Saturday, October 1, 2022

Sri Lanka President declared state of emergency due to economic crisis

- Advertisement -

Amid the country’s economic crisis and the consequent anti-government protests, the Sri Lankan President Gotabaya Rajapaksa on May 6 declared a state of emergency.

The decision came amid weeks of protests by the public demanding the resignation of the President and the government.

Sri Lanka is witnessing the worst economic turmoil in its history characterised by shortage of essentials, and power outages induced by severe forex crisis.

- Advertisement -

Rajapaksa had earlier declared emergency on April 1 after a mass protest opposite his residence. He then revoked it on April 5.

The state of emergency gives the security forces and the police the power to arbitrarily detain and even arrest people.

Sri Lanka Economic Crisis

The 2019–2022 Sri Lankan economic crisis currently affecting the island nation of Sri Lanka is largely attributed to the economic mismanagement by its incumbent government. It has led to unprecedented levels of inflation, near-depletion foreign exchange reserves, shortages of medical supplies and price increases in basic commodities.

- Advertisement -

The crisis has said to be caused by multiple compounding factors such as tax cuts, money creation, a nationwide policy to shift to organic or biological farming as well as events such as the Easter bombings in 2019 and the impact of the COVID-19 pandemic.

Sri Lanka had been earmarked for sovereign default, as the remaining foreign reserves of US$1.9 billion as of March 2022 would not be sufficient to pay the country’s foreign debt obligations for 2022, with US$4 billion to be repaid.

An International Sovereign Bond repayment of US$1 billion is also due to be paid by the government in July 2022. According to Bloomberg, Sri Lanka has a total of US$8.6 billion in repayments due in 2022, including both local debt and foreign debt.

- Advertisement -

In April 2022 Sri Lanka announced that it is defaulting making it the first soverign default in Sri Lankan history since gaining independence in 1948.

- Advertisement -
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Latest News