S
画廊英文
ri Lanka is suffering its worst economic crisis since its independence in 1948.
The ongoing crisis has resulted in collap of the currency, rising inflation, and a vere shortage of esntials, which have led to an eruption of street protests and strikes in many parts of the country. The domestic situation has been ten. On July 5, Prime Minister Ranil Wickremesinghe said in Parliament that Sri Lanka had “gone bankrupt.” On July 9, demonstrators stormed
What’s Next For Sri Lanka
Chronic problems have led to great uncertainty in the South Asian country
By Hu Zhiyong
the presidential palace, the presidential cretariat, and the prime minister’s residence. In the early hours of July 13, President Gotabaya Rajapaksa left the country on a military aircraft. Hours later, Sri Lanka entered a state of national emergency, and curfew was impod in the Western
Province, where the executive and judicial capital Colombo is located.
For quite some time, Sri
Lanka’s foreign exchange rerve has been dwindling alongside high debt and depreciating
currency. The Sri Lankan
government was forced to turn to the International Monetary Fund (IMF) for help. However, due to its over-reliance on international assistance and policy, Sri Lanka has failed to deliver effective development alternatives and has been unable to respond to this unprecedented crisis. Chronic Economic Problems Long-standing economic development problems are the root caus of the current crisis. From the perspective
of economic structure, Sri Lanka’s economy relies heavily on external markets, with agriculture (fishery), primary processing industry, and general rvice industry as pillars,
and tourism as an important source of foreign exchange. The industrial foundation is relatively weak, bad on labor-intensive light industries and with underdeveloped capital markets and technology-intensive industries.
myoshinSri Lanka was the first country in South Asia to implement economic liberalization policy to make stru
ctural adjustments
towards the neoliberal track. In
1978, the government introduced
a free market economy while
actively attracting foreign
investment, establishing free
trade zones, and removing state
control over imports. It also
incorporated privatization and
promoted private enterpris
to create a free economic
environment and gradually
form a market economy system.
This process of liberalization
and deregulation widened the
gap between the rich and the
poor, which exacerbated the
vulnerability of its national
economy.
In large part becau the
Sri Lankan Civil War (1983-
2009) lasted for 26 years,
语the fairly radical neoliberal
economic policy could not be
implemented effectively, and
global capital lost interest in
Sri Lanka. After the end of the
war, Sri Lanka implemented
radical deficit fiscal policy to
restore and develop its economy,
which added more to the burden
of national debt. In total, Sri
Lanka has accumulated about
US$51 billion in foreign debt. In
terms of international trade, Sri
Lanka has had a deficit on its
balance of payments for many
years. In April, the Sri Lankan
government announced that it
would suspend payments on
its foreign debt due to a foreign
exchange shortage.
Failures of domestic
policy over the last four years
accelerated Sri Lanka’s economic
collap. After the Rajapaksa
government took office in 2019,
it introduced significant tax
eventhoughcuts, losing more than US$1.4
billion in annual government
revenues. By the end of 2019, Sri
Lanka’s foreign exchange rerve
was a mere US$7.6 billion.
In early 2021, Sri Lanka
began to suffer a foreign
exchange shortage. In April
2021, the government suddenly
announced an organic farming
program with a ban on the
import of fertilizers, pesticides,
herbicides, and fungicides
to reduce foreign exchange
outflows. The ban resulted
in more expensive farming
that produced only half of
the yield, verely weakening
lf-sufficiency in rice. The
government was then forced to
import grain from abroad at high
印信prices to replenish its rerves,
which only exacerbated the
foreign exchange shortage.
Although the ban was revoked
for certain crops in November,
irreparable damage had already
been done to the production
of grain, tea, and rubber—the
county’s trademark exports.
When the Civil War ended
and the Rajapaksa regime
stabilized, global capital began
to flow into Sri Lanka, making
the Sri Lankan economy appear
strong. Boosted by foreign
capital, Sri Lanka made a large
investment in domestic real
estate which damaged small-
scale agriculture and the lf-
sufficiency rate of grain. State
investment in agriculture has
continuously declined, reducing
the growth rate of agricultural
production.
Impact of External Cris
The global surge of the
COVID-19 pandemic hit the
fragile Sri Lankan economy
hard. Tourism is a key pillar of
the Sri Lankan economy. Before
the pandemic outbreak, tourism
accounted for more than 12
percent of the country’s GDP,
and tourism revenues accounted
for 14 percent of its foreign
exchange. The pandemic caud
a sharp drop in international
tourists to Sri Lanka. In addition,
the remittance of 2 million
Sri Lankan nationals working
overas plummeted, which
further aggravated the foreign
exchange crisis.
