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News: Sri Lanka’s energy minister has said the India-Lanka development of the strategic Trincomalee oil tank farm will be finalised in January.
What are the reasons for the recent economic crisis in Srilanka?
The Easter killings of 2019: it dealt a hammer blow to the country’s tourism industry, its main economic activity and source of revenue.
Dwindling foreign exchange earnings: it has led to restriction on imports, which in turn has led to shortages of food essentials.
High Retail inflation: it has led to skyrocketing of food prices.
An overnight switch to organic farming by government: it has threatened Sri Lanka’s main export, the paddy and tea.
High External debt. In 2022, the country reportedly had to pay some $4.5 bn to service its sovereign bonds. Nearly half of Sri Lanka’s external debt is owed to international capital markets, and slightly below a quarter to international banks.
Lack of support from IMF: Sri Lanka has exited the IMF programme in 2019 because of the tough conditions, and is reluctant to approach the Fund again.
How India is supporting Srilanka ? : Read here : https://forumias.com/blog/india-finalises-cooperation-plan-to-revive-covid-hit-sri-lanka-economy/
Source: This post is based on the article “Joint development of oil tank farm by India, Lanka could alter dynamic of Delhi-Beijing rivalry” published in Indian Express on 30th Dec 2021.
