[Epoch Times, July 07, 2022](Epoch Times reporter Xia Song comprehensive report) Sri Lankan Prime Minister Wickremesinghe told Congress on July 5 that the country is bankrupt. At present, the country’s food prices are soaring, people’s livelihood materials are in short supply, and the fuel crisis is serious. Many people have left their homes in despair and went to other countries.
In addition, Sri Lanka currently owes China about $6.5 billion. The analysis believes that the CCP’s large-scale distribution of money harms others and itself, and Beijing itself “falls into the debt trap it dug for other countries”.
Soaring food prices and shortage of living materials
On July 5, Sri Lankan Prime Minister Wickremesinghe told Congress that the country is bankrupt and that the country will fall into a deep recession this year, severe shortages of food, fuel and medicines will continue, and this unprecedented economic crisis will last at least until the end of 2023. .
On July 6, the United Nations quoted the latest report of the World Food Program as saying that the country’s food and fuel prices have soared and people’s livelihoods are in short supply. Some 6.26 million people, in a country of 22 million, are left wondering if their next meal will be available.
The report said that Sri Lanka’s inflation rate has reached 57.4%, and high food prices have made it difficult for people to put decent food on the table. 61% of households can only eat meals in order to save on food expenses, such as eating less or eating less nutritious food. As the crisis intensifies, more families will be forced to live this way.
“These days, we haven’t had a good meal, only rice with sauce,” a Sri Lankan woman was quoted as saying in a UN press release.
The government has no foreign exchange to import fuel, the people burn wood for cooking
Since the government has no foreign exchange to import kerosene, gasoline and diesel, some people use kerosene stoves to cook food instead. The government also has no foreign exchange to import fuel for power generation, so the power is cut off, and people who have purchased electronic stoves cannot use it normally.
Agence France-Presse reported that since the beginning of this year, people have switched to using firewood to cook their food.
At least seven people were killed and hundreds injured in gas explosions in thousands of kitchens across the country. The reason for the incident was that the gas tank pressure reached dangerous levels by increasing the proportion of propane in the gas as the supplier tried to reduce costs.
MG Karunawathi, a 67-year-old roadside stall owner, told AFP, “We are tortured (inhaling smoke) when we cook food with firewood, but we have no choice. Also, it is not easy to get firewood. It’s easy, and it becomes very expensive.”
Fuel sales to ordinary people are suspended, prices soar
The British Radio (BBC) reported on July 5 that as Sri Lanka’s state-owned oil company is deeply in debt of hundreds of millions of dollars, foreign companies are reluctant to continue to provide fuel to Sri Lanka, which is the main reason for the severe shortage of fuel.
Sri Lanka recently announced a moratorium on fuel sales to ordinary people until July 10. The move is widely seen as the first time a country in the world has imposed fuel restrictions of this magnitude since the oil crisis of the 1970s.
On June 28, the Sri Lankan government announced restrictions on fuel distribution, saying that for nearly two weeks, fuel would only be supplied to vehicles for essential services such as public transport and emergency services.
According to Deutsche Welle’s report on July 6, there were long queues at many local gas stations. In order to get fuel, residents were forced to queue for hours, and some even queued for days.
Ruvini Gunawardana, a 30-year-old homestay owner, said if you are lucky you can get fuel, otherwise you will come home empty-handed. Even so, people still line up to refuel every day, for hours in a row. “My brother was in line for almost four hours and he still couldn’t get fuel,” he said.
“People are frustrated and arguing in the queue. Many people can’t afford food and they are starving while queuing. We sometimes share our food with people in the queue,” said B&B owner Gunawardena.
The report said fuel prices for two-wheelers were as high as 1,500 Sri Lanka rupees (about 4.05 euros, 4.18 US dollars) per liter in some parts of the region, 2,000 rupees per liter for three-wheelers and 5,000 rupees per liter for four-wheelers, with higher black market prices. Even in desperation, people are willing to pay more for fuel.
