Economic Crashes in Sri Lanka

Despite being the oldest democratic state in Asia, Sri Lanka is suffering from worse conditions and coping with the massive consequences of economic crises. It has been three years since the country is facing an ongoing crisis, but in the last three months, the situation has worsened. Masses are compelled to come on roads against the dynasty’s family politics of Mahindra Rajapaksa, who ruled for decades in Sri Lanka and made the country bankrupt. The common public is facing unprecedented starvation and access to a three-time meal is becoming challenging, meanwhile, inflation has risen to the sky, prices of daily food items are beyond the reach of common men and the country’s fuel storage is about to run out. On the other hand, the repetitive loss of currency’s value against the dollar which is $1=326 of Sri Lankan currency has multiplied the woes of the islanders. Some events that led Sri Lanka to such a circumstance are trade deficit, low scale tourism, family dynasties politics, corruption, and various other issues. In this critical situation and hottest days of summer, Sri Lankans are on the roads in the wait for a miracle to alter the fate of the country.

Let’s put light on the above issues briefly to unveil the current economic crisis and its root causes. The first and foremost is the trade deficit. When we analyze the import and export records of Sri Lanka, we found a huge gap as the country is largely dependent on the other countries to fulfill its needs. In addition to that, Sri Lanka has banned imports of fertilizer and other luxuries to use pure organic processes for the growth of agricultural products, which did not work effectively and the country’s agriculture dropped to its lowest. This resulted in the import of wheat and tea from other countries which had never happened before causing direct impacts on the economy of the country. Moreover, another important occurrence that became the root cause of this crisis is the sudden tumble in the tourism industry. Being an island, Sri Lanka’s economy mostly relies on tourism as many foreign visitors visit regularly and invest a lot which boosts Lanka’s economy by over 13% every year. But in the last two years due to the COVID pandemic, the tourism industry showed a sharp downfall which massively impacted the economy of the country.

Apart from these, family politics is again a huge barrier to the development of the country. Mahinda Rajapaksa ruled Sri Lanka for decades and only focused on unnecessary constructions which were mere time waste projects. He distributed the opportunities on nepotism based and started to bless his nearest with perks and facilities ignoring the needy and poor class. Because of all the above arguments, Sri Lanka suffered a lot, there is a shortage of fuel, people die in search of medicines, and there is not enough money in the government treasury to import necessary items. In this horrifying situation, the public is on the roads and demand the removal of the corrupt leader, which remained for several days. There are reports of a clash between Rajapaksa followers and protesters as well where several protesters lost their lives, and at last, they successfully deserted the corrupt ruling leader. 

After that, the new minister took charge and ensured the public filled the gaps in requirements, such as food items, fuel, and medicine on an urgent basis, and tried to eliminate the calamity as soon as possible. On this occasion, he also hoped for the neighbors, India, China, and IMF to extend their hands to serve the endangered humanity in this crucial time. As India and Bangladesh have already shown empathy by helping morally and financially to sustain the crashed economy. In this situation, Sri Lanka needs 20 billion dollars to regain its previous economic status which is only possible if the IMF gives a positive response.

Now let me relate the current economic condition of Pakistan with Sri Lanka, where there is no big distinction. Both countries are the passengers of the same boat, in Pakistan, the political dilemma becomes the resistance in the way of development. Similar to Sri Lanka the dollar has crossed 200, inflation is increasing day by day and the process of industrialization and commercial business is moving at the slowest rate. On the other hand scarcity of water and repetitive climate changes are also becoming threatening issues for the country, to combat these there is a dire need for change in policies and awareness of the concerned departments to deal with the issues effectively. If these are not dealt with in a time there are chances of an economic crisis in Pakistan three times denser than in Sri Lanka.

After that, the new minister took charge and ensured the public filled the gaps in requirements, such as food items, fuel, and medicine on an urgent basis, and tried to eliminate the calamity as soon as possible. On this occasion, he also hoped for the neighbors, India, China, and IMF to extend their hands to serve the endangered humanity in this crucial time. As India and Bangladesh have already shown empathy by helping morally and financially to sustain the crashed economy. In this situation, Sri Lanka needs 20 billion dollars to regain its previous economic status which is only possible if the IMF gives a positive response.

Now let me relate the current economic condition of Pakistan with Sri Lanka, where there is no big distinction. Both countries are the passengers of the same boat, in Pakistan, the political dilemma becomes the resistance in the way of development. Similar to Sri Lanka the dollar has crossed 200, inflation is increasing day by day and the process of industrialization and commercial business is moving at the slowest rate. On the other hand scarcity of water and repetitive climate changes are also becoming threatening issues for the country, to combat these there is a dire need for change in policies and awareness of the concerned departments to deal with the issues effectively. If these are not dealt with in a time there are chances of an economic crisis in Pakistan three times denser than in Sri Lanka.

To get rid of this calamity Sri Lanka and Pakistan’s policy should temporarily ban unnecessary import products until the economy gains stability. Secondly, world institutions and leaders such as the IMF, the World Bank, Bill Gates, and Elon musk should come forward and show sympathy to serve humanity.