Will Sri Lanka recover from its massive debt crisis?

Sri Lanka

The massive debt crisis has affected the lives of nearly all classes in the society, specially the poor and middle, in Sri Lanka is not new. The loans given lead to a debt trap which is the root cause of our situation. Sri Lanka’s foreign debt has reached US$ 52 billion and debt servicing last year was six billion dollars and this year seven billion. Hence the shortage of dollars and of essential imports like fuel, gas, chemical fertilizer, medicines and food items. To ensure that at least six months of these imports are obtained the Foreign Exchange Reserve (FOREX) has been maintained at US$ seven to eight billion. Now it is down to zero, and thus causing this severe crisis.

The deep and sudden global recession caused by the coronavirus and moves to contain it has forced extraordinary measures by countries the world over. In Sri Lanka’s case, the added challenge is the pre-existing conditions of low growth and enormous debt.

The loans given lead to a debt trap which is the root cause of the situation. Sri Lanka’s foreign debt has reached US$ 52 billion and debt servicing last year was six billion dollars and this year seven billion. Hence the shortage of dollars and of essential imports like fuel, gas, chemical fertilizer, medicines and food items. To ensure that at least six months of these imports are obtained the Foreign Exchange Reserve (FOREX) has been maintained at US$ seven to eight billion. Now it is down to zero, and thus causing this severe crisis.

The IMF’s 2016 Extended Fund Facility help for Sri Lanka, which expired this month, was supposed to help set the nation on a stronger development track. Instead, its overall debt ratio has climbed past 90% of GDP, as per a JPMorgan report, and the economy last year expanded the least since 2001, at just 2.3%.

Eelam Tamils living all over the world [13 Million] are eager to invest in the North and East of Sri Lanka [the traditional and historical homeland of Tamils] Unless a just and reasonable solution to the Tamils in the North and East with Police and land powers as stipulated in the Indo/Sri Lanka Accord is granted the Eelam Tamils will never invest in Sri Lanka.

It is the moral responsibility of the Tamil diaspora to help in educating these children and empower them to earn a livelihood. Most of them were attending local schools and their families did not have the wherewithal to assist them in pursuing higher education.

An atmosphere conducive to finding a permanent political solution to the Sri Lankan Tamil issue is emerging now and it is the moral responsibility of the Tamil diaspora to join in reconstruction efforts, according to a group of Tamil MPs from Sri Lanka. Addressing a press conference on Friday, Sivagnanam Siritharan, Kilinochi MP, said that with the coming together of two major political parties and the efforts of several nations, including India, pointed to the emergence of an opportunity to find a permanent political solution to the Sri Lankan Tamil issue.

Tamils living in the North and East were not politically empowered now to bring about economic transformation in the war-torn region and look up to Tamils living elsewhere, especially to Tamil Nadu, for help in reconstruction, he said.

An estimated 90,000 war widows were living in this region without a clue of how to bring up their children. The government did not treat them on a par with widows of Sri Lankan Army personnel,

Regretting that most of the promises made in Sri Lankan Parliament on rehabilitation of Tamils were yet to be translated into action, the housing schemes of India and other countries, however, had reached the intended beneficiaries.

Kumarathasan Rasingam – Secretary. Tamil Canadian Elders for Human Rights Org.

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