16 May, 2022

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How Is An Economic Crisis Affecting People?

By Harsha de Silva

Dr. Harsha de Silva MP

People across Sri Lanka are struggling to get hold of daily essentials as the country faces its worst economic crisis in decades.

Sri Lanka is mired in public debt after revenue from tourism evaporated in the wake of the coronavirus pandemic. With the country’s foreign currency reserves dwindling and foreign debt payments around the corner, it can barely pay for imports of staple foods, fuel and medicines.

The deepening debt emergency is touching nearly every facet of daily life in Sri Lanka. The Sri Lanka Podujana Peramuna-led coalition government’s decision to devalue the rupee while imposing strict limits on imports has pushed up prices of many key items. Authorities have imposed power cuts. Bakeries have shut down due to a lack of cooking gas. Education authorities recently called off exams indefinitely for school students in one province after printing paper ran out.

A recent $1bn credit line from India to buy food and medicine – part of $2.4bn in assistance from Sri Lanka’s neighbour since January – has given President Gotabaya Rajapaksa’s government a little breathing space. But Sri Lanka is still well short of the money needed to service about $4bn in outstanding debt this year. It has only about $2.3bn in its foreign currency reserves, and is now looking to China and the International Monetary Fund for additional help.

A cabinet reshuffle by Rajapaksa has done little to placate critics, and he remains under pressure from protesters supported by the opposition United People’s Force. Tens of thousands of people joined one demonstration in the capital Colombo, with many demanding that the president resign.

In this episode of The Stream we’ll look at the struggles people in Sri Lanka are facing, how the economic crisis risks undermining the country’s stability, and what happens next.

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Latest comments

  • 5
    0

    Between the mafia family members including Nirupama, they must have over a billion dollars in off shore accounts, real estate around the world, jewelry, art work, and expensive property like hotels and ownership of businesses, and it is time they got the Putin treatment and had all assets frozen.

    • 4
      2

      Dear Brother Harsha,
      .
      I always respect you. To my eyes you are a true politicians, even if the slongan ” all 225 to go homr” attacks you or the like few in the parliament today. You helped them with your experties from the begining on. Hansard is the evidence.
      You did it well. YOu are the first who to have forced them to go to IMF and save the nation from the danger before us. That man with BED PAN style mouth piece – Bandula Baluwardhana never allow truths be heard. Remember ?
      :
      I will write more on this laters. If your AMBULANCE service was not in place – few hundreds of thousands could have lost their lives. You were not given any public honors for that great project.
      .
      Anyways, Rajapakshes political masturbation will be stopped soon, – wait and see, what will come on them soon. It will be crystal clear.

      • 2
        0

        “If your AMBULANCE service was not in place – few hundreds of thousands could have lost their lives. You were not given any public honors for that great project.”

        Yes, we should be big enough to give praise to a job well done!

        This was done when Padeniya and his gang was dead against it …….. saying it’ll be transporting nothing but RAW agents. :)))

        Thank ye lucky stars they didn’t think of saying …….. the ambulances will home-deliver Dr Shafi to sort out pregnant Sinhala women …….. it’s still not beyond them!

  • 3
    1

    I totally agree with what Dr. Harsha has said. The fear is that this is only the tip of the iceberg. Even if Sri Lanka gets enough Fx today the consequence of the current state will be felt years to come.

    Tourism is in a downward spiral and that not because of Covid. Maldives that depends mainly on this is projecting a 10,7 growth and the Rajapaksa’s too are supporting it as most of the family have already left for the Maldives.
    Private sector is getting a beating on three sides, power restriction, import of raw material and cost. Will they be able to meet export demands? Will customers look for other sources.
    Agriculture has already got a beating and farmers support their next season with the funds received from the previous season they are going to have a difficult time is they don’t get assistance from the state. The next season is at hand and the govt does not have a plan.
    I feel for the people.

  • 3
    1

    Harsha,
    .
    You’ve been doing a fantastic job.
    .
    I’ll get back to comment better on this. I think that I read through your article. “think” because I’ve been up all night, but I haven’t looked at all that I must. I appreciate that the bit of video is only part of a much longer discussion. However, it contains what you’ve selected for our attention.
    .
    A bit of good news for me on Friday; my pension had come in.
    .
    Cause for concern; the vast majority of Lankans imagine that if we get rid of the Rajapaksas all will be fine – with the economy as well. Shouldn’t you be warning the public that this just cannot be?
    .

  • 0
    3

    If you and your Jadapalanaya Government of MS & RW had got it right this catastrophe could never have happened.

    • 2
      2

      HP,
      .
      You should be aware of it more than anyone else in our age group (50ties). Besides, you lived in SL longer than anyone of us here. …not an accusation,… but.. many in your age stayed so indifferent leaving the buggers to loot the nation form the day one. If our elders were proactive against looters, things would not have ended up this way as people are caught by today.
      .
      It was the people and srilanken PACHAWAHINIs controlled by Rajapakshe mafia networks brought them back. Remember no interogations with SHIRATHI in terms of Thadjudeen – misterious murder was possible, just because the wicked woman was believed to have said ” If I would be interogated, I will better commit suicide myself” – So the uneducated bastard, SORYSENA never allowed it to continue. Remember also how that iron lady , incharge of the FCID was sacked within an overnight by SORYSENA, … putting the entire blame on RW ?

    • 0
      0

      hanchopancha
      Isn’t slimy Sirisena, the head of your ‘jadapalanaya’, a Rajapakse bum sucker who undermined every move the ruling party was trying to make?

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