Debt With China, Sri Lanka Hits Worst Economic Crisis Since Its Independence

Debt With China, Sri Lanka Hits Worst Economic Crisis Since Its Independence
Sri Lanka, hit by its worst economic crisis since independence in 1948 and on the brink of its first debt default, has been asking friendly nations including India and China for credit lines, food and energy. The Asian giants have already committed billions of dollars in financial support.

International Military - The people of Sri Lanka have to swallow the bitter pill right now because the country's government is unable to pay its debts, including to China. Sri Lanka has been hit by the worst economic crisis since the country's independence. The report shared by the People's Mind said that Sri Lanka's debt to China ranged from 1.5 to 2 billion US dollars.

Sri Lanka cannot afford imports of basic foodstuffs and fuel. As a result, soaring food prices have made the people of Sri Lanka even more suffocated. Sources also said that China's debt is reported to be around 10 percent of Sri Lanka's total debt.

It is undeniable, China is a 'royal and bourgeois' country when it comes to providing loans or debts. China often gives debt under the Belt and Road Initiative or BRI scheme. “China is known as a lender for infrastructure development projects in a number of countries. The funds were provided through the Belt and Road Initiative (BRI) scheme.”

Sri Lanka, which is reportedly in the middle of an economic crisis due to default on its debt to China, was asked to provide relief. However, China is reportedly reluctant to grant waivers to China. China instead provides other things in the form of emergency humanitarian assistance to Sri Lanka.

This is known through the spokesman for the China Agency for International Development Cooperation, Xu Wei told the Xinhua news agency, one of China's state-run media. Xu Wei claimed that China had taken note of the economic difficulties Sri Lanka was facing.

Therefore, China is currently trying to help Sri Lanka in dealing with the economic crush. In line with this statement, the spokesman for the Chinese Ministry of Foreign Affairs, Wang Wenbin. "The Chinese side has announced that it will provide Sri Lanka with emergency humanitarian assistance," he said.

"We will continue to offer support and assistance to the best of our ability to help Sri Lanka revive its economy and improve people's livelihoods," he added.

Sri Lanka is reportedly facing its worst economic crisis since independence. The scarcity of foreign exchange makes it difficult for Sri Lanka to import basic foodstuffs to fuel. “Sri Lanka is now grappling with the worst economic turmoil since declaring independence from Britain in 1948.

The lack of foreign currency makes the country unable to pay for imports of basic foodstuffs and fuel. As a result, Sri Lanka is currently in the midst of a food crisis due to soaring prices.

On Monday, Sri Lanka tried to find a rapid financing instrument (RFI) from the IMF to defend the country from falling into the economic crisis. Then on April 12, Sri Lanka announced a pre-emptive default of all its external debt totaling 51 billion US dollars.

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