Sri Lanka’s recent upheaval offers an extreme example of the world’s recent problems. Covid disrupted the country’s major industries, particularly tourism, and then leaders failed to adapt — setting off a chain of economic calamities, including food and fuel shortages.
The unprecedented economic crisis in Sri Lanka has seen people queuing up for fuel, food, and essential medicine as the government in May announced that it could not pay its USD 51 billion debt, and on July 5 announced that it was bankrupt.
It appealed to the international community to step in and help Sri Lanka to overcome the unfolding humanitarian crisis as protesters spilled onto the streets.
The international community, instead of extending assistance, blamed the Rajapaksas for the economic mess. Help flowed in mostly in terms of bilateral assistance, in which India topped the list for extending assistance to the tune of USD 3.8 billion – shipping fuel, food, medicine, and fertilizers.
Bangladesh came forward to provide USD 2.3 million in emergency medical supplies and potato relief packages – an important food item in South Asia. China pledged a total food donation of 10,000 metric tons of rice to Sri Lanka and assistance of USD 75 million.
The US provided only USD 20 million, Japan USD 1.5 million to procure medicine. The UN announced humanitarian assistance of around USD 48 million over a four-month period. In June, it warned of an "unfolding multi-dimensional food security crisis." Source: thedailystar
The prime minister yesterday lambasted those who are making wholesale criticism that Bangladesh will face the same situation as that of Sri Lanka.
They are making the comments without realizing the global context under the fallout of the Covid-19 and Russia-Ukraine War, she added.
"Let them say that everything will be ruined. But we are doing our tasks to move Bangladesh forward. The country must advance as the people are always with us and we have trust in them," she said.
The premier said this at the inauguration of National Fisheries Week-2022. Source: thedailystar
Among the few rock-solid rules of international politics is the principle that when the voters are in the presidential swimming pool, it’s time for a change of leadership.
After a remarkable popular uprising against a government blamed for an unnecessary economic catastrophe, former president Gotabaya Rajapaksa fled the country and resigned on 14 July.
Sri Lankan protesters held a protest in front of the Prime Minister's Office, 13 July 2022 (Photo: Isura Nimantha/Pacific Press/Sipa USA via Reuters).
The dramatic exit was a prelude to the anticlimactic appointment of a new president by parliament, which put its support behind Ranil Wickremesinghe, a long-time Rajapaksa ally.
Rajapaksa’s administration was not solely responsible for Sri Lanka’s economic woes, as Chulanee Attanayake argues. Policy failures by successive governments, combined with the COVID-19 pandemic and Ukraine crisis, but the economy under extreme strain.
‘But a series of misplaced and ill-advised policies made by his government exacerbated a crisis that had been years in the making.
The new government now embarks upon negotiations on debt restructuring and other economic and humanitarian relief, presumably with the cost of a tough program of spending cuts, privatization, and sundry microeconomic reform.
Sri Lankans and the world are about to learn what matters more in making such a deal work — political authority or political legitimacy.
The former might well cancel out the latter, Neil de Votta concludes in this week’s lead article. President Wickremesinghe is a consummate political insider — a former prime minister, cabinet minister, and parliamentarian who maintains close ties to the Rajapaksa clan.
He should be adept at marshaling political support within the elite for the painful adjustment program to come, and he has proposed a unity government with the opposition parties that were outmaneuvered in the presidential vote. Source: Eastasiaforum
The ongoing economic crisis in Sri Lanka is a warning to other Asian nations and these countries could be at risk of similar trouble, according to the head of the International Monetary Fund (IMF).
"Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign," said IMF managing director Kristalina Georgieva at the G20 finance ministers' summit in Indonesia on Saturday.
She said emerging and developing countries have also been experiencing sustained capital outflows for four months in a row and these countries now suffer the risk of reversing three decades of catching up with advanced economies and instead falling further behind.
With reference to the remarks of IMF chief Kristalina Georgieva, BBC on Sunday named four Asian countries -- Bangladesh, Pakistan, Maldives and Laos, that worryingly appear to be on a similar trajectory.
Sri Lanka, a country of 22 million populations, had built up a huge amount of debt over the years and last month, became the first nation in the Asia Pacific region in 20 years to default on foreign debt, according to the BBC report
The country is struggling to pay for imports, with inflation soaring about 50 per cent and food prices 80 per cent more than a year ago, and its currency value slumped against the US dollar and other foreign currencies.
Sri Lanka had been negotiating with the IMF for a $3b bailout, but talks are currently stalled amidst nationwide political chaos that saw its ex-president Gotabaya Rajapaksa fleeing the country and quitting afterward.
BBC said, “Many blame ex-president Gotabaya Rajapaksa for mishandling the economy with disastrous policies whose impact was only exacerbated by the pandemic.” Source: prothomalo