What Caused Sri Lanka to Bankrupt to Unable to Pay Piles of Debt?

Suara.com – The economic crisis due to the COVID-19 pandemic has also caused several countries to go bankrupt, one of which is Sri Lanka. So what are the causes of Sri Lanka’s bankruptcy?

Sri Lanka has experienced a worsening economic crisis since its independence from Britain in 1984. Is why Sri Lanka went bankrupt just because of the pandemic?

This situation has been exacerbated by the COVID-19 pandemic that has hit the world. The Sri Lankan government for more than 2 years was forced to suppress a lot of funding and subsidies to its people to deal with the pandemic.

As a result of this, the massive subsidies that will be given to the community are revoked in their entirety. This caused a lot of protests from the local community.

Also Read: Reflecting on the Sri Lanka Crisis: What Causes the State to Bankrupt?

Cause Sri Lanka Bankrupt

Sri Lanka’s Prime Minister, Ranil Wickremesinghe, has spoken about why his country went bankrupt. Ranil said that the economic crisis in Sri Lanka was caused by the large foreign debt.

Launching from the AP, Sri Lanka’s bankruptcy was also triggered by the country’s economic condition which was increasingly failing due to loss of income from the tourism sector due to the COVID-19 pandemic.

Restricting tourism activities in the midst of the Covid-19 pandemic was actually a priority for the government at that time. This wrong step became worse, as high inflation was followed due to the main product of Sri Lanka, namely rice, which fell drastically.

The production of their staple rice, which is usually exported to a number of countries, has turned them into large-scale imports of rice in the midst of a pandemic. Not only that, several economists in the country also revealed that the Sri Lankan government could not maintain the state system that should have been maintained from the start.

Also Read: What Can Make a Country Bankrupt? Here’s the explanation

That is why Sri Lanka is now unable to buy imported fuel due to the huge debts of the country’s oil companies. Ceylon Petroleum Corporation is said to have a debt of US$700 million or equivalent to Rp. 10.4 trillion.

Source: Suara.com – Informasi Berita Terkini dan Terbaru Hari Ini by www.suara.com.

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