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Recently, the president of Sri Lanka himself declared: the country is bankrupt
The president and the prime minister ran away, and there were unprecedented demonstrations among the people, and thousands of people took to the streets, rushed into the presidential palace to release themselves, took pictures and punched in the suites, and splashed water in the swimming pool
Sri Lanka used to be a tourist destination, but after Gotabaya became president, everything changed, first the implementation of "modern monetary policy theory", but also increased the printing of money, not only that, but also mandatory national promotion of organic agriculture, and now the country is bankrupt, insolvent, and even owes China 5.5 billion US dollars, so can Sri Lanka still be saved? What is the impact of its bankruptcy on the international situation? Will the $5.5 billion owed to China be returned?
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Sri Lanka is a tropical island nation in the Indian Ocean, and the whole country has a tropical monsoon climate. Hot all year round, the average annual temperature of 28 °C, the average annual precipitation of 1283-3321 mm ranges, there is no distinction between the four seasons, especially suitable for growing crops, so Sri Lanka's economy is mainly based on agriculture, and the country's most important export product is Ceylon black tea, which has been rated as one of the world's three major tea producing countries
Historically, Sri Lanka was originally known as Ceylon, and according to ancient Chinese records, Sri Lanka also had a lion country, which can be confirmed by the lion statue on Sri Lanka's current flag and national emblem.
Sri Lanka is a multi-ethnic and multicultural country, the main ethnic group is: sinhalese
According to legend, the ancestor of the Sinhalese, Prince Vijaya, a descendant of a North Indian princess and a lion, came to Sri Lanka from the "southern part of the subcontinent" and worked mainly in tea plantations in the central highlands, mainly to solve the problem of Insufficient labor in Sri Lanka.
The Moorish people, MS Lin, came from the Middle East, and Arab merchants and sailors landed along the coast of Ceylon.
At present, the total population of the country, of which the largest Sinhalese account for 74.2%, Tamil account for 15.4%, the second largest group; Moors make up 10 percent, the third largest group, with other groups accounting for 0.5 percent.
It is worth mentioning that here is still a gem-rich island, the most famous is ruby, sapphire and cat's eye are famous in the world, the annual gem export can reach 500 million US dollars, the most famous is still a number of Sri Lanka island scenery, attracting thousands of tourist punchers, Marco Polo saw that this is the most beautiful island, known as the pearl of the Indian Ocean
Such a country with superior geographical conditions, a long history, and rich mineral resources, actually declared the country bankrupt, and some experts predicted that Sri Lanka's economic crisis will continue until the end of 2023, but the domestic oil inventory is only enough for one day, and there is a serious shortage of food, more dramatically, after the president declared bankruptcy, the president and prime minister ran away with state executives, and then a large number of demonstrators rushed into the presidential residence, and the Sri Lankan army shot into the air to prevent protesters from occupying the presidential palace, but finally the presidential palace fell. This brings us to the most shocking side of the history of the fire-filled, pool carnival
Many netizens are sorry for China, saying that China's investment in Sri Lanka in recent years is afraid of indirect water drifting, if it really can't be recovered, this is not a small amount, after all, Sri Lanka and the mainland cooperated with a lot of projects, and each project China paid the most manpower and material resources, in addition, before the mainland also lent Sri Lanka a large amount of loans, according to statistics, the mainland in Sri Lanka has up to 50 billion US dollars of debt and investment, then some people may be curious, With such support from China, how did Sri Lanka go bankrupt? Who was the culprit who led him to bankruptcy? What is the real reason behind it?
Of course, there is also a question that the Chinese people are concerned about, that is, whether there is any hope of recovering those large-scale loans and investments on the mainland
First of all, it is worth mentioning that as early as April this year, Sri Lanka stood on the brink of bankruptcy cliff, when the government first announced that it would stop paying foreign debt with foreign exchange and pay other imported goods, which in layman's terms means that they do not intend to pay off the foreign debt of other countries first, because they cannot get extra money on hand to buy goods, and can only use foreign exchange reserves to pay this money, which is also to alleviate economic pressure
But it turned out that the Sri Lankan government's move to tear down the eastern wall to supplement the western wall did not play much of a role, because by May, the Sri Lankan government had exhausted only $1.6 billion in foreign reserves and a barrier-high foreign debt, and because of its inability to repay the high debt, they had to declare the country bankrupt, which meant that Sri Lanka became the first emerging country to default on its debt this century
Many people wonder what kind of life will the people at home live after a country goes bankrupt.
According to relevant reports, the bus system in Colombo, the capital of Sri Lanka, has collapsed, and the roads are full of various vehicles lined up in long lines
But the Sri Lankan people are not gathering crowds to make trouble, nor are they waiting in line to go out of the city, because everyone present is just waiting for an opportunity to refuel, some people have waited in the same place for three days, but still can't see the hope of refueling, and even some elderly people over sixty years old, because of five consecutive days of queuing, finally died in their own cars, but even so, Sri Lankans for the sake of their families and children, even if the process of waiting is tortured, they are not willing to leave. The reason for this situation is, of course, that the country has exhausted all its fuel reserves
In addition, the government has required people to work from home since June, and stopped offline learning, and what is more painful for locals is that Sri Lanka's inflation rate is still rising, in the face of soaring prices, their incomes have not risen, and even many people have lost their jobs in this social chaos, sadly, this is still the situation of the country's largest capital city, you can imagine how miserable people in other towns in Sri Lanka live
Seeing this, some people can't help but wonder, why did Sri Lanka, which was once a beautiful country, fall into such a field?
