Discussion in 'World Events' started by Saint, Jul 10, 2022.
Why is Sri Lanka bankrupt?
Log in or Sign up to hide all adverts.
Here's a brief explanation:
▸"EXPLAINER: Why Sri Lanka’s economy collapsed and what’s next". Associated Press. 10 July 2022. https://bit.ly/3PbMBBO
massive long term corruption and obvious very bad management
some claims say the recent tax cuts to win voters is to blame
but that just made it all worse
tourism was wiped out by covid and they have a very corrupt monetary system soo all that tourism would have been black market cash and not being properly taxed and put into the bank.
so as soon as the black money stopped
the entire system collapsed because the entire system was set up to exploit black market cash.
There was long time corruption and socialist government, so generally there was bad management.
Easter Sunday attacks
Some 270 people were killed, including at least 45 foreign nationals and some 500 were injured, as 3 churches and 3 luxury hotels were hit in a series of coordinated Islamist terrorist suicide bomb attacks on 21 April 2019.
This scare tourists and then came the covid epidemic, which lead to diminishing foreign currency so the socialist government had stupid idea to save expenses for import of fertilizers by banning import and going full "bio". This backfired and crops were crippled. This combination was the fatal blow to economy, which simply break down.
Combination of corrupt and stupid socialist government and islamist terrorism is having quite hard impact on country.
Most people in Sri Lanka are Buddhist, anything to do with religion?
Why religion cannot influence people to behave good?
I don't know, Saint. What do you think?
Yes, you are right. On the other hand it is sufficient to have only small minority of islamists (terrorists) and you get a lot of problems.
Another related problem is mainstream media covering up the problem with islamists (terrorists).
I dont think a country can become banckrupt like a business can.
It can run default but there is no international law that can force a country to pay his debts.
Why Sri-lanka runed default is due to many causes, but there is a initial cause : The debt.
After the country has faced difficulties due to loss of tourism, rating agencies have caused the change of the credit rates (around 15% if i good remember)
Sri-lanka needed therfore more income to refund the credit of the debt, but unfortunatly they had less income...
This is a lockdown system that finalize the "bankrupt" of a country already facing economic difficulties.
Now, the MFI decide of the politic of the country, or they will never again be able to have a healthy economy.
This imply, like for Greece, selling for nothing all the properties of the country (airports, ports, roads, national society etc etc).
Greece is better, it is in Euro zone.
But Sri Lanka has no backup.
Whoever becomes president or prime minister cannot do anything significant.
Unless tourists come back with their low currency, a US dollar can change a lot local currency.
Now Lebanon is as worse as Sri Lanka.
Separate names with a comma.