Published on: 2/12/2022IST

Anuj Tiwari Last updated on: 2/12/2022, Permalink

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Amidst the economic crisis that has been gripping Sri Lanka and even pushing it towards bankruptcy this year, the country has urged expats to contribute towards aiding the survival of citizens. 

The President’s Message

Recently, Sri Lanka celebrated its Independence Day on Friday (4th February 2022), wherein the President appealed country’s expatriates (person residing in a country other than their native country) to send money home amidst the nation’s struggle with the worst economic crisis in decades, whose primary reason has been the depleted foreign reserves.

On the occasion of independence day last week, President Gotabhaya Rajapaksa said in a ceremony in Colombo “Sri Lankans abroad who sent foreign currency back home are a major resource. I invite all expatriate Sri Lankans to invest in their homeland”.

Shortage Of Essentials

In the economic crisis that has been inching towards becoming a humanitarian crisis as well, Sri Lankans are facing shortages of essentials like milk powder, cooking gas, kerosene etc, as cash shortages have been hindering imports of raw materials for manufacturing, and due to the worsened inflation, which surged to 12.1% in December 2021.
What Led To The Crisis

 

Over the past two years of Covid, the pandemic has dealt a heavy blow to the island nation’s economy which is heavily dependent on tourism and trade. The government estimated a massive loss of $14bn over the last two years.

The country's main foreign exchange earner, i.e. overseas remittances have reportedly fallen by nearly 6% to $812m in December 2021, v/s a year earlier. The downfall came after the Sri Lankan government ordered the mandatory conversion of foreign currency and exchange rate controls.

And because of the prevailing currency shortage, importers are unable to clear their cargo and manufacturers are unable to buy raw materials from overseas, hence the crisis keeps on mounting.

Moreover, Sri Lanka has already borrowed heavily and faces repayments on $15bn in international sovereign bonds.

The President stated that none of the crises we experience today is long-term problems. We can find solutions to them with an optimistic approach. We have faced critical problems in recent history as well and found solutions.

Now, it remains to be seen what steps the nation’s government takes to improve the situation and bail out the country from this crisis.