While the schools in Sri Lanka’s<\/a> Colombo shut down and public employees were asked to work from home in order to battle the severe fuel shortage in the country, the situation looks grim.\u00a0 Troops in Sri Lanka were given tokens on Monday to people queueing for petrol amid a severe fuel shortage in the nation battling its worst economic crisis in seven decades.<\/p>\n Three-wheeler drivers wait in a queue to buy petrol due to fuel shortage, and an autorickshaw driver said, “I have been in line for four days, I haven’t slept or eaten properly during this time.”<\/p>\n With its foreign exchange reserves at a record low, the island of 22 million is struggling to pay for essential imports of food, medicine, and most importantly, fuel.<\/p>\n India sent over 2 billion humanitarian aid consignment to Sri Lanka during the crisis China praises India’s aid to crisis-hit Sri Lanka and says South Asia remains its priority.<\/p>\n Economic mismanagement<\/strong>:\u00a0 The 2019\u20132022 Sri Lankan economic crisis, presently affecting the island nation of Sri Lanka, is mainly attributed to economic mismanagement by its incumbent government. It has led to unparalleled levels of inflation, near-depletion of foreign exchange reserves, shortages of medical supplies, and price increases in basic commodities.<\/p>\n Tax cuts, money creation, and a nationwide policy:\u00a0 <\/strong>The crisis has been said to be caused by multiple compounding factors such as tax cuts, money creation, and a nationwide policy<\/strong>\u00a0to shift to organic or biological farming.<\/p>\n The Easter bombings<\/strong>\u00a0in 2019 had a negative impact on the economy and on tourism as Sri Lanka, the island\u2019s main source of income came from tourism.\u00a0 On 21 April 2019, Easter Sunday, three churches in Sri Lanka and three luxury hotels in the commercial capital, Colombo, were targeted in a series of coordinated Islamist terrorist suicide bombings.<\/p>\n Later that day, there were smaller explosions at a housing complex in Dematagoda and a guest house in Dehiwala. A total of 269 people were killed, including at least 45 foreign nationals, three police officers, and eight bombers, and at least 500 were injured.<\/p>\n COVID-19 pandemic<\/strong>\u00a0also led to the crisis. The subsequent economic hardships resulted in the public openly voicing their dissent, leading to one of the largest demonstrations in the island\u2019s history: The 2022 Sri Lankan protests.\u00a0 Communal violence has also played its part in weakening the structure of the nation.<\/p>\n Foreign debt:<\/strong>\u00a0 Sri Lanka had been reserved for sovereign default, as the remaining foreign reserves of US$1.9 billion as of March 2022 would not be sufficient to pay the country\u2019s foreign debt obligations for 2022, with US$4 billion to be repaid.<\/p>\n An International Sovereign Bond repayment of US$1 billion is also due to be paid by the government in July 2022. According to Bloomberg, Sri Lanka has a total of US$8.6 billion in repayments due in 2022, including both local debt and foreign debt.<\/p>\n In April 2022 Sri Lanka announced that it is defaulting making it the first sovereign default in Sri Lankan history since gaining independence in 1948.<\/p>\n It is said that 52.25% of\u00a0Sri Lankans voted for communalism<\/a>, and this is what happened to them!<\/p>\nIndia sent over 2 billion humanitarian aid consignment to Sri Lanka<\/h3>\n
\nThe consignment comprises 9,000 metric tons of rice, and 50 metric tons of milk powder, coupled with over 25 metric tons of drugs and other pharmaceutical supplies.<\/p>\nWhat Led to the Economic Crisis<\/h3>\n