Country Seeks HELP Amid Economic COLLAPSE
(RepublicanReport.org) – The South Asian island nation of Sri Lanka has been in turmoil, on several fronts, for a number of months. Economic difficulties, weather events, and the COVID-19 pandemic have contributed to the current situation in which millions of Sri Lankans now find themselves unable to pay for food and other basic necessities. The country’s leaders are desperate to find a way out of this dire state of affairs and are now turning to other nations and the International Monetary Fund (IMF) for assistance.
Sri Lanka Seeks To Borrow Its Way Out of Difficulty
Sri Lankan Prime Minister Ranil Wickremesinghe addressed the country’s parliament on Wednesday, June 22. He stressed the extent of the difficulties the small island nation is facing in a speech experts reckon was designed to keep expectations low for a speedy recovery. As supplies of fuel, electricity, and food continue to dwindle, Wickremesinghe is attempting to rectify the situation by continuing to appeal to other countries and the IMF for financial help. He says this is now the only thing that will save Sri Lanka from destitution.
The speech also contained references to Sri Lanka’s strategic international importance. The island lies on one of the world’s most important shipping lanes, meaning other countries have an interest in ensuring it does not fall into total fiscal ruin.
India has already played a key role in keeping Sri Lanka afloat over the last few months. However, Sri Lanka’s leaders stress they cannot rely upon aid from its larger neighbor indefinitely.
How Did This Happen?
Sri Lanka has been deep in crisis for a number of months, but the issues that gave rise to the current catastrophe have deeper roots dating back years.
The Rajapaksa brothers were in power in Sri Lanka from 2005 to 2015, and again from 2019 until earlier this year. They were popular among large swathes of Sri Lanka’s society for much of their time in power. However, the blame for this crisis is largely placed at their feet. Critics of the powerful family highlight how they weakened independent institutions, made questionable fiscal policy decisions, and got Sri Lanka deeper and deeper in debt over the years. This debt is now a key factor in the nation’s economic instability.
COVID-19 also hit the island nation hard. It had been a popular tourist destination, but lost massive amounts of foreign revenue due to pandemic-related travel restrictions.
The current situation is reportedly the deepest economic turmoil Sri Lanka has dealt with in about 70 years. Things are currently so bad that members of the country’s once-thriving middle class are now struggling to buy things like milk and toilet paper.
Would the IMF’s assistance get Sri Lanka back on track, or would it merely serve as a temporary solution to the country’s problems?
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