Recently in Colombo, Sri Lanka, the president was chased from his office by protestors after the economy suffered terribly from the war in Ukraine and the Covid-19 pandemic. Ranil Wickremesinghe, his successor, was chosen by parliament but, so far, has done little to ease the economic stress on the country. He has been prime minister six times before, but now faces a daunting task. The country has over a $51 billion debt at the moment, has a massive fuel shortage, and has huge inflation on food. Many are in poverty and the country’s currency’s value has gone down in value.
Most economists agree the only solution for Sri Lanka is to apply for a bailout package from the International Monetary Fund. The IMF agreed and said that the objectives of their support program would be to “restore macroeconomic stability and debt sustainability” as well as protect those in poverty and carry out reforms. People are now seeing Sri Lanka as a warning. Other countries under debt will only continue to face strains.
Sri Lanka was once a success story, with high levels of education and a good standard of living. The pandemic and war ruined the developing country’s future. However, the main factor of this outcome was bad management. Other countries managed to survive the pandemic and war, as they had good management. Sri Lanka’s government banned the use of chemical fertilizers, in an effort to promote organic foods, but this backfired and totally crashed agricultural production. The Ukrainian war was the final blow. From February to May, Sri Lanka’s fuel import cost shot up by over 38%. Food in Sri Lanka went up an insane 80%. Even with the IMF helping, Sri Lanka still has a lot of work to be done.
Most economists agree the only solution for Sri Lanka is to apply for a bailout package from the International Monetary Fund. The IMF agreed and said that the objectives of their support program would be to “restore macroeconomic stability and debt sustainability” as well as protect those in poverty and carry out reforms. People are now seeing Sri Lanka as a warning. Other countries under debt will only continue to face strains.
Sri Lanka was once a success story, with high levels of education and a good standard of living. The pandemic and war ruined the developing country’s future. However, the main factor of this outcome was bad management. Other countries managed to survive the pandemic and war, as they had good management. Sri Lanka’s government banned the use of chemical fertilizers, in an effort to promote organic foods, but this backfired and totally crashed agricultural production. The Ukrainian war was the final blow. From February to May, Sri Lanka’s fuel import cost shot up by over 38%. Food in Sri Lanka went up an insane 80%. Even with the IMF helping, Sri Lanka still has a lot of work to be done.
