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How the Sri Lankan economy got derailed while on the path of speed

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Sri Lanka was once on the fastest growing list. This country did the work of astonishing the whole world. But then the matter started deteriorating and people came on the road.

The ongoing political and economic unrest in India’s neighborhood has caught the attention of the whole world. India is also eyeing the economic and political plight of Sri Lanka. India is also worried that China should not take advantage of this. Food and drink in Sri Lanka is touching the sky. At the same time, there is anger among people about the political environment. It is important to know why this country is in the midst of political turmoil and economic crisis. Because at one time Sri Lanka was moving fast on the path of progress. According to experts, Sri Lanka is responsible for this.

The special role of tourism in the Sri Lankan economy

According to experts, one of the reasons for this plight was also the spread of corona epidemic in the world, over which no one had control. Its effect was seen all over the world. Professor Harsh V Pant of Observer Research Foundation says that Sri Lanka’s economy is based on tourism. People from all over the world come here to see the natural beauty of this place. The share of tourism in the GDP here is about 12.5 percent. His pace did not slow down before Corona. But worldwide sanctions derailed it. After this the steps taken by the government also made the situation worse.

Sri Lanka was on the path of progress

Sri Lanka is embroiled in a protracted civil war. Even so, owning one is still out of reach for the average person. Sri Lanka has also performed well in the United Nations Human Development Index. Professor Pant says that the reason for Sri Lanka’s plight is its wrong policies. Signs of Sri Lanka’s misfortune were already visible.

reduction in tax rates

The biggest loss to Sri Lanka’s income has been the reduction in tax rates. Global credit rating agencies also questioned the government’s decision. Due to this decision, it became difficult to mobilize financial resources from Sri Lanka’s international financial system at an affordable rate. China took advantage of this situation and Sri Lanka became dependent on China. The country already burdened with debt became more indebted.

wrong agricultural policy

The country also had to bear the brunt of the wrong policies implemented in the agriculture sector. The government has banned the use of chemical fertilizers. This had a direct impact on agriculture and grain storage. The government ignored the fact that it is not possible to move towards organic farming overnight. As a result, traditional agricultural production lags behind. Although the government later reversed its decision, but by then it was too late. Signs of a food crisis were emerging in the country. The country is currently facing a severe food crisis and the economy is in serious trouble.

great friendship with china

One reason for Sri Lanka’s plight is also the Rajapaksa family’s proximity to China. Because of China, Sri Lanka tried to distance itself from an old friend like India. Now that Sri Lanka is on the verge of poverty, China has turned its back on it. At present, China deeply regrets the situation. China has categorically refused to give any concession on debt to Sri Lanka. On the other hand, Sri Lanka has remembered India in bad times.

India remembered in difficult times

India has also done its duty well. India has given a line of credit to Sri Lanka for the supply of essential commodities. India is also sending thousands of tonnes of food items including rice and diesel petrol to Sri Lanka. India has given a loan of Rs 6,500 crore to Sri Lanka in the first two months of this year itself. Apart from this, India will give a loan of Rs 7,500 crore to Sri Lanka in the coming days.

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