The lack of foreign exchange
Fishermen on stilts at dusk, Weligama Beach, South Province, Sri Lanka. (IC PHOTO)Sri Lanka: Foreign Debt Summary
as of end of April 2021 (by major lenders in million US dollars)
47% Market borrowings
16,383.4
13% Asian Development Bank >>4,415.7
10% China 3,388.2 10% Japan 3,360
9% World Bank 3,230.9
9% Other
>>3,038.5
2% India 859.3
Source: Department of External Resources, Sri Lanka
for imports became a “catalyst,” worning problems such as fuel shortages, drug shortages, power
outages, and rising food prices.
nba什么意思The Russia-Ukraine conflict and Western sanctions have led to soaring international oil and gas prices, which has had a vere impact on the Sri Lankan economy and people’s lives. Both Russia and Ukraine are important trading partners of Sri Lanka and important markets for exported Sri Lankan tea. What’s more, they are important sources of international tourists to Sri Lanka. The Russia-Ukraine conflict has not only blocked normal trade between Sri Lanka and the two countries, but also led to soaring grain and energy prices in the international market. Sri Lanka has been left trapped in a desperate situation of spiking prices of food and energy imports, a hard-hit
tourism industry, and a foreign exchange shortage. Crisis Respon
The current crisis in Sri Lanka is the combined effect of a ries of factors. It not only reflects the chronic deep-rooted problems of Sri Lanka during its process of economic development, but also the risks and difficulties that small and medium-sized countries must navigate to facilitate social and economic development in a complex and volatile international economic and political environment. Sri Lanka is an important participant in the Belt and Road Initiative (BRI). China’s generous assistance has directly promoted infrastructure improvement and socio-economic development in Sri
音标发音48个教学视频Lanka. Despite its large debt deficit, the debt Sri Lanka owes China is not the root cau of the current crisis, contrary to what some Western media have alleged. In reality, loans from China for BRI projects account for only 10 percent of Sri Lanka’s total foreign debt. China is also a potential victim of Sri Lanka’s
debt crisis.
In a July 15 media interview, Sri Lankan Ambassador to China Palita Kohona said that the
World Bank, Asian Development Bank, and Western institutional investors are currently Sri Lanka’s largest creditors. “We owe
Western institutional investors a lot of money, including Wall Street,” said the ambassador. He said that Sri Lanka hopes that the World Bank, Asian Development Bank, and other institutions would step up with a package to solve the country’s debt problem. “We also encourage countries including India, Japan, and China to offer us more aid,” he added. “We need help from our friends to get out of the current predicament.”
Thousands crowd the capital for a look into the president’s palace two days after protesters
stormed the building in Colombo, Sri Lanka, on July 11, 2022. (THILINA KALUTHOTAGE)
Drivers wait to buy fuel at a petrol station due to a fuel shortage in Colombo, capital of Sri Lanka, on May 21, 2022. (PRADEEP DAMBARAGE)
Sri Lanka hopes that the World Bank, Asian Development Bank, and other institutions would step up with a package to solve the country’s debt problem.英译中翻译器
内部控制与风险管理People buy vegetables at a market after the ongoing curfew is relaxed for a few hours in Colombo, c
apital of Sri
过错的意思
Lanka, on May 12, 2022. (ISHARA S. KODIKARA)
China hopes that Sri Lanka will escape the turbulence, solve the chronic problems, and get back on track as soon as possible. According to China’s Ministry of Foreign Affairs, in April and May 2022, the Chine government announced that it would provide emergency humanitarian assistance worth 500 million yuan (US$74 million) to Sri Lanka, the largest amount of free assistance for Sri Lanka since the beginning of this crisis. On July 14, the cond round of emergency humanitarian food assistance provided by China was delivered to Sri Lanka.
On July 12, Chine Foreign Ministry spokesperson Wang Wenbin said that China would continue providing assistance for the economic and social development of Sri Lanka and supporting its efforts to revive the economy and improve its people’s livelihoods. “As to Sri Lanka’s debt to China, China supports relevant
financial institutions in having consultations with Sri Lanka to ek a proper ttlement,” Wang said. “China stands ready to work with relevant countries and international financial institutions and will continue to play a positive role in helping tackle Sri Lanka’s current difficulties, ea its debt burden,
and achieve sustainable development.”
How should Sri Lanka deal with this crisis?
First, stabilize the situation as soon as possible. Sri Lanka should take the crisis as an opportunity to organize an all-party unity government, t
aside prejudices, and improve its governance capacity. It should also work to restore social and economic order to overcome difficulties and climb out of the crisis as quickly as possible. Second, fundamentally, it’s necessary for Sri Lanka to carry out both institutional and structural reforms to diversify its over-reliance on tourism and exports and reduce or eliminate
over-reliance on the single market.
Third, Sri Lanka should ek support and assistance from
other countries and international financial institutions to accelerate debt restructuring and actively apply for short-term loans to reduce the pressure of debt payments.
In addition, the government can consider lling asts
while cutting any extravagance. Government budgets and expenditures can be reduced so that the limited financial resources can be applied to the most urgently needed projects to improve the national economy and people’s livelihood. The future of Sri Lanka depends on the formation and functioning of the new government. Due to chronic problems, the evolving situation in the country remains highly uncertain.
About the author Hu Zhiyong is a rearch
fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences.
