Concerns over a financial crisis owing to inability to repay debts

Colombo/Sri Lanka – The economic situation in Sri Lanka is experiencing its worst recession ever, after government debt constituted the highest proportion of Asian dollar bonds this year, as Sri Lanka received a currency swap line worth $ 1.5 billion from China last March, raising concerns about the government’s inability to repay its debts.

Member of Parliament of Colombo District, Mr. Mujibur Rahman, said that the Sri Lankan government’s dependence on China to provide financial facilities and not resort to the International Monetary Fund generated a crisis inside the country, including the drop in foreign reserves to 2.9 billion dollars, high cost of living, and food crises.

Rasika Jayakodi, said that the general perception of the majority is that China is trying to advance its agenda at the expense of national interests in Sri Lanka, stressing that any foreign power would use all means, whether economic, political or cultural, to impose its authority in the country.

The Senior Journalist; however, added that the Lankan government is the only one to be blamed for the country’s current situation, posing the question of “how will Sri Lanka safeguard the interests of its people while dealing with Beijing, international partners, and stakeholders?”

Sri Lanka is trying to find a way out in several ways, especially with the re-emergence of Covid-19 cases threatening its tourism sector, as it must cover at least $2.5 billion in bonds due before the end of July 2022, including $1 billion in bonds due two months ago.