woes.
3 A major problem that the country is facing is a huge foreign debt
burden as it owes over *$5 billion in debt to China alone*. It is paying an
additional $1 billion loan to Beijing that it took in 2021. It also owes
big money to India and Japan. As of November, foreign currency reserves
available with the country were just $1.58 billion, down from $7.5 billion
when Rajapaksa became the president in 2019. With forex reserves dropping
from over $7.5 billion in 2019 to around $2.8 billion in July 2021, the
supply of foreign exchange was hit while increasing the amount of money
that Sri Lankans have had to shell out to purchase the foreign exchange
necessary to import goods. As a result, the value of the Sri Lankan rupee
depreciated.
Lanka government defends imposition of emergency amidst criticism Sri
Lanka's high dependence on imports for its essential items such as sugar,
pulses, cereals and pharmaceuticals has only added to the troubles as the
country is facing a shortage of foreign currency to pay the import bills.
KR IRS 8522
On Sun, 8 May 2022 at 07:04, Markendeya Yeddanapudi <
[email protected]> wrote:
>
>
> --
> *Mar**The Disastrous Antibiosis*
>
>
>
> Every Democracy has been taken over by capitalism. And capitalism is taken
> over by the War Industries and the Drugs Industry. Weapons of mass
> destruction cost money, and they need the whole captive economies of
> nations, as the paying customers. Elections are financed by the war
> industry tycoons after taking the promise from the candidates that they
> will bring wars and as a result bring the weapon sales to them.
>
> The strife in Afghanistan, gave a trillion dollar profit every year. When
> that great market was about to be lost, the American army left suddenly at
> midnight, without informing the legal Afghan government, but informing the
> Taliban and after handing over the huge arms cache to the Taliban. As the
> problem of Kashmir is almost solved by Modi,the Taliban are expected to
> ignite the cauldron, which they have started now.
>
> The war between Russia and the Ukraine created a huge market for various
> armaments, big sudden windfall profit, but that war may not last for years
> and years. But the reconstruction contracts which debt traps Ukraine spells
> billions. The number of strifes created in the world, by the weapon
> manufacturing industries now runs into dozens.
>
> How can Sri Lanka, endowed with the wonderful evergreen forests and the
> Ayurvedic heritage become bankrupt, something impossible? A desperate Sri
> Lanka is a big menace to India, if it chooses to adopt the method of very
> small nations, which have taken to catering to the black money bags. If the
> big thieves of India who loot money via politics, find a safe avenue to
> conceal their loots in Sri Lanka, then that Country will become very rich
> in the shortest time. How can Sri Lanka not become prosperous when every
> single leaf there from every plant is wonderful Ayurvedic medicine? But
> China has debt trapped Sri Lanka thanks to the Rajapaksha dynasty.
>
> YM
>
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>
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