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It has been two months since the island nation of Sri Lanka announced a default of its entire debt as conditions seem to worsen there.
The country has been engulfed in its worst economic crisis since its independence in 1948. The country had sold over 50% of its gold reserves in January as the country was in a state of national emergency since August 2021. At the time inflation had surged to 11.1%.
Riots had begun erupting in the nation late in March as power cuts, inflation and lack of essentials drove the population to the street in protest.
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Late in April, the entire Cabinet of Ministers resigned due to the ongoing protests while both Rajapaksa brothers continued to stay in power. However, Mahinda Rajapaksa soon resigned as PM. After his resignation, President Gotabaya Rajapaksa appointed Ranil Wickremesinghe as the new Prime Minister on 12 May 2022. Mr. Wickremesinghe was also appointed as finance minister of the bankrupt country in late May.
The new PM has asserted that steps would be taken to alleviate the food security issues while admitting Sri Lanka's mistake of not approaching the IMF sooner. He would be talking to the IMF to assist in the recovery of the island nation's economy.
Food inflation had surged to an unprecedented 57.4% in May. India has extended assistance worth over $2 billion in the form of LCs to the country by this time. People had been asking for the resignation of Gotabaya Rajapaksa as well, blaming him for all the misery. The president has said that he would complete his term but not contest again.
Recently, the Sri Lankan military open fired to contain public unrest when a group of 20-30 protestors pelted stones in protest outside a petrol pump. This clash ended with four civilians and three army personnel injured. Armed police and military have been deployed to guard fuel stations as people are forced to stand in large queues to purchase fuel.
Moreover, the government announced that all government schools, government-approved private schools, and public sector offices in Colombo city limits will be shut down due to fuel shortages. The PUSCL has agreed not to cut power from 8:00 am to 1:00 pm to facilitate online teaching as the country still suffers from 13-hour blackouts every day.
Adding insult to injury, the Sri-Lankan currency has depreciated 80% since March 2022 and the agricultural output has been 40-50% lower than last year. Some reports suggest that every 4 out of 5 people have to reduce their food intake or skip meals in Sri Lanka. The United Nations has warned of a looming humanitarian crisis in the country.
Article by Aman Agarwal.
This news piece is brought to you in association with jobaaj.com
