Topic: Sri Lanka defaults on its $51 billion external debt - page 2. (Read 572 times)
There are many reasons behind the bankruptcy of Sri Lanka. All we know, Sri Lankan economy mostly depends on Tourism industry. Because of COVID-19, their Tourism industry is totally off. At this time, they loss huge amount. Another hand, the government of Sri Lanka take a lots of Developmental workWith foreign debt. At this moment they didn't give Debt settlement.
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As you said even if people get aid from donations still there is no supply of products which is badly needed right now starting from the fuel, electricity, milk, veggies,etc.So individuals can't import goods for themselves without the government help so they are in need of some leader who understand the situation and has the ability to control which will atleast save people from starving to death then they can slowly gain back what they lost due to improper government policies made by group of stupid belong to single family.In this case the government (assuming it survive this) should either put up a good system for distribution OR just get the fuck out of the way and let NGOs come in and handle it. With most things in life, preferably the latter or else it'll be like Haiyan where donations both domestic and international just ended up rotting in warehouses.
i continue to follow developments regarding the news of Sri Lanka which is currently bankrupt and feel sad to see so many citizens suffering as a result of their government being very ignorant in managing the country of Sri Lanka. The last good news i read is that the IMF and the world bank are ready to help Sri Lanka, i hope this is not another debt trap.
indians feed them when are in mood. it's not africa . 1600m can feed 20 more
https://www.hindustantimes.com/world-news/india-sends-11-000-mt-of-rice-to-sri-lanka-ahead-of-new-year-101649752359499.html
https://www.hindustantimes.com/world-news/india-sends-11-000-mt-of-rice-to-sri-lanka-ahead-of-new-year-101649752359499.html
As you said even if people get aid from donations still there is no supply of products which is badly needed right now starting from the fuel, electricity, milk, veggies,etc.So individuals can't import goods for themselves without the government help so they are in need of some leader who understand the situation and has the ability to control which will atleast save people from starving to death then they can slowly gain back what they lost due to improper government policies made by group of stupid belong to single family.
If donations start, then we could start with sending money but we could also start sending stuff as well. Like food and other stuff. That would probably result with something decent and we would definitely end up with a proper rebuilding process. I am not saying that it will be perfect, but it would certainly be something at least. I said the same thing when Venezuela first got terrible, if the world wanted to, we could definitely help them.There is enough money in the world to help each nation in terrible condition, the downside is that people with billions may end up with less billions, I am sorry but cry me a river, it wouldn't be a big deal at all.
Billionaires also will help only with certain agreement like based on investment or something which benefits them and China is already doing it and looting all their natural resources.
Nepotism was a cancer to the Srilanka.Because the ministry of the government was occupied by the PM brothers.Long term this was happening in the Srilanka.The youth wing of Srilanka had started the revolution against the government.But the thing is their is no change in the government.All the people involved in the revolution was arrested,it should be looked by world people.
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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.
They never learn though. Unless the Sri Lankan leader go to jail should the military launch a coup, he'll be able to flee. Most times these leaders already have back up plans on how to escape and live comfortably abroad. Take for example the Marcoses of the Philippines.
From some TV news that i saw in Sri Lanka experiencing many crises, from oil, electricity and so on, of course this is a serious problem from the Sri Lanka economy team and i hope that soon there will be help to save sri Lanka.
I wonder why OP didn't mention about Chinese debt. 10% of their entire debt is along with China. Sri Lanka has already lost control of Goadar Port to China owing to the debt and now they have declared bankruptcy. Read more here,
https://timesofindia.indiatimes.com/business/international-business/explained-how-sri-lanka-fell-into-debt-trap-defaulted-on-foreign-payments/articleshow/90805938.cms
It is definitely a prime example of government mismanagement. Also their main source of income was tourism which got hit by Covid very seriously. We are seeing the cumulative effect now.
Countries that only rely on income from tourists are very vulnerable to bankruptcy...https://timesofindia.indiatimes.com/business/international-business/explained-how-sri-lanka-fell-into-debt-trap-defaulted-on-foreign-payments/articleshow/90805938.cms
It is definitely a prime example of government mismanagement. Also their main source of income was tourism which got hit by Covid very seriously. We are seeing the cumulative effect now.
