The cause of the crisis is the economic collapse of one of the most promising countries in South Asia, which until a few years ago was considered a good model for large-scale economic development in a short time.
In the early 2000s Ski Lanka managed to defeat a widespread uprising of the Tamil minority in the north of the country and suppress any mighty terror that swept the country’s cities.
In the aftermath of the Civil War the Sri Lankan economy soared and the then heads of state decided to take out a series of large loans from China to finance the construction of ports, airports, railways and roads to help local industry export goods abroad.
The country’s infrastructure has indeed improved and the export market which was limited to products like tea has started to grow, along with tremendous growth of tourism to the country.
In the decade after 2009, when the war with the Tamil Tigers in northern Sri Lanka came to an end, the country enjoyed steady economic growth alongside an increase in foreign exchange reserves as a result of the increase in exports and tourism.
But the sudden prosperity obscured a problematic reality.
Sri Lanka remains a country with a double deficit, with spending on imports also exceeding export revenues, and the state budget larger than its revenues.
As long as the economy continued to grow along with an increase in merchandise exports, the situation remained problematic but manageable.
Sri Lanka, Photo: Moshe Shai
Sri Lanka, Photo: Moshe Shai
Sri Lanka, Photo: Moshe Shai
The perfect storm came in 2019. In one sharp blow, the corona plague cut off all of the country's revenue from tourism and in addition brought back hundreds of thousands of foreign workers who brought a large amount of foreign currency into Sri Lanka's economy and are now left unemployed.
While spending on the corona crisis further welled up the deficit to the detriment of the government in Colombo, the price of tea plummeted and broke within months one of the most lucrative industries of the Sri Lankan economy.
But not all of the economic blows that landed on Sri Lanka were fateful.
Many of them were serious mistakes made by the government.
In 2019, Gutbia Rajapaxa, the hero of the country's civil war and one of the country's favorite military leaders, was elected president.
Rajapaxa took the reins of power, appointed his brother, Mahinda Rajapaxa as prime minister and came out with a series of words of relief to various sectors, which cost the country billions of dollars in a moment of crisis on a scale.
It was difficult for the two general brothers, who came from a military background and ignored the warnings of the economists, to see and understand.
Gottlieb Rajapaxa, President of the State, Photo: Ai.
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Protesters in the pool of the official presidential residence in Sri Lanka, Photo: Ai.
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In addition, the Rajapaxa brothers, encouraged by environmental organizations, promoted a move banning the use of synthetic fertilizers in the country’s agriculture, a move that caused enormous damage to the country’s agricultural sector and further increased Sri Lanka’s heavy dependence on imports from its country.
strangeness.
Foreign exchange reserves have plummeted in less than two years from nearly $ 8 billion to $ 1 billion, and are now almost completely depleted.
Sri Lanka, which is struggling to repay its debts to its creditors, particularly in China, is having difficulty securing payments for imported basic products such as grain and fuel.
The gas stations in the country have closed and apart from emergency vehicles, there are no fuel allocations for the residents at any cost.
Inflation in the country is close to thirty percent, food prices have jumped almost religiously and schools have closed.
Medicines imported into the country have also run out of shelves and people are being referred for medical treatment due to recycling of basic medical products.
Sri Lanka is currently negotiating with the IMF on a multi-billion dollar package of troops to get the economy back on track and provide basic products to citizens, but without huge structural changes, the chances of the fund helping Colombo are slim.
Depressingly, Sri Lanka, like many developing countries before it, has fallen into the trap of too optimistic and rapid development and now its citizens are paying the price in their hope of a better life for their children.
Demonstrations in Sri Lanka, Photo: Ai.
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Demonstrations in Sri Lanka, Photo: Reuters
Demonstrations in Sri Lanka, Photo: Reuters
Demonstrations in Sri Lanka, Photo: Ai.
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Demonstrations in Sri Lanka, Photo: Ai.
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Demonstrations in Sri Lanka, Photo: E.
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Islands
Sri Lanka, Today, Photo: API
Sri Lanka riots, Photo: API
Local police sprayed tear gas, Photo: Reuters
Colombo, yesterday, Photo: EPI
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