Sri Lanka Economic Crisis is Getting Worse - page 5.

stompix

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Quote from: Bttzed03 on July 21, 2022, 11:37:09 PM

If you knew they can't afford it from the start, Sri Lanka's leaders most likely knew that as well.

Why are you so sure about that?
I can tell in a second that a random girl hitting on me with pics of money and crypto on her Instagram profile wants to scam me, thousands are not getting it even after they sent money and are not getting a dime back and they still try to message her to meet her in real life!

How many have fallen for the Akon city project? How many really believed the Volcano city in Salvador will be built with 500 million?

It's the same here, maybe they've believed it could be done, maybe they believed it would be profitable, maybe they used it to show people they are not getting left behind and during their reign, they've built stuff, maybe they tried themselves to screw the Chinese investors over this.

Quote from: Bttzed03 on July 21, 2022, 11:37:09 PM

https://thediplomat.com/2020/01/the-hambantota-port-deal-myths-and-realities/
https://thediplomat.com/2019/05/is-sri-lanka-really-a-victim-of-chinas-debt-trap/

From the article itself:

Quote

However, these facts do not justify the Mahinda Rajapaksa government’s decision to construct the port using foreign loans obtained at higher interest rates at a time when the country was in dire need of fiscal consolidation.~~~ What must be remembered is that the government is still obliged to pay a little over $100 million every year as loan repayments pertaining to the Hambantota port project.

Loans, loans at higher interest than the market, a project that is useless, how do you define a debt trap if this ain't one?
I don't know how much they got paid for this, I don't know how much the bribe was, I don't know why they did it if it's not money, but I know what this is!

Bttzed03

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Quote from: stompix on July 21, 2022, 11:05:18 AM

Quote from: Bttzed03 on July 21, 2022, 04:25:44 AM

I wonder why a lot of people are pinning this debt trap to China only when their lending only amounts to 10% of Sri Lanka's Foreign debt? Other sources claim that the figure is up to 26% if you add the amounts owed to Chinese banks. Regardless, this 'China debt trap' sounds more like a propaganda to hide the economic mismanagement of Sri Lankan leaders and paint China as evil (again).

Yeah right, propaganda...
That is the overall debt in the loans Sri Lanka has taken from various entities.

The debt trap refers to things like projects that were constructed by Chinese companies that Sri Lanka never afforded at all, like the whole fiasco where after allowing the Chinese to extend the port of Hambantota for billions while the port was seeing only a few vessels per month, so in order to pay for the debt risen though the construction they had to lease it for free for 99 years to China, in Colombo they had to give them 40-year tax relief for another billion.
The international airport in Mattala, $190 million from a Chinese bank, the airport is no longer having any international routes aside from Abu Dabhi.

You will not see those billion in the graphic since it's not a state-issue bond or debt.

If I scam you with a scheme and you're forced to come up with 10 000 euros which you borrow from the bank, who is to blame for your debt, the bank which holds your debt or me, the one that caused your loss in the first place?

If you knew they can't afford it from the start, Sri Lanka's leaders most likely knew that as well. Why did they agree in the first place? Were they forced to accept the offer of Exim Bank of China to fund the construction of the port or the other projects you mentioned? That's what I do not get because it's they who gambled on these commercial loans and thought it will bring in more money to their economy. The loan terms and conditions were not hidden from them.

About the 99-year lease, they got $1.12 billion from China Merchants Port Holdings Company Limited (CM Port) for 70% share of the port. From what I read, they didn't even use all that money to pay off debts owed to Exim bank.

https://thediplomat.com/2020/01/the-hambantota-port-deal-myths-and-realities/
https://thediplomat.com/2019/05/is-sri-lanka-really-a-victim-of-chinas-debt-trap/

Sithara007

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Quote from: Cling18 on July 21, 2022, 12:15:10 PM

Their corrupt government officials also took advantage of the pandemic that increased the debt of Sri Lanka and yes, they're the most responsible for the crisis happening in their country. The sad part is, that innocent people are paying for their debt and suffering because of their corruption. We can't blame the people who are protesting because they're fighting for their rights. If their country's crisis will get worse, their economic situation might collapse in the future.

All across the world, there is a new pattern of governments going populist. They are showering freebies on the population so that they can remain in power, at the expense of weakening economy and national currency. I have seen the same pattern here (in India) as well. The ruling coalition is known for it's fiscally conservative policies, but after a string of electoral defeats at state-level, they also resorted to giving cash and other freebies to the local population. It worked for them electorally so far, but the economy has taken a hit. But over the time, people become more and more demanding. The same set of freebies will not work in the long term. You need to make them more attractive with every passing year.