Public transport restricted bus fares double
Public transport in Sri Lanka is also restricted due to lack of fuel, which in turn has led to an exponential increase in bus fares.
The lack of transportation has made commuting or emergency services more difficult, with few tricycles and taxi drivers still on the road, and fares have risen sharply for those remaining, DW reported.
Arunthathi Thiyagarajah, a 28-year-old graphic designer, told DW, “My cousin was pregnant with complications and needed to go to the hospital every day for injections. But because of fuel shortages, they couldn’t drive there and had to take expensive rides. the tricycle.”
Walking and cycling are now the first choice for many Sri Lankans, but even bicycles are now expensive, rising from around 10,000 rupees to as high as 80,000 rupees, the report said.
The government is struggling to pay for fuel deliveries as the fuel crisis worsens, with restrictions likely to be extended for another 12 days. Authorities are working on rationing fuel, but it’s not working well even for those with priority rationing.
Sri Lankans flee their homes in despair
Reports say the crisis in Sri Lanka has led to mass exodus of people from their homes. Many people want to go abroad to earn money, save up until the economy improves, and then come back to Sri Lanka. But some chose to leave the country forever.
Due to the chaos and school closures, some families are planning to send their children to study abroad, such as in India. Wealthier families try to immigrate to the UK, US, Australia, Canada or the EU.
Many local people are applying for new passports or renewing old passports, and the passport appointment places of relevant units have been filled out in the past three months.
Nirosh, who is applying to study abroad for a master’s degree, told DW, “My salary has remained the same, but expenses have increased. We are worried about the future of ourselves and our families. If we could leave the country, many people would even Willingness to go into debt.”
Arunthathi said, “Sri Lanka is my home, but if the situation worsens and there is a stricter lockdown, I plan to leave the country and go to India. The time zone is similar and I can work remotely there temporarily.”
Sri Lanka Bankruptcy Analysis: The CCP’s Big Sprinkling of Money Harming Others
The bankruptcy of Sri Lanka has brought the CCP into the spotlight again. The CCP regards Sri Lanka as an important hub of the “Maritime Silk Road” and has invested in several infrastructure projects before it launched the “Belt and Road” initiative.
Over the past decade, China has invested billions of dollars in loans for infrastructure projects in Sri Lanka. These projects include seaports, airports, highways, power stations and port cities. These include the $1 billion Hambantota port construction and the $1.4 billion Colombo port city plan, among others.
Sri Lanka’s debt burden has also increased, and in 2017 the country leased the Hambantota port to a Chinese company on a 99-year lease.
Economist Zheng Xuguang once said to The Epoch Times, “I will give you the right to operate the (Hambantota) port, but if you give it to you, you will not get any money back. This is the so-called ‘white elephant project’, which means that It’s useless and expensive, and it’s a huge burden, hurting others and hurting yourself.”
Current affairs commentator Wang He also told The Epoch Times that the CCP is the biggest loser in the promotion of the “One Belt, One Road” big money policy. And the countries that borrowed from the CCP did not benefit either. Due to the lack of economic viability, after the large-scale infrastructure was completed, there was no corresponding income to repay the debt, and the country fell into a debt crisis.
Sri Lanka currently owes China about $6.5 billion, and the two sides are negotiating how to restructure the debt.
Beijing itself “falls into the debt trap it dug for other countries”, Minxin Pei, a well-known Chinese political and economic expert and a professor at the Claremont McKenna College (CMC) in the United States, recently published an article in the Nikkei Asian Review Say.
Pei Minxin said that the CCP has few good options to climb out of the hole it dug itself. Putting pressure on an insolvent government like Sri Lanka in the midst of an economic crisis would be futile and counterproductive. The CCP will not only lose money in the process, but also its own reputation.
He argues that a complete write-off of debt would destroy the balance sheets of China’s state-owned banks, which made these loans, and Beijing’s government would eventually have to cover their losses. As the world economy continues to gloom, Beijing should prepare for a debt crisis of its own making.
Responsible editor: Sun Yun#