Sri Lanka, which was formerly known as Ceylon is a country situated in South Asia. It is an island country surrounded on all sides by the mighty Indian Ocean, southwest of the Bay of Bengal. Bearing a population of 22 million, it is a multinational state. It is full of diverse cultures, languages, and ethics. Sri Jayawardenepura Kotte is the capital while Colombo is the center of the economy.
Sri Lankans have excelled in each and every field after their emergence on the world map. Whether it be sports or imports and exports they were always doing good. However, the events of the recent past have changed their fortunes for the worse. The country is bankrupt. It has more than 51 billion dollars in foreign debt. There is no paper to conduct exams. No salaries to pay the government employees. President Rajapaksa has fled the scene. His luxurious house was invaded by angry protestors. They set fire to everything in the house. The President is now in the Maldives. In this article, we will highlight the reasons responsible for Sri Lanka’s miserable situation.
Sri Lanka is facing its worst economic crisis . After the end of the civil war in 2009, the then President took massive loans to rebuild the country. He was then deemed to be an ambitious person. The money was expected to be used to improve the economy of the island country. On the contrary, the distance between imports and exports increased.
In 2020, Sri Lanka had an export of $11.77B while the imports stood at $18.24B. This imbalance along with the standing debt of $51B has contributed a great deal to the current situation. Food inflation has risen to 80%. Its GDP was hovering around $80B in 2021. 1 US Dollar is equal to 360 Sri Lankan rupees. The foreign reserve of Sri lanka is at $1.9B by the end of March of this year
Incompetent and corrupt government
Corruption has eaten Sri Lanka just like a termite. Transparency International gave them a ranking of 102. Rajapaksa, the President, has a lavish lifestyle. When his house was invaded by protestors it was full of luxurious furnishings and supercars. In a country where the common and downtrodden are suffering for a piece of bread, its rulers are enjoying a lavish lifestyle.
Rajapaksa in 2015 even used aircraft of the Air Force for his election campaign. He has built a good setting for himself in Singapore and some other countries to seek refuge in. Rajapaksa’s government was so incompetent that it could not use the debts taken in 2009 to evoke poverty and deal with the economic crisis in the right way.
Lack of powerful friends
Sri Lanka has a nuclear power India adjacent to its borders. However, both countries do not enjoy healthy relations. India was accused of supporting rebels in Sri Lanka. India on other hand claims that there was a Sri Lankan hand in the assassination of Rajiv Gandhi.
The island country also lacks fraternal relations with any superpowers of the world. Actually, the country is considered to be of less strategic significance. So in times of dire need, Sri Lanka is practically alone. China, however, has announced to lend a loan of $11B to the suffering country. But at the time Sri Lanka is in need of much more.