Sri Lanka is rich in mineral resources, and many precious stones, such as rubies, sapphires and opals, are open to the public. This is a country rich in precious stones. Sri Lanka, the third largest tea producer in the world, produces a world famous tea, which is called Ceylon black tea.
Due to its natural and advantageous geographical location, Sri Lanka enjoys convenient international shipping. It happens to be at the intersection of the Red Sea and the Straits of Malacca. It is a key strategic security passage in the North Indian Ocean and a natural core area for Asian countries and European countries to carry out maritime trade. In addition, there are various pillar industries in Sri Lanka, such as agriculture, aquaculture, holiday tourism, clothing production and processing, tea and precious stones.
Then, why did Sri Lanka, which enjoys such unique development conditions, suddenly go bankrupt? Bian Xiao believes that the bankruptcy of Sri Lanka is the result of multiple reasons, and the main reasons can be summarized as follows.
1, the failure of radical agricultural reform has seriously hit agricultural production. Sri Lanka is located in the subtropical zone and belongs to the tropical monsoon climate. It is a country with plantation economy as the main body, and rice for dinner can be basically self-sufficient. However, since the outbreak of the epidemic, in order to reduce the impact of the epidemic on the country's tourism industry, the state gradually implemented the "Green Agriculture Order" in April 20021,and implemented a series of low-carbon environmental protection policies.
It is forbidden to import organic fertilizer and chemical fertilizer, and China is required to completely ban the use of contemporary agricultural means of production, including organic fertilizer, pesticide and herbicide, in an effort to become the first country in the world to completely complete green agriculture. In fact, this policy of ignoring the specific situation of the country is impossible to achieve its goal.
Conclusion: This policy has completely crushed the already fragile agriculture in Sri Lanka, resulting in the lack of fertilizer efficiency of land resources, constant pests, limited production of agricultural products in a large area and reduced rice production by 50%.
Most private farms in Sri Lanka are unable to engage in modern agriculture. After being banned from using organic synthetic fertilizers, the production of major agricultural products such as tea, coconut shoes and plastics was greatly restricted, and the rural economy suffered a fatal blow. As a result, Sri Lanka completely lost its self-sufficiency in food crops and became an exporter of food crops, so it had to use many foreign exchange transactions to import food.
Although the current policy has only been implemented for half a year and ended in failure, its consequences are irreversible. Food shortage led to the soaring price of food crops in China, which immediately triggered the most serious economic crisis since Sri Lanka's independence. According to the results of FAO, Sri Lanka has been listed as a list of countries that must rely on food crops for support.
In fact, the implementation of green agriculture should respect the characteristics of industrial chain development, from shallow to deep, and should not be too hasty and eager to achieve success. It is doomed to be unable to carry out "one size fits all" reform beyond the historical development process, which has actually been proved by the failure of agricultural reform in Sri Lanka. Some people even call Sri Lanka's agricultural reform "suicide" reform and innovation.
2. Debt Crisis The Asian Development Bank once pointed out in a report on 20 19 that Sri Lanka is a typical lose-lose economic power, which is also a multi-faceted reason for the country's bankruptcy. Double loss refers to the fiscal deficit and the loss of habitual new projects. Fiscal deficit means that a country's fiscal revenue and expenditure exceeds its total fiscal revenue, that is, funds are tight; The loss of habitual new items refers to the state that the total amount of imported goods and services exceeds the total amount of exported goods and services, that is, the trade deficit.
Since 2009, Sri Lanka has been vigorously carrying out infrastructure construction in the form of debt. As a result, Sri Lanka not only accumulated tens of billions of dollars in debt, but also the current Prime Minister mahinda rajapaksa was accused of taking bribes.
The unique contrast with the pattern that the government spends money on infrastructure construction means that after the current government took office, China's economic improvement has continued to decline, and the annual GDP growth rate has dropped to the historical bottom of 9%, while the construction of large and medium-sized capital projects is difficult to bring economic benefits in a short time.
After President Gotabaya Rajapaksa took office, he fulfilled his promise when running for the presidency, and the income tax was reduced from 15% to 8%. In the case of tight government revenue, government departments have been unable to repay more than $7 billion in debts due this year. As early as May 65438, 2009, Sri Lanka was unable to repay the interest on the $78 million due debt loan.
At that time, Sri Lanka's debt had increased by $510 billion, but it could be traded in foreign exchange before it reached $50 million. At present, the total debt management scale of Sri Lanka is more than 50 billion US dollars, among which China ranks fourth with 10%, and there are other countries with more debts, such as Japan, the United States and India.
The main reason for Sri Lanka's bankruptcy can be simply summarized as follows: the country's economic development is maintained by paying back the money and borrowing it again. If it can't borrow new debts, the country will go bankrupt.
Tourism, the pillar industry of Sri Lanka, collapsed due to the epidemic. As a pearl in the Indian Ocean, Sri Lanka is a "fairyland on earth" in the eyes of many tourists from all over the world. Tourism has always been an extremely important economic pillar of Sri Lanka. However, the serial explosions of the 20 19 terrorist incident caused heavy losses to Sri Lanka's tourism industry. Since then, the sudden outbreak of COVID-19 has made it difficult for tourism to achieve results from beginning to end, and this year's conflict between Russia and Ukraine even led to this.
Tourism revenue is the source of Sri Lanka's goods trade and local financial revenue. Losing this origin will lead to economic difficulties in China, and we can only make a living by borrowing. It is not difficult to see that the collapse of the pillar industry tourism is also one of the important reasons for Sri Lanka's bankruptcy.
4. Conclusion The bankruptcy of Sri Lanka has provided a lesson worthy of vigilance and warning to all countries in the world. First, economic development should be gradual, and we must not ignore the reality of our country and surpass the historical development process; Second, a country needs to rely on its own energy, self-reliance, self-reliance to develop its economy, and can not blindly rely on foreign players to borrow money to develop its own economy; Third, government departments should improve the level of rectification and find a development path suitable for their own national conditions.