By Srinath , 3rd year , Civil Engineering
Even before the President Gotabaya-one of the Rajapaksas in power, could declare an Economic emergency in the State, it was all obvious even to the curious onlookers. Prices of all the commodities have shotup so high making it very difficult for the common people even to satisfy their basic needs. The value of Sri Lankan rupees has gone so down that 1 USD equals to about 202 Sri Lankan Rupees.
Corruption in the system , improper administration and wrong decision making are said to be the reasons for this state on the nation. For a country like Sri Lanka which is having the tourism industry as a major contributor to its income was badly hit after the Easter Blasts of 2019 and the story that followed after is world known that is the pandemic. Adding to all this, the recent decision of the government on banning the use all the chemical fertilizers is seen to be a blunder considering the situation of Lanka. Though on a longer run this is seen as an effective and a healthy plan but sudden introduction of this would lead to decrease in the production and for a country like Sri Lanka which is a major exporter of tea and spices has lost its income from exports due to decreased production. All these summed up together has lead to the worse financial situation in Sri Lanka.
A similar situation of economic collapse in 1986 which led to the split of the USSR . In 1990’S a similar situation affected India. In 1991 due to the effective policies of LPG reforms (Liberalization, Privatization, Globalization) and certain other stringent measures taken by the then finance minister-Dr Manmohan Singh, India was saved from bankruptcy.
Sri Lanka’s Finance minister Basil Rajapaksha has been wanting an helping hand from India right from his visit to New Delhi later in December and also stressed it to the Indian External Affairs Minister Jaishankar later this week to help by the way of a Debt freeze, currency swap and emergency Lines of Credit for importing essentials. As Sri Lanka is important part of India’s “Neighbourhood First” policy, India is more likely to help with its own positive returns and also to hinder the Chinese dominance over the Indian Ocean. Sri Lanka has always been hesitant in borrowings from the IMF and has always made its transactions with China and now as the loam has increased and income has decreased, Lanka its struggling to face its needs. China which had already made huge investments and enjoying benefits in Sri Lanka has feared the world on another colonialisation.
World Bank estimates 500,000 people of Sri Lanka have fallen below the poverty line since the beginning of the pandemic. Inflation hit a record high of 11.1% in November and escalating prices have left those who were previously well off struggling to feed their families, while basic goods are now unaffordable for many. After Rajapaksa declared Sri Lanka to be in an economic emergency, the military was given power to ensure essential items, including rice and sugar, were sold at set government prices. It is expected that Sri Lanka would reach Bankruptcy by 2022. End of day it is the commoners of Sri Lanka left to struggle with the ranging prices and basic needs.
What do you think is the need of the hour? Another Manmohan Singh?!