Sri Lanka defaults on its $51 billion external debt - page 5.

Hydrogen

legendary

Activity: 2562

Merit: 1441

I think nepal is also on the verge of default.

Quote

Nepal Restricts Imports To Save Cash, Suspends Cenbank Governor

KATHMANDU (Reuters) -Nepal is tightening imports of cars, gold and cosmetics as its foreign exchange reserves have fallen, a central bank official said on Monday, after the government suspended the central bank governor and named his deputy the interim chief.

The Himalayan country’s foreign reserves have been hit by a slump in tourism in Asia during the pandemic, a problem that has also hit Sri Lanka which is going through a crippling economic crisis due to a shortage of tourist revenue and other funds.

https://www.shorenewsnetwork.com/2022/04/11/nepal-restricts-imports-to/

Statistics for disposable income have a tendency to shrink considerably during eras of economic concern. As disposable income is lost, hospitability and tourism sectors are hit the hardest. Naturally places like sri lanka and nepal which rely heavily on tourism would be affected. COVID travel restrictions may also have played a role in declining visitors.

People have criticized me for thinking crypto can solve many problems faced by society. But I can't see a good opportunity for crypto to improve circumstances here. Nepal and sri lanka NFTs? They have beautiful natural wildlife which could be photographed to make NFT art. But if the issue is shrinking disposable income, then art investment would also be on the decline.

fiulpro

hero member

Activity: 1862

Merit: 830

What does the world bank and the rich countries expect? Sri Lanka is not honestly in a corner around since they are already struggling with the Pandemic, have anyone seen the news where Sri Lankan Doctors are right now begging the world for supplies since the government is not able to bear with the burden of the pandemic along with the waves of the war as well. The prices are rising and the inflation is making it harder ofcourse.

The government needs to understand that every country has its own plus points for Sri Lanka would be right next to the ocean - they need to facilitate the tourism industry and at the same time the country has to make sure to produce enough food and crops. The government needs to change how they are working at the moment because they are just going downhill.

so98nn

hero member

Activity: 2086

Merit: 603

Though their families were running the nation I dont think the situation should have been this worst. Well we have living example of Queen Elizabeth United Kingdom, floursihing way amazing than before and prospering each year. They also have kingly family running the whole nation. They have properly sat up all the ministries and full control over every movement in the nation. Could not give more sweeter example than UK.

Srilankan's, actually got into trouble due to that very decision of banning the fertilizer. You can not risk your nation with the most basic stuff needed to survive -food! Thats what they did and fail into trap. Definitely tourism also gone from Srilanka now and worsening the whole situation further. $51 billion is lot of money for small country like Srilanka.

DVlog

full member

Activity: 490

Merit: 212

Quote from: avikz on April 12, 2022, 02:58:59 PM

I wonder why OP didn't mention about Chinese debt. 10% of their entire debt is along with China.

The amount of Sri Lankan debt from various foreign donor agencies and countries is around $12.55 billion.

Asian Development Bank 13%
Japan 10%

China 10%

World Bank 9%

India 2%.

They recently borrowed $250 million from Bangladesh. China accounts for 30% of total foreign investment in China. Large projects such as the port of Hambantota, the port city of Colombo, and the Lakavijaya Thermal Power Plant have direct Chinese investments. China has invested $11 billion in about 50 projects in Sri Lanka.

Quote from: avikz on April 12, 2022, 02:58:59 PM

Sri Lanka has already lost control of Goadar Port to China owing to the debt and now they have declared bankruptcy.

Goadar port is actually located in Pakistan. I think you are talking about Hambantota port which was a joint project with China. The port has so far failed to make any profit as the dividend is much lower than the cost to the port of Hambantota. The Sri Lankan government failed to repay the loan for the construction of the port. As a result, in 2017, the Prime Minister of Sri Lanka gave lease of 99 years to China.[/list]

Freeesta

full member

Activity: 658

Merit: 100

The government hoped that tourism revenue would replenish the country's treasury, but because of the virus, the flow of tourists ended and the country lost profits. During the years of the civil war on the territory of this country, the government tried to regulate the economy, but apparently payments on external debt became too much of a burden for the country. Of course, covid was a big blow!

istiak2277

member

Activity: 728

Merit: 19

KUWA.ai

Quote from: TheCoinGrabber on April 12, 2022, 02:48:33 PM

Quote from: DVlog on April 12, 2022, 06:50:26 AM

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.

avikz

legendary

Activity: 3080

Merit: 1500

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.

TheCoinGrabber

sr. member

Activity: 994

Merit: 302

Quote from: DVlog on April 12, 2022, 06:50:26 AM

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.

Fortify

legendary

Activity: 2688

Merit: 1192

Quote from: DVlog on April 12, 2022, 06:50:26 AM

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.

It is a shame that the world is ruled by a rich elite class who consolidate power and play citizens against each other. It is incredibly easy for democracy to be undermined and looted for the benefit of the few - instead of them allowing many people to live comfortably, some hoard enough wealth to live a thousand lifetimes in extravagance. As you said, often instead of deserving it through hard work or intelligence, it is simply because you were born into a specific family. We put a lot of trust into politicians at the top and have to be on guard constantly, they only have to make a few tweaks in the right conditions before independent institutions which can take them down are gone. It's a sad state of affairs, hopefully Sri Lanka can rid themselves of the scourge of nepotism.

jackg

copper member

Activity: 2856

Merit: 3071

https://bit.ly/387FXHi lightning theory

I don't know if going into default is actually too bad for some countries. It sounds like their assets were being handled badly anyway if investors or their banks couldn't write off the interest payments through covid and take a break from paying it until they were back to a fully operational economy (I think almost every country overleveraged themselves to cope with the pandemic though).

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.

DVlog

full member

Activity: 490

Merit: 212

Quote

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.

Topic: Sri Lanka defaults on its $51 billion external debt - page 5. (Read 572 times)