You should know that since entering 2022, with the deepening of the situation in Russia and Ukraine, global food and energy prices are rising rapidly, and at the same time include some necessary daily necessities, and Sri Lanka has been dependent on imports for many years, and Sri Lanka, which has little money in its pockets, is even more shy, and as early as last year, it has not been able to take out enough foreign exchange reserves to pay the foreign debt that has matured
If only this disaster is enough, and it is just in response to the saying that the roof leaks are in the overnight rain, because the Indian region has been in an abnormally dry weather for a long time, Sri Lanka has also been affected, and the most tragic thing is that the country's electricity supply, forty percent of which depends on hydropower, which is good, their industrial production and agricultural irrigation industry, are difficult to maintain
Although the above mentioned factors are external factors, more responsibility should be attributed to the decisions of the upper echelons
First of all, the country since the beginning of the previous year, on an unusual want to engage in green agriculture, to know that as a traditional agricultural country, Sri Lanka's economic income is largely dependent on grain, once the production of grain is greatly reduced, not only can not stabilize the people's livelihood, but also can not obtain economic income through grain exports, although reform and innovation is to better improve the national economy, but no matter what new policy implementation, need fine calculation and planning
But unfortunately, the government seems to be far from conscious enough in this regard, while promoting green organic farming, it also prohibits the use of any chemical fertilizers and pesticides, Sri Lanka naively thinks that this will be able to raise the export price of its own grain, so as to get more economic benefits, but there is no overnight thing under the sky, so the greedy results will often backfire, because of the introduction of this agricultural policy, so that the country's grain production has been reduced on a large scale, and even the decline in rice production has reached fifty percent
Here to mention ah, Iran has also reached an agreement with Sri Lanka before, willing to exchange petroleum products for the country's Ceylon black tea, which is also the biggest trump card in Sri Lanka's hands, but the final result can be imagined, the original can be used to repay the debt of these agricultural products production, so low that people can not bear to look at it
At this point, the good agricultural powers have ushered in a serious food crisis because of this wrong policy
According to the statistics of relevant agencies, more than 7 million of Sri Lanka's 22 million people are already facing food shortages, which means that for every 10 households in the country, more than 3 households have to suffer from food insecurity, and in June alone, sri Lanka's food prices have risen by 80%, which means that the living conditions of the local people are getting worse and worse.
There are also reasons for the complete collapse of Sri Lanka, which is over-reliant on agriculture, tourism and other industries
As we all know, since the outbreak of the new crown epidemic around the world, the tourism industry in many countries has been hit hard, and Sri Lanka is no exception, knowing that in the past, tourism can contribute at least 10% of Sri Lanka's GDP
In 2019, Sri Lanka received a total of nearly two million foreign tourists in the whole quarter, and the tourism industry alone reached $4 billion, and the tourism industry, which was once one of the country's pillar industries, is now like a backwater, completely unable to earn much foreign exchange for the government, let alone fill the big hole
It is for this reason that Sri Lanka's foreign exchange reserves are seriously insufficient, so that even the basic domestic necessities cannot be imported
Of course, the bankruptcy of Sri Lanka is inseparable from the government's own monetary policy, since Rajapaksa became the president of the country in 2019, he can't wait to promulgate a series of economic measures to try to solve the domestic and serious economic problems in the shortest possible time, but he is ultimately too hasty and uses the wrong method
According to relevant information, the president in the large-scale tax cuts at the same time, but also carried out excessive money printing behavior, resulting in Sri Lanka ushered in the highest inflation in Asia, in March 2022, the country's inflation rate has soared to 21.5%, breaking the record of always single digits, the consequence of this is the country's currency rapid depreciation, the original economic problems have not been solved, but by the Sri Lankan president brought a more serious economic crisis
As of May, the Sri Lankan government has less than $50 million in foreign exchange reserves, and in the end, although China has provided Sri Lanka with a lot of loans and investments, we have not fallen into the ground at present, and at this juncture, we have no intention of returning those debts, and we are humanitarian
As early as last month, the mainland has sent a thousand tons of rice to Sri Lanka, and may provide more assistance in the future, in short, no one can give an accurate answer to where Sri Lanka's future will go, but this time the country's bankruptcy status quo has sounded the alarm bell for all countries in the world, no matter in which historical period, only by practicing industry plus correct and effective policies can a country prosper, and why the mainland wants to ensure that there is enough industrial and agricultural foundation, is based on such reasons
If you blindly rely on the sky to eat, over-rely on imports, once some large-scale disasters occur, you can only follow in sri Lanka's footsteps, which should be a situation that every country does not want to see, so in the future we must also warn this and do not repeat the mistakes of the country
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