The Sri Lanka Crisis ...

[MABinPengChau]

Meanwhile, Sri Lanka is literally bankrupt, 70 percent inflation by the end of the year (predicted), even the monks are calling for resignation, there is no gas/petrol anywhere and...nothing.

[Grinnie Jax]

Meanwhile, Sri Lanka is literally bankrupt, 70 percent inflation by the end of the year (predicted), even the monks are calling for resignation, there is no gas/petrol anywhere and...nothing.

Sorry, can anyone explain to the noob - where does this come from? What are the reasons? Haven't followed, because already got overinformated with war and all..

[MABinPengChau]

Sorry, can anyone explain to the noob - where does this come from? What are the reasons? Haven't followed, because already got overinformated with war and all..

I have been following for MONTHS on Al Jazeera. There is some ruling pair of brothers, apparently running the country into the ground, have a lot of Belt and Road debt. I watch all these desperate people queuing for gas, yesterday like 80 monks from around the country held a sit in. One prime minister resigned, new one pledging to "turn it around..." I guess since the Easter bombing tourism didn't recover (and...covid)... all very sad.

https://www.aljazeera.com/where/sri-lanka/

[er2]

Sorry, can anyone explain to the noob - where does this come from? What are the reasons? Haven't followed, because already got overinformated with war and all..

It came from a politician actually making good on his promises. The Rajapaksas promised every possible taxcut, every imaginable subsidy, Rainbow ponies for the kids. Sooner or later, money runs out. Much sooner if covid happens at the same time.

[HSY]

I have been following for MONTHS on Al Jazeera

Curious if you have a solution in mind - usually ppl form an opinion on how to fix the situation/or they would have done that and this and that to avert crisis.

I haven't been following but read an article yest after your post and concluded quickly I don't have a good one...sorta same situation for friends who have that money/debt problem. I'm happy to try new ideas if you have one

[MABinPengChau]

Curious if you have a solution in mind - usually ppl form an opinion on how to fix the situation/or they would have done that and this and that to avert crisis.

I haven't been following but read an article yest after your post and concluded quickly I don't have a good one...sorta same situation for friends who have that money/debt problem. I'm happy to try new ideas if you have one

I can barely understand the problem- but the Sri Lankan people want them out, they have about as much love of resigning as Boris Johnson and apparently less party pressure I guess.

[shri]

It came from a politician actually making good on his promises. The Rajapaksas promised every possible taxcut, every imaginable subsidy, Rainbow ponies for the kids. Sooner or later, money runs out. Much sooner if covid happens at the same time.

And a throw in a small debt issue with China + distrust of India due to Tamil legacy..

https://www.theguardian.com/world/20...-lanka-to-ruin

The debt issue is going to play itself out across a lot of the EM as China has its own issues to deal with.

Just read this in a newsletter..

Bloomberg reports that the local government may be allowed to raise $220 billion dollars in special bonds over the remainder of this year, to drive more infrastructure investment to support the economy, but cannibalizing from 2023. It seems highly unlikely this step will get the full year GDP growth rate to the 5.5% target, and if the report is true it is another sign of just how difficult the true economic situation likely is.

[HSY]

I expected the obligatory corruption bit to pop up in the article and nothing. Makes it even more tragic. No solutions for how to conjure up money when you're flat broke from spending all the money you had and borrowed... =/

[ndt]

It came from a politician actually making good on his promises. The Rajapaksas promised every possible taxcut, every imaginable subsidy, Rainbow ponies for the kids. Sooner or later, money runs out. Much sooner if covid happens at the same time.

Add to that delusional policy of going 100% oraganic overnight which turned out to be a breaking point on the ground for grassroot level, the policy ran for almost over a year when fertilizers were not allowed and food/grain productions dwindled hurting the small farmers the most.. Overdue debt payments and B&R debt plus incursion was eroding whatever reserve was left on one hand, going organic mania was killing people on the ground as well as started hurting exports big time, Covid became final nail in the Coffin and everything followed Murphy's law from there..

[HSY]

Bloomberg reports that the local government may be allowed to raise $220 billion dollars in special bonds over the remainder of this year, to drive more infrastructure investment to support the economy

I don't think that's a good idea but...

Bonds. every government's crack cocaine.