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Quote from: naira on July 09, 2022, 04:26:50 PM

https://iili.io/wAT5es.png

Quote

“Today in this country we have a fuel crisis, a food shortage, we have the head of the World Food Program coming here and we have several matters to discuss with the IMF,” Wickremesinghe said. “Therefore, if this government leaves there should be another government.”

Saturday the 9th of July the Sri Lankan palace finally became the final point where everything broke and was unavoidable. The crisis that befell this country is getting more and more unstoppable, plus the impact of the pandemic and the death of the tourism industry due to terrorist attacks in 2019. Protesters burst into the palace. Sri Lanka's president and prime minister inaugurated himself and fled by plane.

Some of Sri Lanka problems which I summarize as follows:

Debt swells to $51 billion
Corruption has increased dramatically
High imports to meet needs are not supported by exports to global markets
Gasoline out of stock
Breakthrough inflation reaches 60%
Civil servants are not paid
Power failure
School closed
Hospitals as health facilities are also collapsing
Silenced freedom of speech, and
People experience experiences from all sectors, especially the economy in supporting their daily needs (food, drink, clothing, and housing).

From this incident, a corrupt government that only cares about personal interests on the basis of ambition will lead to destruction. An unbalanced economic system and uncertainty about campaign promises are the main weapons.

What do you think about the economic crisis in Sri Lanka?

Source:

It seems clear that an economic crisis can have many effects on different populations. For Sri Lanka, the 2019 crisis has hit the people hard as inflation of basic goods and currency depreciation has left 7 million people there as 'invisible poor'

Although a particular example of this economic crisis may have occurred in Sri Lanka which you raised as a topic, this, but this impact is also not only in that country but also in other countries in my opinion.

Frankolala

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Sri Lanka people are really suffering base on their current situation which was caused by corrupt leaders.I really feel for them but still happy they have stand up as one to fight out bad government.
I hope this should be an example for other countries especially the third world countries that are been led by bad and corrupt government who loots the country funds for themselves and their family alone to come together in one voice saying no to bad government,if not they will not only suffer hardship but their children and grand children will also suffer it.
May God help Sri Lanka restore their country and a pandemic like covid 19 shouldn't break out anymore.

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Quote from: rahmad2nd on July 21, 2022, 09:59:52 AM

Quote from: naira on July 09, 2022, 04:26:50 PM

From this incident, a corrupt government that only cares about personal interests on the basis of ambition will lead to destruction. An unbalanced economic system and uncertainty about campaign promises are the main weapons.

What do you think about the economic crisis in Sri Lanka?

sri lanka is currently in a very difficult situation, a severe economic crisis has destroyed the lives of people in the area, is it true that the main cause is the accumulated debt? I don't think debt caused Sri Lanka's crisis, but it was the crisis that made Sri Lanka unable to pay its debts.

I think there is a long chain that made Sri Lanka experienced the worst crisis, Sri Lanka experienced a prolonged conflict that hampered its economic growth, and 19% of its revenues depended on tourism and the COVID-19 pandemic hit the tourism sector hard.
and the cause most responsible for the crisis that occurred was a corrupt government

Their corrupt government officials also took advantage of the pandemic that increased the debt of Sri Lanka and yes, they're the most responsible for the crisis happening in their country. The sad part is, that innocent people are paying for their debt and suffering because of their corruption. We can't blame the people who are protesting because they're fighting for their rights. If their country's crisis will get worse, their economic situation might collapse in the future.

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Quote from: Smack That Ace on July 20, 2022, 09:31:41 PM

Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Quote from: btc_angela on July 20, 2022, 05:05:59 AM

Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

Sri Lankans currently experience inflation of nearly 60%, which is horrendous. A government with no political experience and too stupid to borrow from China and fall into their debt trap. The national budget no longer has foreign currency to import food, petrol and fertilizer. I think the people are suffering a lot because they don't have enough materials and food to live. The new government is negotiating with China and the IMF, hoping they will soon receive help and the new government will rebuild the country.

Aside from no experience, they have also fallen into the China's sweet words and made the government officials become greedy about the money they could get instead of using it to improve their economy or make infrastructure that could summon people who needs work. Now look at Sri Lanka, the officials are fleeing instead of getting arrested to make them pay on what they had done to their own country.

I hope this new government can really make some ammends or negotiate with China and IMF again to help them recover from mud.

stompix

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Quote from: Bttzed03 on July 21, 2022, 04:25:44 AM

I wonder why a lot of people are pinning this debt trap to China only when their lending only amounts to 10% of Sri Lanka's Foreign debt? Other sources claim that the figure is up to 26% if you add the amounts owed to Chinese banks. Regardless, this 'China debt trap' sounds more like a propaganda to hide the economic mismanagement of Sri Lankan leaders and paint China as evil (again).

