Topic: Sri Lanka defaults on its $51 billion external debt - page 3. (Read 575 times)

If this news is true, then the culprit of all is corrupt officials and this always happens in countries mismanagement that has put Sri Lanka in a worse economic condition and now they are starting to approach the IMF for new debt, the question is whether their officials are able to fix this worse condition which is more troublesome for the poor

https://www.businesstimes.com.sg/government-economy/sri-lanka-to-seek-us3b-to-stave-off-crisis-says-finance-minister

Despite the widespread protests and violence, the government is refusing to resign. And that is understandable. If the opposition comes to power, then Mahinda Rajapaksa and his cronies will be going to jail. He is not going to resign on his own, and the only chance of a regime change arises only if parliamentarians from his own party refuse to support him. The possibility of something like that happening is very remote, but we are getting some hints. 3 of the MPs have come up with statements clarifying that they are withdrawing support to the government (3 MPs from the Sri Lanka Muslim Council: Faizal Cassim, Ishak Rahuman and M S Thowfeek). Previously the regime had support of 156 out of 225 MPs.

The government should be changed for this.Or else debt can’t be recovered.It may be extreme statement.But it need to be done.Because the new way of approach to the economic will be done by the new government.If the youth of Srilanka get into the parliament,they will do some good changes in the government scheme.The most important one of economic will be changed by the people schemes by government.

The blames for such a situation were upon the politicians, covid-19 and improper governance. The country is small by its area, but densely populated. Some has also mentioned China as a reason for its downfall. Maybe that too can have an impact, because China always tires to be friendly with Sri Lanka so to have an naval base in Sri Lanka as India is just few nautical miles away.

Whenever such situation happens with any country there used to be suggestions of using bitcoin as a way to get out of the problem. Here is there anything possible to be done with bitcoin to overcome the bankruptcy.

It is never a good idea to default on your loans because it would make it incredibly hard to get a loan again. However, sometimes you just need to do it to get better, when you have no other choices left like Sri Lanka.

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.

Economic death spiral.
It started with populism, wanting to cut taxes but they went beyond what the budget could afford, you can't tax cut and at the same time rise incentives for not doing anything, one of the few times the FMI was right, you can't improve the economy by cutting VAT and covering that from money printing, at least if those tax reductions would have gone to production, but no!

Then COVID happen right after a terrorist attack so tourism was destroyed, there was no income and they started printing more and more and somehow managed to get even more debt on the way and of course, the debt was in other currencies not in their own, a little Weimar of their own.

On top of that a few final nails in the coffin, one of the eco madness that, of course, destroyed production of food, making less food per ha and more expensive, that in a country that is beyond the 100th place when it comes to GDP per capita, resulting in the awesome magical trick of losing places beyond that when it comes to GDP PPP, purchasing power, a clear sign of personal finances going down the drain. And more the fact that they still have to finance money-losing projects or they would face far bigger financial losses and workplaces, the textile industry hiccups during covid which left a huge mark last year, this year skyrocketing cotton prices, and so on and on.

Bad decisions were made at the worst possible moment and short term there is no miracle cure, this is far worse than Greece.

they've banned fertilizers in 2019 or so. organic farming is an experimental thing that may went wrong in terms of money.

It's a pity ... I really like Sri Lanka, at least as a tourist country (although the last time I was there was in 2018 or 2019). Beautiful nature, site, people, cuisine...
Unfortunately, I did not follow the development of the situation in the country's economy. What was the reason for this "final"?
It is difficult to recognize Sri Lanka as the most successful country, of course, but somehow I did not observe noticeable problems, at least until 2018/2019. Can anyone name the reasons?

Lankan economy became debt ridden only after they took huge loans for so called infrastructure development from china. They were expecting big gains from projects, but those projects actually never completed.  Moreover the tourism sector also died off during covid. The Ceylon tea estates also suffered greatly due to non availability of fertilizers in recent times.. However during all this period the debts kept mounting, and now they are in a bad debt trap.

Some politicians made money and the country became bankrupt.. This is a classical case when too much greed killed the golden goose

wion report on sri lanka gas troubles https://www.youtube.com/watch?v=ic7cdDFZO6A
you're not among yourselves

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.

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.

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


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

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.

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.



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.

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.

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.  

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.

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.

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

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.