Sri Lanka defaults on its $51 billion external debt

[TheCoinGrabber]

Besides that, some bad decisions from the govt like forbidding tp importation of fertilizer to produce organic foods create food shortages in the country. Mostly covid and govt is to blame for this current situation in Sri Lanka.

Wow that's the epitome of government mismanagement. What stuff do Sri Lanka export en masse that need to be certified as organic anyway? Even if that is the incentive, then just keep the organic fertilizers for those and allow the farmers to use what fertilizer they want for the other crops.

The funny thing is that their Prime Minister is a big fan of organic food which is why he has forced the farmers of his country to produce organic food. His government stopped fertilizer import without considering alternative food sources or checking their plans, which halved crop production. As a result, the government has to spend a large portion of its foreign reserves on food, which has further weakened its economy. A total mismanagement from the government.

I'm assuming they weren't self-sufficient with food to begin with and I bet they didn't even increased imports beforehand to enlarge their buffer stock. Clearly the problem when strong men politicians make rules based on their "preferences" without having it pass through studies first is that the project bombs.

[istiak2277]

Besides that, some bad decisions from the govt like forbidding tp importation of fertilizer to produce organic foods create food shortages in the country. Mostly covid and govt is to blame for this current situation in Sri Lanka.

Wow that's the epitome of government mismanagement. What stuff do Sri Lanka export en masse that need to be certified as organic anyway? Even if that is the incentive, then just keep the organic fertilizers for those and allow the farmers to use what fertilizer they want for the other crops.

The funny thing is that their Prime Minister is a big fan of organic food which is why he has forced the farmers of his country to produce organic food. His government stopped fertilizer import without considering alternative food sources or checking their plans, which halved crop production. As a result, the government has to spend a large portion of its foreign reserves on food, which has further weakened its economy. A total mismanagement from the government.

I'm assuming they weren't self-sufficient with food to begin with and I bet they didn't even increased imports beforehand to enlarge their buffer stock. Clearly the problem when strong men politicians make rules based on their "preferences" without having it pass through studies first is that the project bombs.

I have heard that their PM didn't consult with his cabinet members before taking such decision. Because of his arrogance food production in sri lanka cut to half that year and they had to import a large quantity of food because of food shortages. That further suck their already fast falling reserve. Now they are asking other country to do trade with their native currency which i am sure many won't agree with.

[Pejoh Asu]

I do not expect Sri Lanka to fail to pay its debts, this is what makes Sri Rare's economic condition chaotic, unemployment has increased significantly and many government companies are auctioned off to the private sector and even to other countries to pay debts, other countries deserve to learn from Sri Lanka so they don't experience the same thing .

[kryptqnick]

I'm sorry that some countries aren't coping well and can't pay their debt obligations. I wish that under current conditions okay countries got postponements and perhaps reduction, even, of their debt. It's unfair that Russia can spend money on the war and yet argue against being declared a country that's under default, and some countries are struggling with ensuring their citizens have the basics... And in such cases, the already vulnerable and financially unstable people suffer most. I hope Sri Lanka will get better and figure out a way toward economic prosperity.

[retreat]

I also read this sad news on the online news and feel very sad about what is going on in Sri Lanka. What makes me most angry is that many Sri Lanka ministers have fled abroad to secure the assets they have accumulated. I hope the crisis with Sri Lanka will end soon.

[arwin100]

I also read this sad news on the online news and feel very sad about what is going on in Sri Lanka. What makes me most angry is that many Sri Lanka ministers have fled abroad to secure the assets they have accumulated. I hope the crisis with Sri Lanka will end soon.

How really sad to see a country go to this situation and this really mean that corruption make this country fall. So this should be look deeply by other country because if their officials keep sucking the funds of the people this will happen to them also. Hope they can overcome with this crisis and elect those officials who have really heart for the people who suffer to much on this economic crisis currently they are facing.

[Scripture]

I also read this sad news on the online news and feel very sad about what is going on in Sri Lanka. What makes me most angry is that many Sri Lanka ministers have fled abroad to secure the assets they have accumulated. I hope the crisis with Sri Lanka will end soon.

This is my first time to hear a country declared a bankruptcy, I don’t know the effect of this in the long run but it looks like a disaster if you’re living in Sri Lanka, this is worst than having a high inflation rate. Is this because of China’s debt trap? I’m afraid that my country will ended up like this because we are also drowning in foreign debt.

[LazerPanther]

Colombo: Crisis-stricken Sri Lanka defaulted on its $51 billion external debt on Tuesday, calling the move a "last resort" after running out of foreign exchange to import desperately needed goods.

The island nation is grappling with its worst economic downturn since independence, with regular blackouts and acute shortages of food and fuel.

Sri Lanka's finance ministry said in a statement that creditors, including foreign governments, were free to capitalise any interest payments due to them from Tuesday or opt for payback in Sri Lankan rupees.

"The government is taking the emergency measure only as a last resort in order to prevent further deterioration of the republic's financial position," the statement said.

