Sri Lanka is going through the worst phase since independence. The country has raised its hands on foreign debt. He said on Tuesday that he was not in a position to repay the foreign debt. Now the International Monetary Fund (IMF) is anticipating a bailout. The economic crisis in the country is getting worse with every passing day and there is a huge shortage of essential things. Let us know which countries, including China, will suffer due to Sri Lanka’s failure to pay its foreign debt.
According to the FP, Sri Lanka has an external debt of about $ 51 billion. China will suffer the most, as it is the biggest debtor to Sri Lanka. China accounts for about 10 per cent of Sri Lanka’s total external debt. After China, Japan and India have the highest debt of Sri Lanka. Sri Lanka has borrowed 47% of its total debt from the debt market. At the same time, China’s debt is about 15 percent of the country’s total debt. The country holds 13 per cent in the Asian Development Bank, 10 per cent in the World Bank, 10 per cent in Japan and 2 per cent in India.
According to a report, Sri Lanka’s foreign exchange reserves stood at around $2 billion at the end of February, less than two months after imports. The government banned imports due to low foreign exchange reserves. Due to which there was a shortage of essential commodities like fuel, milk powder in the country and people came on the road. Inflation has reached double digits. Sri Lanka’s Finance Minister Ali Sabri said that Sri Lanka will need around $3 billion over the next six months to ease fuel and medicine supplies and manage the economic crisis.
The situation in Sri Lanka with a population of 22 million has been very bad for the last several months. The prices of essential commodities are skyrocketing in the country. Petrol and diesel are not being imported due to acute shortage of foreign exchange. Power supply disrupted for hours, long lines at petrol pumps.
Angry protesters are taking to the streets and pressure is mounting on President Gotabaya’s party. The speaker of the country’s parliament recently said that the people of the country are in a state of starvation.
Sri Lanka appealed to China to reschedule its debt, but China flatly refused. The economic condition of many other countries trapped in China’s debt is also bad. These include Pakistan, Madagascar, Maldives and Tajikistan.