Why Sri Lanka's Economy Collapsed and What Is Next
2022-06-27
LRC
TXT
大字
小字
滚动
全页
1Sri Lanka's prime minister recently said his nation's debt-stricken economy has "collapsed."
2The South Asian island country is running out of money to pay for food and fuel.
3It is seeking help from neighboring India and China and from the International Monetary Fund (IMF).
4Prime Minister Ranil Wickremesinghe took office in May.
5He described the difficult task he faces in turning around an economy that he said is heading for "rock bottom."
6The United Nations World Food Program says nearly nine of 10 families in Sri Lanka are going without some meals or otherwise decreasing how much they eat.
7Three million of the country's 23 million people are receiving emergency humanitarian aid.
8Doctors are using social media to try and get important supplies of equipment and medicine.
9Growing numbers of Sri Lankans are seeking passports to go overseas in search of work.
10Economists say the crisis comes from in-country causes such as years of poor leadership and corruption.
11They also say it comes from other troubles, such as growing debt, the effects of the pandemic and terror attacks that hurt the tourism industry.
12Much of the public's anger has been directed at President Gotabaya Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa.
13Prime Minister Mahinda Rajapaksa resigned after weeks of anti-government protests that turned violent.
14The government needed to increase its income as foreign debt for large projects increased.
15But instead, Rajapaksa pushed through the largest tax cuts in Sri Lankan history,
16which recently were undone.
17Creditors decreased Sri Lanka's ratings, which blocked the country from borrowing more money as its foreign reserves fell sharply.
18In April 2021, Rajapaksa suddenly banned imports of chemical fertilizers.
19That move decreased the amount of rice produced and drove prices higher.
20This year, the war in Ukraine has pushed prices of food and oil higher.
21Inflation was close to 40 percent and food prices were up nearly 60 percent in May.
22The Finance Ministry says Sri Lanka has only $25 million in usable foreign reserves.
23That has left it without the ability to pay for imports or repay billions in debt.
24The local money, the Sri Lankan rupee, has weakened in value by nearly 80 percent.
25That makes costs of imports even higher.
26So far, Sri Lanka has gotten through mainly by $4 billion in credit lines from neighboring India.
27But Wickremesinghe warned against expecting India to keep supporting Sri Lanka.
28The government is in negotiations with the IMF on a bailout plan.
29Wickremesinghe said Wednesday he expects to have some agreement with the IMF by late July.
30The government also is seeking more help from China.
31Other governments like the U.S., Japan, and Australia have provided a few hundred million dollars in extra support.
32Earlier this month, the United Nations began asking countries around the world to help.
33So far, the estimated financial help is not close to the $6 billion the country needs to keep running over the next six months.
34I'm Gregory Stachel.
1Sri Lanka's prime minister recently said his nation's debt-stricken economy has "collapsed." The South Asian island country is running out of money to pay for food and fuel. It is seeking help from neighboring India and China and from the International Monetary Fund (IMF). 2Prime Minister Ranil Wickremesinghe took office in May. He described the difficult task he faces in turning around an economy that he said is heading for "rock bottom." 3People suffering 4The United Nations World Food Program says nearly nine of 10 families in Sri Lanka are going without some meals or otherwise decreasing how much they eat. Three million of the country's 23 million people are receiving emergency humanitarian aid. 5Doctors are using social media to try and get important supplies of equipment and medicine. Growing numbers of Sri Lankans are seeking passports to go overseas in search of work. 6Failing economy 7Economists say the crisis comes from in-country causes such as years of poor leadership and corruption. They also say it comes from other troubles, such as growing debt, the effects of the pandemic and terror attacks that hurt the tourism industry. 8Much of the public's anger has been directed at President Gotabaya Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa. Prime Minister Mahinda Rajapaksa resigned after weeks of anti-government protests that turned violent. 9The government needed to increase its income as foreign debt for large projects increased. But instead, Rajapaksa pushed through the largest tax cuts in Sri Lankan history, which recently were undone. Creditors decreased Sri Lanka's ratings, which blocked the country from borrowing more money as its foreign reserves fell sharply. 10In April 2021, Rajapaksa suddenly banned imports of chemical fertilizers. That move decreased the amount of rice produced and drove prices higher. 11This year, the war in Ukraine has pushed prices of food and oil higher. Inflation was close to 40 percent and food prices were up nearly 60 percent in May. 12Lack of financial ability 13The Finance Ministry says Sri Lanka has only $25 million in usable foreign reserves. That has left it without the ability to pay for imports or repay billions in debt. 14The local money, the Sri Lankan rupee, has weakened in value by nearly 80 percent. That makes costs of imports even higher. 15Current efforts 16So far, Sri Lanka has gotten through mainly by $4 billion in credit lines from neighboring India. But Wickremesinghe warned against expecting India to keep supporting Sri Lanka. 17The government is in negotiations with the IMF on a bailout plan. Wickremesinghe said Wednesday he expects to have some agreement with the IMF by late July. 18The government also is seeking more help from China. Other governments like the U.S., Japan, and Australia have provided a few hundred million dollars in extra support. 19Earlier this month, the United Nations began asking countries around the world to help. So far, the estimated financial help is not close to the $6 billion the country needs to keep running over the next six months. 20I'm Gregory Stachel. 21Krishan Francis and Elaine Kurtenbach reported this story for Reuters. Gregory Stachel adapted it for VOA Learning English. 22_______________________________________________________________________ 23Words in This Story 24task - n. a job for someone to do 25rock bottom - n. the lowest possible level or point 26humanitarian - adj. connected with helping people who are suffering and improving the conditions that they are living in 27income - n. money that is earned from work, investments, business 28bailout - n. the act of saving or rescuing something (such as a business) from money problems 29We want to hear from you. Write to us in the Comments section, and visit our Facebook page.