Yeah right, propaganda...
That is the overall debt in the loans Sri Lanka has taken from various entities.

The debt trap refers to things like projects that were constructed by Chinese companies that Sri Lanka never afforded at all, like the whole fiasco where after allowing the Chinese to extend the port of Hambantota for billions while the port was seeing only a few vessels per month, so in order to pay for the debt risen though the construction they had to lease it for free for 99 years to China, in Colombo they had to give them 40-year tax relief for another billion.
The international airport in Mattala, $190 million from a Chinese bank, the airport is no longer having any international routes aside from Abu Dabhi.

You will not see those billion in the graphic since it's not a state-issue bond or debt.

If I scam you with a scheme and you're forced to come up with 10 000 euros which you borrow from the bank, who is to blame for your debt, the bank which holds your debt or me, the one that caused your loss in the first place?

rahmad2nd

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Quote from: naira on July 09, 2022, 04:26:50 PM

From this incident, a corrupt government that only cares about personal interests on the basis of ambition will lead to destruction. An unbalanced economic system and uncertainty about campaign promises are the main weapons.

What do you think about the economic crisis in Sri Lanka?

sri lanka is currently in a very difficult situation, a severe economic crisis has destroyed the lives of people in the area, is it true that the main cause is the accumulated debt? I don't think debt caused Sri Lanka's crisis, but it was the crisis that made Sri Lanka unable to pay its debts.

I think there is a long chain that made Sri Lanka experience the worst crisis, Sri Lanka experienced a prolonged conflict that hampered their economic growth, and 19% of their revenues depended on tourism and the COVID-19 pandemic hit the tourism sector hard.
and the cause most responsible for the crisis that occurred was a corrupt government

DrBeer

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Quote from: Bttzed03 on July 21, 2022, 04:25:44 AM

I got more curious about the debt trap and decided to check their external debts per lender.

I wonder why a lot of people are pinning this debt trap to China only when their lending only amounts to 10% of Sri Lanka's Foreign debt? Other sources claim that the figure is up to 26% if you add the amounts owed to Chinese banks. Regardless, this 'China debt trap' sounds more like a propaganda to hide the economic mismanagement of Sri Lankan leaders and paint China as evil (again).

You gave a great example of what information is worth checking! And what is surprising - as soon as you check it - the reality becomes completely different! Very many and very often, instead of admitting the reality, and sometimes their guilt, they begin to look for the guilty ones. People tend to "throw" their problems, which they themselves have created, onto others. This makes it easier to bear your shortcomings. And what about the rulers, especially corrupt or thieving!?
In a word, thanks - another myth ("China is to blame for everything") has been debunked! Cheesy

ultrloa

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Quote from: naira on July 20, 2022, 09:50:12 AM

Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

The core port of Sri Lanka has actually fallen into the hands of China due to debts they cannot pay. Here Sri Lanka is applying for a loan to the IMF with what guarantee? nothing wrong but it will go back to the decision of the court if Sri Lanka has a new president automatically the president-elect must be prepared to bear a much heavier burden than before. How can the economic improvement still fail and just give birth to a boomerang? The Sri Lankan people are afraid of the crisis, and are rushing the Presidential election, pressing to fix everything from scratch.

We know what the end will be like?

They are not taking any loan again on any country including IMF since no one will surely let them borrow money again because they know that they cannot pay and Sri Lanka still in huge trouble. What I mean there is Sri Lanka government is talking about their existing loan and settle this maybe they want to freeze the interest so that they will not drown on huge debt. Their new government will surely get a huge problem because the expectation will be so high on them.

Bttzed03

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I got more curious about the debt trap and decided to check their external debts per lender.

I wonder why a lot of people are pinning this debt trap to China only when their lending only amounts to 10% of Sri Lanka's Foreign debt? Other sources claim that the figure is up to 26% if you add the amounts owed to Chinese banks. Regardless, this 'China debt trap' sounds more like a propaganda to hide the economic mismanagement of Sri Lankan leaders and paint China as evil (again).

DrBeer

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Quote from: Smack That Ace on July 20, 2022, 09:31:41 PM

Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Quote from: btc_angela on July 20, 2022, 05:05:59 AM

Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

Sri Lankans currently experience inflation of nearly 60%, which is horrendous. A government with no political experience and too stupid to borrow from China and fall into their debt trap. The national budget no longer has foreign currency to import food, petrol and fertilizer. I think the people are suffering a lot because they don't have enough materials and food to live. The new government is negotiating with China and the IMF, hoping they will soon receive help and the new government will rebuild the country.

