Economic Crisis | Emergency in Sri Lanka
Friends, you must know the condition of Sri Lanka, At present there is a state of emergency declared. The economic condition of that country has become very bad. Social media websites have been banned, And a curfew has been declared across the island. Thousands of people took to the streets to protest. There is a severe shortage of fuel and food throughout the country. And Sri Lanka is going through a severe economic crisis.
Sri Lanka’s foreign currency reserves stood at just $2.3 billion in February. It is about 70% lower than the January 2020 comparison. If a country has low foreign currency reserves, it becomes difficult for that country to import the same from abroad. Sri Lanka has a debt payment of over $4 billion. Sri Lanka is a small country where goods have to be imported from other countries. Our country can be imported from different states, there is no need to import from another country.
Economic Crisis in Sri Lanka
Due to low foreign exchange reserves, similar imports are having difficulty, so prices of basic commodities are rising rapidly in Sri Lanka. Last month saw 25% inflation in Sri Lanka. People are having trouble buying basic items Such as rice, sugar, milk, etc. At present the price of rice in Sri Lanka is Rs.290/kg, sugar is Rs.290/kg, milk powder is Rs.790/400gm. In some restaurants a cup of tea costs 100 rupees.
Apart from this, there is also the problem of electricity in the whole country Because fuel is imported from outside. Electricity is supplied to people’s homes only for 4 hours in a day. Street lights were also switched off to save electricity. The LIOC has given 6,000 MT to Sri Lanka So that the condition can be improved. The supply of cooking gas is coming only once a week. The price of a gas cylinder has been 4200 Sri Lankan rupees.
There are long lines of people outside the petrol pump, School exams have also been postponed. Due to such a terrible economic crisis, some people have started leaving the country. India is already supporting Sri Lanka. Gives permission to refugees from Sri Lanka to come to India. Sri Lanka is requesting $1 billion credit lines from India So that he can import the same basic for his country. Sri Lanka has sought help from China, Sri Lanka has demanded a 2.5 billion credit line from China.
What the reason for this Economic Crisis?
In 2018, Sri Lanka was the top tourism in the world, Millions of tourists were coming from abroad. In 2018, 2.3 million tourists visited Sri Lanka. 12% – 15% of the economy came from Sri Lanka Tourism alone. Then in the year 2014 there were many bombings in Sri Lanka. Also called Easter bombing. 3 churches and 3 hotels were targeted. In which 3 people were killed, Of these, 45 were foreign nationals.
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8 bombers were responsible for the bombing, Who was a Sri Lankan citizen and from a local Islamic group. The next month saw anti-Muslim violence in Sri Lanka. The homes of many Muslims were attacked. The government then imposed a curfew to control the situation And blocked fakebooks, WhatsApp. All of these factors have had a devastating effect on tourism.
Then in March 2020 came the Kovid-12 global epidemic. The world’s tourism sector closed down. The government loses revenue due to the epidemic. Sri Lanka did not need to import rice from India. But due to wrong decisions taken by the government, rice also had to be imported. Sri Lanka used to export tea to other countries. it was also destroyed due to the decision of organic farming.
Sikkim in India is a 100% organic state. Started organic farming in 2003. This has boosted the tourism of Sikkim. Food mafia is also one of the causes of Sri Lanka’s economic crisis. The government says the food mafia is hoarding grain. Basic goods are being black marketed such as rice, sugar, pulses.
Apart from all these problems, one final reason is foreign debt. This problem is the historical problem of Sri Lanka Which has been going on for many years. In 2017, the total debt of Sri Lanka was $64 billion. In 2020, the total debt of Sri Lanka was $51 billion. For all these reasons, the value of the Sri Lankan rupee has come down. Which makes imported goods very expensive. Which is leading to rising inflation. All the ministers in the Sri Lankan government have given up resign.