Know how the economic condition of Sri Lanka got so bad?
Sri Lanka is now seeking help from its neighboring countries India, China and the International Monetary Fund. The condition of Sri Lanka has become so bad that people have to stand in queues for several hours for fuel.
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Sri Lanka crisis |
The people of Sri Lanka, who are facing economic crisis, have become very furious now. Recently, about thousands of people targeted the President's residence and the Prime Minister's house. Bathed in the swimming pool there, took selfies while eating food, the whole world saw these pictures. Ranil Wickremesinghe, who took over as prime minister in May, had said that Sri Lanka's economy was deeply indebted.
Sri Lanka is now seeking help from its neighboring countries India, China and the International Monetary Fund. The condition of Sri Lanka has become so bad that people have to stand in queues for several hours for fuel. The economic crisis in Sri Lanka for the last few months has now taken the form of a political crisis. President Gotabaya Rajapaksa has fled the country. At the same time, Prime Minister Ranil Wickremesinghe has been made the caretaker President.
1. Sri Lanka is going through economic crisis
Sri Lanka is going through its worst economic crisis since independence from Britain in 1948 and needs at least four billion dollars as soon as possible to overcome the severe foreign exchange crisis. Negotiations were being held with the IMF for this.
2. people took to the streets
In Sri Lanka, people took to the streets due to shortage of petrol-diesel, medicines and other daily items. After this President Rajapaksa had to flee the country and Ranil Wickremasinghe was appointed as the acting President.
3. formation of new government
Gotabaya Rajapaksa is the first President of Sri Lanka to vacate office before the end of his term. Earlier in 1953, Prime Minister Dudley Senanayake had to step down after protests. According to the Constitution of Sri Lanka, a new government will have to be formed, which will be headed by the Speaker of the Parliament. But after this it is also necessary to elect a new President within a month.
4. For the first time since the 70s
It is believed that this has happened for the first time since the 70s. Explain that schools have been closed and people have been advised to do household chores so that supplies can be saved. Sri Lanka's foreign exchange is almost exhausted, that is, they no longer have money left to buy goods from other countries.
5. Is the corona pandemic a big reason?
This has happened for the first time in history. The government is blaming the corona epidemic for this as it has affected tourism and a significant part of Sri Lanka's income has been coming from tourism. After the 2009 civil war, Sri Lanka's emphasis was on the supply of goods in the domestic market, they did not try to reach the foreign market. Therefore, not only did the income from other countries decrease, the bill of import also increased.
6. $3 billion in imports
Sri Lanka now imports three billion dollars, which is much more than exports, so there has been a shortage of foreign exchange reserves. By the end of the year 2019, Sri Lanka had foreign exchange reserves of $ 7.6 billion. By March 2020, this fell to $1.93 billion, and recently the government has reported that only $50 million is left.
7. Forex shortage a serious problem
Sri Lanka's foreign exchange shortage became a serious problem in early 2021, when the government banned the import of chemical fertilisers. Farmers were asked to use local organic fertilizers. This resulted in massive crop loss. Sri Lanka had to meet its food reserves from abroad and foreign exchange started depleting further.
8. foreign debt on sri lanka
The foreign debt on the government of Sri Lanka has increased to 51 billion dollars. Of this, $ 6.5 billion belongs to China and both countries are reconsidering it. This year Sri Lanka will have to pay seven billion dollars for its debt. The World Bank has agreed to lend $600 million to Sri Lanka.
India has pledged $1.9 billion and can lend an additional $1.5 billion for imports. The G7 group of major industrialized countries includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. He has said that he will assist Sri Lanka in debt relief.
