Now, in 2022 every other country is reviving from the corona pandemic. Even countries like the US, India, and Russia’s GDPs are also growing.
There is a sign of quick recovery and development of the world economy. Because the corona pandemic is fading away.
As every other country is showing a positive growth trajectory. But Sri Lanka is now facing an economic crisis. Now, the Sri Lanka Economy crisis has become the new spotlight.
Every citizen is starving for food and water in Sri Lanka. Even there are day-long protests from the public. In addition, the damping economy of Sri Lanka makes the condition worse.
Consequently, many Sri Lankans are migrating to the neighboring country India. Many Sri Lankan Migrants are under surveillance by the Indian army.
In this blog, there is an in-depth explanation of the Sri Lanka Economy crisis.
Sri Lanka Economy Crisis Reasons
It is a small country with a slow development process. Even the country is majorly dependent on tourism. However, the Sri Lanka administration became weak by the Rajapaksha government.
Rajapaksha’s government played the main role in the declining economy of Sri Lanka. The government’s bad decisions lead to the economic crisis in Sri Lanka.
Shortage of daily needs
Now in Sri Lanka, there is a shortage of food, fuel, and electricity. The main reason for the shortage is fewer imports. If any country imports any commodities then it should pay in foreign currency.
So, the country should have enough foreign currency reserves. But now the present economic condition of Sri Lanka deteriorating. As of now, there is only $779 million in foreign reserves left with the country. Its foreign currency is declining year on year, it had $2.3 billion in reserves in 2020.
Therefore, its economics are in the worst case. So, many countries are not willing to export commodities to Sri Lanka. The Rajapaksha government is having a tough time now. Even Sri Lanka citizens are protesting and bullying the Rajpaksha inefficient government.
Due to the shortage of electricity, there are 13 hours of supply for the households. Even the government is not letting street lights operate at night.
Riots are going on in Sri Lanka. In this way, Sri Lankans are showing their aggression.
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Inflation in Sri Lanka
On the other hand, the inflation rate is skyrocketing in the country. Due to the lack of commodities, there is a peak increase in the prices of the commodities. Presently, Sri Lanka’s inflation rate is up to 25% increase in 2022.
Primarily there is a shortage of daily needs. On top of that, there is a steep increase in the price of the products. Here are some of the shocking news about Sri Lanka Economy crisis
List of items price due to high inflation
- 1 kg of rice is Rs600 (Sri Lankan rupees)
- 1 kg of sugar is Rs 290
- Cylinder costs around Rs 4200
So, this is the result of inflation in Sri Lanka
International Debts result in Sri Lanka Economy Crisis
There is a lot of burden on the Rajapaksha government due to growing debts. Even the inability to repay them. Now there is a debt of over $4 billion.
But now the government is not in the position of repaying the debts. On top of that, the Rajapaksha government is pleading for debts to meet the people’s needs. Due to the insane level of economic crisis, all the ministers had resigned from the post.
Even there is a ban on social media in the country. Because to avoid sharing the pathetic situation of the country.
Rajapaksha Brothers: Sri Lanka government
Sri Lanka’s government was also inefficient to fight back against the situation. Even their faults are also there. Due their faulty decisions led to the economy’s downfall.
When Gotabaya Rajapksa became president in 2019 he came up with new rules. The rules state that there will be a complete ban synthesis of fertilizers and pesticides.
Rajapaksha government banned fertilizers to enhance and improve organic farming. But their decision had a vast impact on agriculture. After the ban, farmers were not able to get a good yield, which result in the downfall of the produce.
To make any decisions there should be extensive research. But the Rajapaksha government took a quick decision. To make any states’ agriculture chemicals free takes time. Even Sikkim took over 10 years to become a 100% organic farming state.
As a result, Sri Lanka’s agriculture products fall drastically. Prior, the country exported rice and tea but now it needs to import those things. These decisions had a severe impact on the economy of Sri Lanka.
Even the Rajapaksha government took a tax cut decision. As the idea was to promote cash flow in the country. When taxes are reduced then people will urge to buy commodities, and finally, there will be good cash flow within the country.
After the new rule, there was an outbreak of corona pandemic in the country. So, the country’s economy still comes down.
