2023-06-20 07:25:56
The country, which has been reeling under economic crisis for the past several months, is now slowly recovering. The country is in high inflation. Buying a car at this time is unthinkable. Sri Lanka tends to import all vehicles as local manufacturing in the country is very limited.
To deal with the ongoing economic crisis, the import of various goods, including vehicles, was banned. Although some items from the banned list were removed earlier last week, the export of foreign-made vehicles has been decided to remain strict.
Last week, $80 million was spent on fuel imports alone. According to government data, Sri Lanka’s economy shrank by 11.5 percent in the first quarter of 2023 from a year earlier. In March, the country received a US$3 billion bailout package from the IMF. Even if things are like this, the essentials are the priority. The government cannot afford to incur any other wasteful expenditure.
The country’s economy depended on tourism, rice production, tea exports and textiles. But due to high fuel prices and lack of options, the cost of transportation has increased manifold. Even individual customers had to wait in long queues to get fuel for their vehicles, compounding the misery.
The country is running out of essential commodities such as food and fuel. Schools, colleges and government institutions are all closed. Some hospitals are not even functioning. Electricity is not exactly there either. At the end of 2019, Sri Lanka had $7.6 billion in foreign exchange reserves. By March 2020, it had declined to $1.93 billion. The Sri Lankan government recently stated that it currently has only $50 million left in its foreign exchange reserves.
The reality is that Sri Lanka is unable to import all the essential commodities like fuel, medicine etc. in the current situation. The price of petrol and diesel in the country is soaring. Reserve fuel stock is on the verge of being exhausted. Schools and offices are closed to conserve electricity and fuel.
Sri Lanka is a country that has many similarities with the topography of Kerala. Almost all the food and culture are similar. Sri Lanka, which has a population of 2.2 million, was recovering from years of civil strife and was planning to increase its income from sectors including tourism. Meanwhile, such a problem arose.
The Asian Development Bank states that Lanka’s public debt is unsustainably high and the country is in a difficult position to repay long-term loans. Researchers say that the government’s efforts are not enough. The Sri Lankan government and the Central Bank have also rejected the demands of seeking IMF assistance to overcome the financial crisis. But Sri Lanka is going ahead with this move due to the new crisis created by the Ukraine war. In the meantime, India and China are helping Sri Lanka by providing fuel and essential goods.
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