Impudent behavior, perfidiousness, and demand for salvation have been noted in the eyes of many Sri Lankans against their President Gotabaya Rajapaksa. The ongoing crisis in Sri Lanka indicates that Lanka does not have enough money to even buy essentials.
According to the Economic Times, Sri Lanka’s economy is mostly dependent on tourism and agricultural exports, including garments, rubber, tea, and coconuts. Sri Lanka got independence in 1948, after which the world saw this country as a big opportunity to invest, trade, and build a healthy relationship because of its geographical region. Many failed to invest in Sri Lanka because of the civil war in 1983. The war placed impediments to developing a healthy, stable economy and creating new bonds with other countries.
However, with the hope of stepping toward development, Sri Lanka had a dream project which was Hambantota International Port. In the year 2010 for a cost of $1.3 billion. To seek help, Sri Lanka knocked on the doors of many big countries but nothing availed. They tried to establish that the project was not fruitful and rejected it.
Later, China came out and tried to aid Lanka. Hambantota port faced so many losses as Sri Lanka’s 70 % infrastructure projects have worsened its economic woes. Still, they had not identified the traps yet. China became the most evident of the many reasons for Sri Lanka’s downfall.
China knew that most of Sri Lanka’s projects had failed and they set Sri Lanka on shaking grounds. The Chinese made a political movement out of it that later pushed Sri Lanka into a deep crisis. As per consequence, they had to sell their projects to China under deep loans, as tourism was the main hand in Sri Lanka. In the year 2018 Sri Lanka breaks records as the most visited country by tourists, and many Sri Lankan destinations had been explored by 2.3 million tourists around the globe. However, Covid shook the country badly and left the country under big loans, and side by side China was grubbing Sri Lanka, India is helping, but Sri Lanka had asked for help from IMF as it is already engaged in helping Ukraine in the war.
In 2019 religious tensions increased as this year multiple bombings took place, named the Easter Day bombings 3 churches and 3 hotels were being targeted and 269 people died during this bombing. 8 suicide bombers were under arrest were Sri Lankan Tamils tied with a local Muslim association.
The condition a few days back was that many curfews and emergencies were set up to control the anger of people normal day-to-day subsistence has also crossed all the bars. Inflammation increased up to 25%.
In the Economic Times, a woman Susai in Sri Lanka says that their usual expense on essentials for a family of three, her mother, daughter, and herself, was around 30,000 Sri Lankan rupees a month. But this time she had spent 83,000 Sri Lanka rupees a month, there is a shortage of milk powder and day to today struggle is seen for rice and daal. Further, there is no electricity in the country because they import fuel. Only 4hrs of electricity is being provided a day to the people and the Sri Lanka ministers argue to stop using and to close the street light to save electricity and money. The supply of cooking gas is provided only once a week and the rate of gas cylinders is a whopping 4,200. The newspaper and printing industry of Sri Lanka had shorted down their pages to save on the cost of printing.
Materials required for printing have also increased, and schools postponed their exams. This huge blunder cost people to leave their homeland many refugees have taken the water route to leave the country. The foreign currency reserves were 70% since Jan 2020 to around $2.3 billion by February then a big fall of $779 million from December 2021.
If a country’s foreign reserves are less then it will be hard for any country to buy any foreign goods and make any kind of import. The current situation of Sri Lanka has left payments of $4 billion for the rest of this year, although Sri Lanka’s economy depends on agriculture Sri Lanka mostly depends on imported basic things which are sugar serials and pharmaceuticals because Sri Lanka had not been developed that they could create a big exchange.
Sri Lanka Government Rajapaksa came into power in the year 2019 promising the Sri Lanka people rapid economic growth and promised to reduce VAT Value added tax. The logic behind this was if people pay less, their consumption will increase, and people will spend more. The logic was good and this type of scheme was introduced and executed by many countries. Nonetheless, to execute this needed perfect timing in a favorable situation. Sri Lanka executed this scheme and cut down taxes on 1st Dec 2019 but after 2 – 3 months Covid – 19 pandemic became an obstacle to executing this scheme. Thus, as things were not on their part and gained so much revenue loss, the public left is projected to have risen from 94% of GDP in 2019 to 119 percent of GDP in 2021. Another reason is foreign debt this problem has been with Sri Lanka many times in the year 2017 the total debt stands at $64bn. About 95% of all government revenues go towards debt repayment.
In March 2020, Colombo had imposed a broad import ban to save foreign currency needed to service its $51 billion in foreign debts and China seems to be creating debt-trap diplomacy. China lends billions of dollars to the make and regains their infrastructural activities for their development only but if a certain country can’t repay the debt chain takes control over it and make work easy for themselves and start working it boundlessly, under Chinese company. After the emancipation of the Rajapaksa government from now on the public wants to see the light of hope in Sri Lanka in the new Prime Minister Ranil Wickremesinghe.
The current situation in Sri Lanka is – due to so much anger among people a big clash created among cops and protesters of Sri Lanka, that had turned the parental house into flames but everyone in the family and Rajapaksa had safely rescued.
India was a big help at every step in the downfall of Sri Lanka seeking help from other countries. Sri Lanka always sees the face of India and even though the Indo Sri Lankan relations may create stronger bonds in the future and could be a help in China’s situation as well.
About the Author– Ansh Nagpal, BA JMC student at MERI (Management Education and research institute) Affiliated with IP University. You may connect with him at firstname.lastname@example.org or anshnagpal_15 (Instagram account)