{"id":81862,"date":"2022-05-02T09:00:00","date_gmt":"2022-05-02T14:00:00","guid":{"rendered":"http:\/\/www.shotinthedark.info\/wp\/?p=81862"},"modified":"2022-05-01T19:55:03","modified_gmt":"2022-05-02T00:55:03","slug":"as-goes-sri-lanka","status":"publish","type":"post","link":"http:\/\/www.shotinthedark.info\/wp\/?p=81862","title":{"rendered":"As goes Sri Lanka?"},"content":{"rendered":"\n

Sri Lanka is far away, it’s not an especially large country, but current events there may have lessons for us here at home.

Over the weekend<\/a>, Sri Lanka\u2019s president, Gotabaya Rajapaksa, agreed to remove his brother, Mahinda, as Prime Minister. The Rajapaksa brothers have been at the top of Sri Lanka’s government for nearly twenty years, but this move is the fallout of a serious economic crisis in Sri Lanka that is getting worse.

Sri Lanka’s 26-year struggle against the Tamil Tigers ended in 2009. (At the time, Mahinda was President and Gotabaya was Defense Minister.) That civil war was extremely costly, and the roots of the current crisis go back to the struggle to recover from the civil war. Sri Lanka borrowed what for it was a great deal of foreign money. Today, debt has reached well over 100% of GDP. Combined with a series of tax cuts under President Gotabaya a few years ago, Sri Lanka’s ability to pay back its debt became increasingly difficult.

Beginning in 2019, two shocks served to push Sri Lanka closer to the edge. The Easter bombings in April 2019 targeted several churches and hotels and killed 265 people. The Islamic State claimed responsibility for the suicide bombings. In the aftermath tourism, which is an important industry in Sri Lanka and and brings in a significant amount of foreign dollars which is needed to pay back the foreign debt, declined sharply, putting even more pressure on Sri Lanka’s distressed economy.

Then, COVID hit in 2020 which hurt tourism even more. By February of this year, inflation was running over 17%. There are shortages of fuel and electricity. Predictably, widespread protests broke out in March. On March 31 a large group of protestors tried to get to President Gotabaya’s home. A state of emergency was declared the next day.

Events have snowballed from there. Cabinet members began to resign as the Rajapaksa brothers were unable to hold a unity government together. The value of the Sri Lankan rupee dived, and interest rates have soared.

In mid-April, Sri Lanka said it would default on its foreign debt. Sri Lanka does not have the foreign cash reserves to make the payments due this year. What money Sri Lanka does have is needed for necessities.

Sri Lanka is seeking help from the IMF, and indeed from anyone who is willing. Sri Lanka has talked to India and China about loans as well as fuel shipments. Even medical supplies are starting to experience shortages. The social unrest is not going away any time soon.

Inflation, high debt, rising interest rates, shortages, social unrest. Are we looking into a crystal ball?<\/p>\n","protected":false},"excerpt":{"rendered":"

Sri Lanka is far away, it’s not an especially large country, but current events there may have lessons for us here at home. Over the weekend, Sri Lanka\u2019s president, Gotabaya Rajapaksa, agreed to remove his brother, Mahinda, as Prime Minister. The Rajapaksa brothers have been at the top of Sri Lanka’s government for nearly twenty […]<\/p>\n","protected":false},"author":273926,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-81862","post","type-post","status-publish","format-standard","hentry","category-world"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/273926"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=81862"}],"version-history":[{"count":2,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81862\/revisions"}],"predecessor-version":[{"id":81885,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81862\/revisions\/81885"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=81862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=81862"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=81862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}