It added that the immediate debt default was to ensure "fair and equitable treatment of all creditors" ahead of an International Monetary Fund assisted recovery programme for the South Asian nation.

The crisis has caused widespread misery for Sri Lanka's 22 million people and led to weeks of anti-government protests.

International rating agencies had downgraded Sri Lanka last year, effectively blocking the country from accessing foreign capital markets to raise much-needed loans to finance imports.

Sri Lanka had sought debt relief from India and China, but both countries instead offered more credit lines to buy commodities from them.

First Lebanon now Srilanka declared themself bankruptcy. After the covid-19 break out some countries(especially those whose source of income was from tourism) face severe consequences. Another source of income was exporting quality tea which was also reduced significantly. Srilankan tea brand is infamous in the world. Besides that, some bad decisions from the govt like forbidding tp importation of fertilizer to produce organic foods create food shortages in the country. Mostly covid and govt is to blame for this current situation in Sri Lanka.

Note: Neputism is very common in srilanka and most of the important ministry is occupied by brother and relatives of current PM.

While many imports increased sharply, causing a serious crisis for the domestic economy, the government issued a ban on fertilizer imports, resulting in an unprecedented decline in agricultural output, which led to even greater import demand. In addition, there are non-repayable debts related to loans from China to build infrastructure. It's the end of government mismanagement.

[Sir Legend]

Sri Lanka is a country with a lot of debt and the current economic condition is very difficult, it is like a big country like China, USA or Europe to immediately provide emergency financial assistance to Sri Lanka, if it is not addressed immediately I'm afraid there will be riots and the sale of assets to the private sector is getting worse. massive.

[Kakmakr]

that's  right after they've commited sanctions over russia. It was a nice move

You are obviously a Russian, (Alexey).. and wants to put the blame for everything on the sanctions that was imposed on your country. You should blame Putin for his war mongering and the repercussions of his decisions to invade the Ukraine. The default on the debt has nothing to do with the sanctions that Sri Lanka implemented against Russia. (Most countries do this because they do not support WAR and if there was an aggressor against Russia, then Sri Lanka would have supported Russia)

The main reason for their economic hardship is the lack of tourist income for over 2 years. This will continue for many years, because people are afraid to travel and those who are not vaccinated cannot travel to other countries. 

[alexeyneu]

that's  right after they've commited sanctions over russia. It was a nice move

You are obviously a Russian, (Alexey).. and wants to put the blame for everything on the sanctions that was imposed on your country. You should blame Putin for his war mongering and the repercussions of his decisions to invade the Ukraine. The default on the debt has nothing to do with the sanctions that Sri Lanka implemented against Russia. (Most countries do this because they do not support WAR and if there was an aggressor against Russia, then Sri Lanka would have supported Russia)

The main reason for their economic hardship is the lack of tourist income for over 2 years. This will continue for many years, because people are afraid to travel and those who are not vaccinated cannot travel to other countries.  

this conclusion made by wion . And that is really the last deed of their gov

it's like "example made" in Phantom Doctrine

[Darker45]

This is such a really bad situation for Sri Lanka. The country's top leaders must vacate their positions. They have failed their people. They have effectively proven their incapacity to steer the nation forward amidst overlapping crises.

The Rajapaksa family has to quit from public office. They have only dragged the country toward oblivion.

And I hope they could find more ways to strengthen their local economies instead of running for help to predator countries like China and India. "More credit lines to buy commodities from them" doesn't sound so good at all.

[Moneyprism]

international banks have warned Sri Lanka to be careful with their debts, because their economy is not strong enough ... moreover there are some ports in Sri Lanka which are now in Chinese hands for a long time ... and some time ago China is already preparing to lend money to Sri Lanka to overcome their economic crisis ... it looks like Sri Lanka will be the next country to be occupied by China

[TheCoinGrabber]

I'm assuming they weren't self-sufficient with food to begin with and I bet they didn't even increased imports beforehand to enlarge their buffer stock. Clearly the problem when strong men politicians make rules based on their "preferences" without having it pass through studies first is that the project bombs.

I have heard that their PM didn't consult with his cabinet members before taking such decision. Because of his arrogance food production in sri lanka cut to half that year and they had to import a large quantity of food because of food shortages. That further suck their already fast falling reserve. Now they are asking other country to do trade with their native currency which i am sure many won't agree with.

Which is really sad. Each time I see news about it (mostly just WION though, I don't see my other recommendations mention it) it seems it's getting worse. I hope this become a cautionary tale for many nations to be more fiscally responsible. It was said Sri Lanka have a large trade deficit to begin with, losing all the tourism money coz of the coof and now having to import more food is just making it worse.

Though I'm sure there's government corruption involved in all these. For example, who else would take out a loan to build a port only to have it seized coz it turns out you can't pay for said port? Someone got rich.

[ultrloa]

I'm assuming they weren't self-sufficient with food to begin with and I bet they didn't even increased imports beforehand to enlarge their buffer stock. Clearly the problem when strong men politicians make rules based on their "preferences" without having it pass through studies first is that the project bombs.