I agree that the phenomenon that is happening in Sri Lanka is the result of "mismanagement" by their government. they can't afford to pay debts and interest on debt from china, the biggest income only comes from tourism and the sizeable corruption is a fatal mistake from the sri lanka government. It will take a long time for Sri Lanka's economy to recover.
As you said even if people get aid from donations still there is no supply of products which is badly needed right now starting from the fuel, electricity, milk, veggies,etc.So individuals can't import goods for themselves without the government help so they are in need of some leader who understand the situation and has the ability to control which will atleast save people from starving to death then they can slowly gain back what they lost due to improper government policies made by group of stupid belong to single family.
If donations start, then we could start with sending money but we could also start sending stuff as well. Like food and other stuff. That would probably result with something decent and we would definitely end up with a proper rebuilding process. I am not saying that it will be perfect, but it would certainly be something at least. I said the same thing when Venezuela first got terrible, if the world wanted to, we could definitely help them.There is enough money in the world to help each nation in terrible condition, the downside is that people with billions may end up with less billions, I am sorry but cry me a river, it wouldn't be a big deal at all.
It is sad to see that Sri Rare's economy is heavily dependent on debt and is now failing to pay its debts. The thing that must be improved is the production and expansion of natural resources to the maximum in order to make Sri Rare's economy better in the future.
The countries that are suffering economically did not just happen just because of the pandemic, it played a part but the most important aspect is the constant bad decisions by the government for several years that have taken them to a situation where they want to depend upon other countries to restructure their loans, in the case of Sri Lanka, they have taken huge loans from China and if China decides they can restructure their loan. Inflation has caught up big time and we understand that Sri Lanka is struggling really bad at this moment.
It is the same story everywhere. Populist governments around the world are constantly splurging money on welfare schemes, which have no long term impact on the ground. Apart from some short term benefits, these schemes make people more and more unproductive and enslaved to the government handouts. The federal debt rises beyond a sustainable limit as a result of these actions, and in the long term it weakens the national currency and the local economy. In this case Sri Lanka spent tens of billions of USD on wasteful infra projects with zero returns, in addition to welfare schemes.
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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.
The countries that are suffering economically did not just happen just because of the pandemic, it played a part but the most important aspect is the constant bad decisions by the government for several years that have taken them to a situation where they want to depend upon other countries to restructure their loans, in the case of Sri Lanka, they have taken huge loans from China and if China decides they can restructure their loan. Inflation has caught up big time and we understand that Sri Lanka is struggling really bad at this moment. 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.
A very large debt burden while the gross domestic product is very small has made Sri Rare trapped in debt, now Sri Rare must remove all subsidies including education and health which are desperately needed by the people, I believe a long-term economic recession will occur in Sri Lanka and other countries' obligations to help immediately.
In hindsight my comment was kinda harsh but I'm still of the opinion that the people should be pissed off enough to replace their current politicians. As for the actual aid, maybe crypto can help with that? Send the aid directly to the people that need them rather than have it pass through the hands of the politicians.
Problem of course is that's just for sending money and there maybe not enough food in the markets to buy. There's no getting around to having to send food there. Maybe the same system that would be used to receive the crypto donations can be used to track the food packs sent so it'll be easier to account how much of it is getting to the people. Like they can scan the code on the pack with their phone when they receive it.
Maybe once their government remove the ban on fertilizers, those can then be sent there and maybe NGOs can conduct agricultural training to get their food production up.
This is only going to get worse for Sri Lankans. They are in need of food imports and after the government defaulted on loans, who would lend them money now? They'd quickly run out of money buying food and then what happens when that remaining money is gone too? They all gonna starve without aid.
I would say let the people rise up and depose their corrupt leaders and then help restructure after. Just blindly pumping it with aid would only result in the same experience as in Africa where no matter how much aid is sent, nothing really changes since the politicians that are the problem remain in power.