Tourism of Sri Lanka declination
As the country is surrounded by oceans, ports, and historical places is purely dependent on tourism. Sri Lanka tourism contribues ove 15% of the GDP.
But after the outbreak of the corona pandemic, there is a break in tourism in the world. There is no differnet in Sri Lanka also. So there is a decline in the tourist as well.
Prior, there was a series of bomb blasts in Sri Lanka. As a result, 290 people got killed in the incident. The insecurity and bombing incident made tourists stay far.
In this way, the Sri Lanka Economy crisis is going to be more severe further. Even the country was a rich exporter of tea, rice, and rubber from the 1950s. But the country did not diversify in any of the fields. In addition, the government too did not play any significant role to uplift the country’s economy.
Now, India is helping Sri Lanka by giving credit. To slove import the oils, India accepts to give $500 million and another $1 billion for the need of food and medicine. Then China is also giving a $2.5 billion credit line.
So this decision might revive the economy of Sri Lanka.
Sri Lanka Economic Crisis 2022
Sri Lanka economic crisis is one of the most horrible events happening in the world. This is so surprising that our country is just drowning due to a lack of finance. The government and the leaders are just helpless. They are not getting help from neighboring countries and even from foreign countries as well.
So every hook and corner of the country is suffering from the economic crisis. A lot of people are just struggling to buy a piece of bread. Even fuel in the country is also been exhausted in a week. A lot of people were just out on the road and just protesting against the government.
Everyone is just pointing out the Rajapaksha government.
Rajapaksha government is the main reason for the Sri Lanka economic crisis. This government is mainly headed by the Rajapaksha family. According to the report, a political family called Rajapakhsa has over 75000 crores of wealth.
Rajapaksa’s family just looted Sri Lanka tirelessly. All the high positions in the political system August held by the Rajapaksha family.
From 2005 to 2015 Mahinda Rajapaksha was the president of Sri Lanka. During that time, Sri Lanka took a loan from China for building a lotus tower in Colombo and Hambanto Port.
Today gotabaya Rajapaksa is the president of Sri Lanka. So it is all at the will of the Rajapaksha family. Even sports minister of Sri Lanka is Namal Rajapaksha who is the son of Mahinda Rajapaksa.
Basil Rajapaksa is also one of the main ministers of Sri Lanka. Even is often known as the Commission minister. Because he would get the commission from the project undertaken by him. According to the estimate, he would take 10% of the commission.
So Basil Rajapaksha would undertake the project without any research. Only with the viewpoint of the commission. This is one of the main setbacks for Sri Lanka. As a result, there is a horrific economic crisis in Sri Lanka.
Another guy from Rajapaksha, Chamal Rajapaksha irrigation Minister of Sri Lanka. And took some drastic steps for organic farming. Evan band pesticides and fertilizers suddenly. With this Harsh step, Sri Lanka’s agricultural produce was reduced by 50%.
The agricultural product Minister is none other than Chamal Rajapaksha’s son.
All the powerful political positions are with the Rajapaksha family. So it was very easy for them To Loot the money. Since then and they have just spent a lot on unnecessary projects and also bagged e lot of money.
In this way, they brought the economy of Sri Lanka down. And now they have used Debt for China and many other countries. So it is impossible for Sri Lanka to repay the debt.
Sri Lanka people on Rajapaksha House
Sri Lanka people attacked Rajapaksha’s house. Many people have just gone inside the house and taken Money and jewels and shared them among themselves. Even some of them enjoyed the pool.
Almost 6000 people what just broken into Rajapaksa’s house. The video went viral on social media. Even Rajapaksa himself escaped from the attack of people. Now things in Sri Lanka have gotten out of hand. Sri Lanka economic crisis is turning another way around.
Rajapaksa government rules
Rajapaksha frames their own rules so that others can’t harm them directly. The 28 amendment of Sri Lanka says that
No legal proceedings will be taken against the president. So it is very evident that the president can do any illegal things but still there will be no actions will be filed. Rajapaksa government is fooling the Sri Lanka people.
President can appoint any Minister according to their wish. So this gave a superpower for the President to appoint the ministers of his choice. Probably e you would choose chooses those minister who was close to them. This is the reason why the whole Rajapaksha family was in politics.
All the powerful political position was with the Rajapaksha family. These are the rules that have been made by the Rajapaksha government.