Sri Lanka's worst economic crisis since Independence explained - IN PICS
Sri Lankan President Gotabaya Rajapaksa has declared a public emergency amidst a spate of protests over the worst economic crisis the country has ever seen.
Sri Lankan President Gotabaya Rajapaksa has declared a public emergency amidst a spate of protests over the worst economic crisis the country has ever seen.
Rajapaksa issued a special gazette notification on Friday, declaring a public emergency in Sri Lanka with effect from April 1.
On the President's command, Secretary to the President Gamini Senarath issued the Extraordinary Gazette Notification.
The emergency comes at the backdrop of violent protests that were erupted outside the residence of Rajapaksa on Thursday as hundreds of demonstrators gathered there and demanded his resignation for what they called his failure in addressing the worst economic crisis in Lanka.
Several people were also injured in the chaos after the authorities used tear gases and water to disperse the crowd.
Sri Lanka is presently reeling from one of the worst economic crises.
What is the behind the economic crisis that Sri Lanka is facing?
Sri Lanka, the country which largely depends on foreign essentials, is witnessing its worst economic breakdown since independence triggered by an acute lack of foreign currency to pay for even the most essential imports.
The nation has been unable to pay for fuel shipments because of a foreign exchange shortage due to which long power cuts have been imposed triggering a massive violent protest across Colombo.
Police arrested 53 people and then imposed a curfew in and around Colombo on Friday to contain other sporadic protests.
How did Covid-19 aggravate the economic crisis in Sri Lanka?
What is the cause of Sri Lanka's economic crisis?
As per the experts and critics, the root cause of this unprecedented crisis lies in economic mismanagement by successive governments that created and sustained a twin deficit – a budget shortfall alongside a current account deficit.
This apart, the issue was accelerated by deep tax cuts promised by the Sri Lankan president during a 2019 election campaign that was enacted months before the Covid-19 pandemic, which wiped out parts of Sri Lanka’s economy.
What is the condition of Sri Lanka's foreign debts?
As of February, Sri Lanka was left with only $2.31 billion in its reserves but faced debt repayments of around $4 billion in 2022.
In a review of the country’s economy released last month, the IMF said that public debt had risen to “unsustainable levels” and foreign exchange reserves were insufficient for near-term debt payments.
13-hour long power cut in Sri Lanka amid worst economic crisis
The unprecedented economic crisis forced the Sri Lankan government to impose power cuts from up to 10 to 13 hours as the country struggles to procure fuel.
Angered by shortages of fuel and other essential items, hundreds of protesters on Thursday clashed with police and the military outside Rajapaksa`s residence as they called for his ouster and torched several police and army vehicles.
India is helping Sri Lanka during the economic crisis
Sri Lanka to discuss loan possibilities with International Monetary Fund (IMF)
After resisting experts' advice to seek help from the IMF despite rising risks for months, the Sri Lanka government has finally prepared a plan to approach the IMF in April.
The IMF will initiate discussions with Sri Lankan authorities on a possible loan program in “coming days”, an IMF spokesman told Reuters.