I have heard that their PM didn't consult with his cabinet members before taking such decision. Because of his arrogance food production in sri lanka cut to half that year and they had to import a large quantity of food because of food shortages. That further suck their already fast falling reserve. Now they are asking other country to do trade with their native currency which i am sure many won't agree with.

Which is really sad. Each time I see news about it (mostly just WION though, I don't see my other recommendations mention it) it seems it's getting worse. I hope this become a cautionary tale for many nations to be more fiscally responsible. It was said Sri Lanka have a large trade deficit to begin with, losing all the tourism money coz of the coof and now having to import more food is just making it worse.

Though I'm sure there's government corruption involved in all these. For example, who else would take out a loan to build a port only to have it seized coz it turns out you can't pay for said port? Someone got rich.

This is fault of their government because they didn't to much on their actions made and this is the result for their not bothering to do more economical studies about those past actions they made. Governments should look at Sri Lanka and think more than became greedy to take unnecessary action because this incident might happen to other corrupt countries if they continue to milk their country for their own personal gains.

[Mr.Scott]

I'm assuming they weren't self-sufficient with food to begin with and I bet they didn't even increased imports beforehand to enlarge their buffer stock. Clearly the problem when strong men politicians make rules based on their "preferences" without having it pass through studies first is that the project bombs.

I have heard that their PM didn't consult with his cabinet members before taking such decision. Because of his arrogance food production in sri lanka cut to half that year and they had to import a large quantity of food because of food shortages. That further suck their already fast falling reserve. Now they are asking other country to do trade with their native currency which i am sure many won't agree with.

Which is really sad. Each time I see news about it (mostly just WION though, I don't see my other recommendations mention it) it seems it's getting worse. I hope this become a cautionary tale for many nations to be more fiscally responsible. It was said Sri Lanka have a large trade deficit to begin with, losing all the tourism money coz of the coof and now having to import more food is just making it worse.

Though I'm sure there's government corruption involved in all these. For example, who else would take out a loan to build a port only to have it seized coz it turns out you can't pay for said port? Someone got rich.

Yes, when leaders fall in corruption country become this way! Present monetary situation in Sri Lanka brought about by external and internal shocks. There's government corruption engaged with all these, no hesitate to say government is incompetent and corrupt. It's also uncommon that dollar to enter Sri Lanka on the grounds that there are no foreign investors because of their spoiled system of government.  

[kaya11]

Most countries should be able to survive and run themselves well without taking on debt as they'll have economies to fall back on. Sri Lanka is quite good at producing and extracting raw materials afaik so they've likely still got that part of their economy they can keep running to help build themselves back.

Name the best countries that produces raw materials and exporters in world, it doesn't matter how many they make as long as the leaders of their country is a person of self interest only-those numbers won't still suffice. These folks are sold to their foreign investors and little they know their country lies beneath at their feet. I hope it won't happen in my own land, good thing there are some sane leaders in here and puts first the interest of the nation and it's people.

[DVlog]

Most countries should be able to survive and run themselves well without taking on debt as they'll have economies to fall back on. Sri Lanka is quite good at producing and extracting raw materials afaik so they've likely still got that part of their economy they can keep running to help build themselves back.

Without outside investment economical growth is not possible for a developing country. People could still live by producing food in the old ways by their luxury of life will be oblivion. Only strong leadership can save the country right now or their natural resource will also be gone for paying the country's humongous debt.

that's  right after they've commited sanctions over russia. It was a nice move

The main reason for their economic hardship is the lack of tourist income for over 2 years. This will continue for many years, because people are afraid to travel and those who are not vaccinated cannot travel to other countries. 

The whole world faces the consequence of covid 19 with an economical hard blow but the Srilankan govt takes it to the next level by taking some decisions that can be blamed as the next level of stupidity. Simply in one word kinship and family corruption eat the economy of that country.

[Vaskiy]

Sri Lanka being a small country with a population of around 24million can come out of its economic downfall. The country depends much on tourism, but it wasn't able to make a recovery even after the covid-19 restrictions were taken out. Another reason is the mismanagement, the politicians are corrupt and they never think about the people. It has got more countries to help, and the funds provided were all corrupt.

[stompix]

Oh, the irony of having this topic just below the one about Russia and China forging a new world order, not even mentioning the fact about the debt being paid in rupees.

Sri Lanka had sought debt relief from India and China, but both countries instead offered more credit lines to buy commodities from them.

Loans taken on projects that were never going to be profitable, a corrupted government that got bribed and sucked into total dependency and here are the results, but it's pretty funny how find themselves in this mess they didn't stop for a moment to think how to get out on their own but took even more loans and when loans are not accessible anymore probably take mortages on whatever is left of the country.

that's  right after they've commited sanctions over russia. It was a nice move

Yeah, too bad it was one of the countries that didn't action Russia, and one of the the possible partners
https://www.tamilguardian.com/content/world-slaps-sanctions-russia-sri-lanka-looks-deepen-trade-moscow

fatal blow was sanctions, with people dying in queues to gas station

Yeah, but they were buying sugar, not gas, they had no cars and they weren't Sri Lankans but Russians.