Amid hopes of pulling the country out of its economic nightmare, Ranil Wickremesinghe was sworn in as President of Sri Lanka on July 21. The island country has been witnessing mass unrest over the economic crisis. Like former President Gotabaya Rajapaksa, Wickremesinghe (73) is also not popular with the people either. Despite that, recently, at the tightly-guarded parliament complex, he took the oath for the top office.
After the July 9 uprising, when people broke into the President’s Palace, Rajapaksa fled from the country. On July 13, Rajapaksa first fled to the Maldives, and the next day he moved to Singapore. For months, the public protested against him. It is pertinent to mention here that the country has witnessed the worst economic crisis since 1948.
There are allegations that the Rajapaksa administration mishandled the nation’s finances. Mr. Wickremesinghe is seen as part of the problem.
What led to the economic crisis in Sri Lanka?
Many experts blame ex-President Rajapaksa’s poor economic mismanagement. However, the government blamed the Covid pandemic. It said it badly affected the tourist trade of the country. It is worth mentioning here that the tourism sector in Sri Lanka is one of the biggest foreign currency earners.
Apparently, Covid seems to be just an excuse. It has just added to an already existing problem.
According to multiple reports, the crisis began due to many factors like money creation by the government, tax cuts, nationwide policy to shift to organic or biological farming, and the 2019 Sri Lanka Easter bombings. The subsequent economic hardships resulted in the 2022 Sri Lankan demonstrations.
Sri Lanka: A defaulter country
Sri Lanka had been earmarked for sovereign default. As of March 2022, with US$4 billion to be repaid, the remaining foreign exchange reserves of US$1.9 billion would not be sufficient to pay the country’s foreign debt obligations for 2022. In July 2022, an International Sovereign Bond repayment of US$1 billion is due to be paid by the nation. The South Asian country has become the first state in the Asia-Pacific region to enter sovereign default in the 21st century.
A crumbling economy and an eroding faith of people-these are the issues that Mr. President will have to face. For him, it will require more than a miracle to bring the country back on track.
About the author: Anurag Sason is an Indian journalist with experience in mainstream journalism. He has worked in newspaper, news agency, TV, news app (short video sharing app) and digital media. He tweets at @AnuragSason
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