Sri Lanka defaults on its $51 billion external debt

[Swordsoffreedom]

Notice this thread just now. I watched the news about Sri Lanka a few days back on your native TV news. I realized the main reason for bankruptcy is corruption there. Government peoples fill their pocket by corruption behind so-called development in their country. That's the reason why a lot of development becomes worthless and default loans. If the government servants become corrupted then this is the result expected. I can't see any other valid reason bankruptcy of Sri Lanka at all. It will be hard for them to overcome this situation due to wrong decisions by the government.

Yes, it's 100% true,

People can blame Covid 19 only, It's also true that Covid 19 has claimed the lives of millions of people and crippled the economies of the countries. Inflation has now become a daily occurrence in countries.
The prices of basic necessities have gone up so much that they are almost out of reach of the common man. Even stable countries like USA also have been facing the problem of inflation since covid. Most of them like china, India, and other below-average countries are recovered now cause they are less corrupted than Sri Lanka.

However, most of the time behind these problems lies the corruption and opacity of the government and its other officials. And that's what happened recently with Sri Lanka.

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[Sithara007]

That isn't as simple as you think. Their country is reeling from debts at the moment which implies that they don't really have time to focus on improving their education system.

They can't import anything, because their forex reserves have gone dry. Citizens are queueing for gasoline and cooking gas, and supermarket shelves are also empty. And here in India, there are reports of refugees arriving in the Southern State of Tamil Nadu by boat from Sri Lanka (some 15% of the Sri Lankan population is Tamil, and they have cultural connections to Tamil Nadu). Here we feel just lucky, because almost all of our neighbors are going through economic crisis (Sri Lanka, Nepal, Pakistan.etc).

[suzanne5223]

~
Yes, it's sad that this happened to some countries but let's be honest here. The whole system of the Central Bank, politics, and education is a scam and even since the Covid-19 breakout a lot of people have already known that our Central Bank have failed us and the result of their failure is what we see that reflect in the country like Sri Lanka and Lebanon.

Policies taken by the banking system and the political system are the majority of the reason for these kind of huge debts, i am not personally not aware of the political situation in Sri Lanka but this was news headline all over the world and they are blaming the entire situation on the untimely pandemic, what they are trying to hide is the fact that they were already in trouble well before the pandemic and the pandemic might have fast tracked their position.

These are one of the reasons why I said banking and political system are scam. I wonder if people will be taking into a certain office to solve the previous problem but instead of them solving the problem what they do is add to it and later bring up a lame excuse whereas they are making the same mistakes over again. Meanwhile, the answer to the issues is an innovative concept but they won't open the door for it.

[19Nov16]

Of course the sad thing is to see the financial condition of Sri Lanka, inflation is very high in the value of imports to increase while exports are very small so that the Sri Lanka economy is very dependent on debt, the first thing to do is increase local production, especially agriculture which currently has a strong position.

[Renampun]

...

Countries that can't sustain a diversified income with a bit of savings or future debt can't sustain and vulnerable. Look at the USA, they are in big debt, and they do not have easy time paying that neither, each year they are growing that, why are they not worried or not defaulting? Because, they are spending that money to earn more in the future, the 500 billion debt you make today, could mean 50 billion a year in the future, the 2 trillion you spent could comeback as 300 billion a year.

So, basically it is a situation where Sri Lanka could have relied heavily on manufacture and still would bankrupt, or farming and still bankrupt, you need to invest into multiple different sources of income or you will do badly.

imo managing debt is not an easy matter, the power of the US and sri lanka is much different...

it is obvious that the US is able to manage debt into profit every year, that is their advantage but in contrast to sri lanka, their country has debt and also a high number of corruptors which makes the function of the debt bad. just see what will happen to sri lanka when they manage to get loan funds from the IMF and world bank, whether they will be able to manage the debt!!

[horrifiedx1]

...

Countries that can't sustain a diversified income with a bit of savings or future debt can't sustain and vulnerable. Look at the USA, they are in big debt, and they do not have easy time paying that neither, each year they are growing that, why are they not worried or not defaulting? Because, they are spending that money to earn more in the future, the 500 billion debt you make today, could mean 50 billion a year in the future, the 2 trillion you spent could comeback as 300 billion a year.

So, basically it is a situation where Sri Lanka could have relied heavily on manufacture and still would bankrupt, or farming and still bankrupt, you need to invest into multiple different sources of income or you will do badly.

imo managing debt is not an easy matter, the power of the US and sri lanka is much different...

it is obvious that the US is able to manage debt into profit every year, that is their advantage but in contrast to sri lanka, their country has debt and also a high number of corruptors which makes the function of the debt bad. just see what will happen to sri lanka when they manage to get loan funds from the IMF and world bank, whether they will be able to manage the debt!!

When dealing with corruptors, of course, this is like turning off the system of a country, where a few people will only think about themselves, resulting in a monopoly that ultimately makes people miserable. therefore we can look in the mirror of developed countries, where even though they have bigger debts, but with proper management, it will create prosperity for their people. Indeed, corruption will bring damage to a country, especially mentality

[mdzahed134]

The sad thing to see the current rare condition of Sri, from a lot of news on TV and Social Media shows very high unemployment, the first thing Sri Lanka must improve is to improve the education system so that the people can be productive and of course reduce imports that are very burdens on the country.

You know Sri Lanka literacy rate over 90% still now, so there are no fault with education system. Mainly a few reason for this situation as like they're trapped in excessive foreign debt, Many mega projects have been built but the government has not benefited from them so now it's not possible to repay the foreign loans. Then Sri Lanka mainly depend on their tourism sector which is affected by Covid19.

[alexeyneu]

disagree about tourism. say on antigua people are poor too and have been. it has 100k population and had 1m /y tourists. Where sri lanka has 22m with 2.3m/y . it solves nothing anyway

[mdzahed134]

disagree about tourism. say on antigua people are poor too and have been. it has 100k population and had 1m /y tourists. Where sri lanka has 22m with 2.3m/y . it solves nothing anyway

Whether you agree with me or not that's true if you will check 2018 economic growth chart, where Sri Lanka earned over 4 billion usd from tourism sector which is near 6% in their GDB but it’s dropped below 1% after 2019 when covid started and lockdown. So, Sri Lanka earned a significant amount of money from their tourism industry it’s definitely a big contribution in their GDP.

[Freeesta]

The country is in an economic crisis, people come out to protest. There is a shortage of medicines, food, energy resources in the country. I wonder what will happen to the government? What should the government do to fix the situation? How can this government work if it has made bad living conditions for people. Maybe someone can help this country...

[crzy]

The country is in an economic crisis, people come out to protest. There is a shortage of medicines, food, energy resources in the country. I wonder what will happen to the government? What should the government do to fix the situation? How can this government work if it has made bad living conditions for people. Maybe someone can help this country...

China puts this country into a big debt, and the Sri Lanka government bite the trap, and this is the result already. I don’t think they will rise again in a short period of time so people in Sri Lanka should bare this crisis for more years and look for a better alternative as much as possible to live their daily needs. The government of Sri Lanka should start thinking for a better economic strategy, keep the good supply of basic necessities and calm their people, have a good propaganda and slowly they can recover.