For some reason, I have a strong assumption that the problem of Sri Lanka, similar to what we have in Ukraine, took place from 2010 to 2014. The corrupt and thieving government of Yanukovych took money from Russia to create the appearance of "stability". Social payments were paid for this money, the exchange rate was artificially maintained, and most of the credit funds flowed into the pockets of Yanukovych's entourage. As a result, at the end of 2013, there was almost no money left in the budget ... In Sri Lanka, the president turned out to be more agile and smarter than our Yanukovych, he fled himself, did not wait for the people to endure him ...

Smack That Ace

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Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Quote from: btc_angela on July 20, 2022, 05:05:59 AM

Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

Sri Lankans currently experience inflation of nearly 60%, which is horrendous. A government with no political experience and too stupid to borrow from China and fall into their debt trap. The national budget no longer has foreign currency to import food, petrol and fertilizer. I think the people are suffering a lot because they don't have enough materials and food to live. The new government is negotiating with China and the IMF, hoping they will soon receive help and the new government will rebuild the country.

DrBeer

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Quote from: naira on July 20, 2022, 09:50:12 AM

Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

The core port of Sri Lanka has actually fallen into the hands of China due to debts they cannot pay. Here Sri Lanka is applying for a loan to the IMF with what guarantee? nothing wrong but it will go back to the decision of the court if Sri Lanka has a new president automatically the president-elect must be prepared to bear a much heavier burden than before. How can the economic improvement still fail and just give birth to a boomerang? The Sri Lankan people are afraid of the crisis, and are rushing the Presidential election, pressing to fix everything from scratch.

We know what the end will be like?

It turns out that China, not so good, is doing such evil, worse than the IMF? Or simply someone could not effectively dispose of credit funds?
Tell me, does the population of Sri Lanka have understanding and information, for what purposes were Chinese loans spent by the Sri Lankan government?
Did these funds go to the development of the economy or its sectors, or were they "leaked" into pensions and salaries and pockets of corrupt officials?

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Quote from: btc_angela on July 20, 2022, 05:05:59 AM

Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

It was really unfortunate that the people of Sri Lanka had to go through these hard time and surely nobody living in this planet would want the same situation. I understand that they are so pissed in their government and totally resent the officials that's why they protested for over 3 months and fortunately the President resigned but the people was not fortunate enough because they had to go through the result of President's wrong choices as of this moment.
There is always a chance that Sri Lanka could rise again but that needs time, several years minimum.

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The world is moving to help sri lanka soon, if it is too late there will be many deaths due to hunger, this is a big problem that sri lanka cannot solve alone, forget about debt and for humanitarian reasons it is worth our help.

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Quote from: ultrloa on July 20, 2022, 05:18:13 AM

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

The core port of Sri Lanka has actually fallen into the hands of China due to debts they cannot pay. Here Sri Lanka is applying for a loan to the IMF with what guarantee? nothing wrong but it will go back to the decision of the court if Sri Lanka has a new president automatically the president-elect must be prepared to bear a much heavier burden than before. How can the economic improvement still fail and just give birth to a boomerang? The Sri Lankan people are afraid of the crisis, and are rushing the Presidential election, pressing to fix everything from scratch.

We know what the end will be like?

ultrloa

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Quote from: btc_angela on July 20, 2022, 05:05:59 AM

Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

Provably recovery for this country will take a long time but at least they are now taking action talking with IMF to discuss their loans, Maybe there are first country will help them in future once they put a right person to govern that country. But for now for sure their citizens will suffer from major inflation happening in their country and this should be look as reminder to other country leader to take extra precaution on their actions made especially on economical actions they do.

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Quote from: amishmanish on July 19, 2022, 12:47:48 PM

Srilanka is stuck in a debt trap. Its corrupt politicians sold srilanka to china. The took large loans for development projects, which never really fructified to completion leaving them badly debt ridden. It holds a great lesson for many, never try to grow rich with debt. Their tourism industry was hit by covid, their tea estates were destroyed by too quick transition to organic practices.. They need serious international help..I sympathize with lankans.

That's just the sad state of Sri Lanka and it's very difficult specially at this time to bounce back even if they have a new government, whether interim or they will go on the right process to elect a new one.

Yes, we, sympathized with them, we don't what that to happen to our country and to our government specially that I also lived in a neighboring countries. It's really the fault of the their governance that really bring the country on the collapsed.

Topic: Sri Lanka Economic Crisis is Getting Worse - page 5. (Read 2566 times)