Donations and charity seems to be their best hope. They need to get hold of some celebrities who would be willing to do like concerts for them at this level, that is just an example but at the end of the day we are talking about a situation where all around the world people would need to give them enough money to help them survive.I would say let the people rise up and depose their corrupt leaders and then help restructure after. Just blindly pumping it with aid would only result in the same experience as in Africa where no matter how much aid is sent, nothing really changes since the politicians that are the problem remain in power.
Do you know what is the scariest and worst part? I am so sick and tired of politicians that I have zero idea about their politicians, no idea who their president is, never even wondered about it, and yet I still worry that if we could raise 50+ million dollars for example, all of that would go to helping people out, I fear some of it could be pocketed by some shady politicians. If you can avoid that, they can get better.
In hindsight my comment was kinda harsh but I'm still of the opinion that the people should be pissed off enough to replace their current politicians. As for the actual aid, maybe crypto can help with that? Send the aid directly to the people that need them rather than have it pass through the hands of the politicians.
Problem of course is that's just for sending money and there maybe not enough food in the markets to buy. There's no getting around to having to send food there. Maybe the same system that would be used to receive the crypto donations can be used to track the food packs sent so it'll be easier to account how much of it is getting to the people. Like they can scan the code on the pack with their phone when they receive it.
Maybe once their government remove the ban on fertilizers, those can then be sent there and maybe NGOs can conduct agricultural training to get their food production up.
During the pandemic, Sri Lanka experienced a major crisis with rising global fuel costs adding to Sri Lanka's woes. Sri Lanka earned nearly US$4 billion (approximately Rp. 57.2 trillion) from tourism in 2019. That's a 90% drop due to the pandemic and Sri Lanka's biggest revenue comes from tourism, but Covid-19 has crippled its biggest financial earner as international flights are suspended.
First of all, it is a government, not like they are a company that can go bankrupt, they are there, they may not be able to pay right now, but that doesn't mean that you can't give them any loans in the future because they may get better after this situation. Secondly, we are talking about having some debt even after this, they are not reaching to zero, they are defaulting on some debt, but they still have some more debt left that they will pay, which will help them gain some credit again.
No, they are not paying anything. Theoretically, they are bankrupt because they have a large sum of debt that they need to pay but they don't have that much reserve left. Their loan is more than 70% of their reserve and you are talking about getting better in time. But how they will do that when they can only offer trade through their native currency which no one will accept. International trade is mostly done with USD which they do not have right now.
No companies will occupy and sell their natural resource to get back their loan. Sri Lanka can not pay their debt by itself but lender by organizations and countries will take it anyway. So the only losing side is Sri Lanka.
The impact of inflation made the economy of Sri rare difficulties and experienced serious problems, several years ago Sri Rare also experienced the same problem, the difficulty of paying debts, and I was sure when Sri Rare could not pay debts, they would sell assets such as ports, airports and so on.
This is only going to get worse for Sri Lankans. They are in need of food imports and after the government defaulted on loans, who would lend them money now? They'd quickly run out of money buying food and then what happens when that remaining money is gone too? They all gonna starve without aid.
I would say let the people rise up and depose their corrupt leaders and then help restructure after. Just blindly pumping it with aid would only result in the same experience as in Africa where no matter how much aid is sent, nothing really changes since the politicians that are the problem remain in power.
Donations and charity seems to be their best hope. They need to get hold of some celebrities who would be willing to do like concerts for them at this level, that is just an example but at the end of the day we are talking about a situation where all around the world people would need to give them enough money to help them survive.I would say let the people rise up and depose their corrupt leaders and then help restructure after. Just blindly pumping it with aid would only result in the same experience as in Africa where no matter how much aid is sent, nothing really changes since the politicians that are the problem remain in power.
Do you know what is the scariest and worst part? I am so sick and tired of politicians that I have zero idea about their politicians, no idea who their president is, never even wondered about it, and yet I still worry that if we could raise 50+ million dollars for example, all of that would go to helping people out, I fear some of it could be pocketed by some shady politicians. If you can avoid that, they can get better.
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