Sri Lanka’s Economic Crisis and Corruption
Author: Moksha Muller
Many individuals may argue that the start of Sri Lanka’s economic downfall began during the Covid-19 pandemic and the decline of tourism, others may say it was the 2019 bombings that frightened tourists, but one thing is certain, this is the largest economic crisis that Sri Lanka is facing since its independence in 1948.
Coming into power in 2019, former President Gotabaya Rajapaksa stayed in power until his resignation in July 2022. Slowly his choices over his term culminated in a rise in inflation, a lack of exports, and increasing debt to other countries. Fuel, food and medicine shortages began to occur with a lack of foreign imports – this led to a domino effect regarding their farming ways and the inability to produce their own food. In 2021 Rajapaksa banned chemical preservatives to promote an “organic lifestyle” which led to the descent of the Sri Lankan tea industry, their main export, furthering their decline in monetary funds – by early 2022, Sri Lanka was reaching US$34.8 billion in total debt. Owing to China around $4.7 billion and to India $1.74 billion, the country was falling further and further into debt.
Under a new presidency, Anura Kumara Dissanayake hopes that Sri Lanka will be able to pay back their debts and rise out of the ongoing crisis. The International Monetary Fund (IMF) has stuck a deal in its final stages to help the country get back on its feet and the USA has also given an additional $20 million to support food security to Sri Lankan children and communities.
