June 23, 2022

BIDEN ADMINISTRATION STUDYING THIS AS A HOW-TO GUIDE: Sri Lankan Prime Minister Says That the Nation’s Economy Has Collapsed.

The Sri Lankan economy is foundering under the weight of heavy debts, lost tourism revenue and other effects of the pandemic, as well as surging costs for commodities. The result is a country hurtling towards bankruptcy, with hardly any money to import gasoline, milk, cooking gas and toilet paper.

Lawmakers from the two main opposition parties are boycotting Parliament this week to protest Wickremesinghe, who became prime minister just over a month ago and is also finance minister, for failing to deliver on his pledges to turn the economy around.

Wickremesinghe said Sri Lanka is unable to purchase imported fuel due to heavy debt owed by its petroleum corporation.

The Ceylon Petroleum Corporation is $700 million in debt, he told lawmakers. “As a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.”

The crisis has started to hurt Sri Lanka’s middle class, which is estimated to be 15% to 20% of the country’s urban population. The middle class began to swell in the 1970s after the economy opened up to more trade and investment. It has grown steadily since.

Until recently, middle-class families generally enjoyed economic security. Now those that never had to think twice about fuel or food are struggling to manage three meals a day.

“They have really been jolted like no other time in the last three decades,” said Bhavani Fonseka, a senior researcher at the Centre for Policy Alternatives in Colombo, Sri Lanka’s capital.

“If the middle class is struggling like this, imagine how hard hit the more vulnerable are,” Fonseka added.

The situation has derailed years of progress toward relatively comfortable lifestyles aspired to across South Asia.

Flashbacks:

Could It Happen Here? 200 Dead, as Sri Lanka Literally Runs Out of Gas.

In Sri Lanka, Organic Farming Went Catastrophically Wrong.

Sri Lanka facing imminent threat of starvation, senior politician warns.

UPDATE (FROM GLENN): Looming food shortages is the next ‘slow-moving disaster’ to hit world.

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