Incompetence and Corruption should have new synonyms in the dictionary now as President Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa. These are the two power crazy brothers who sold their Sovereign nation.

Neither the Sri Lankan crisis evolved in a day nor it had not forewarned the citizens. But the Island nation, its poor leadership and its greedy citizens ignored all the signals.

The Sri Lankan Economy was well floating. It had the necessary agriculture, tourism and service sector to support. It had reasonable foreign currency reserves as well to meet the overseas import requirement.

2019, Islamic terrorist suicide bombings at churches and hotels on the eve of Easter killed more than 250 people. This destroyed their tourism. Tourism was the biggest source of foreign currency earnings for the Island nation.

President Rajapaksa erred in welcoming China. The Chinese debt for developing Infrastructure was mounting. Most of the debt had comparatively shorter tenor making the repayment liability even sooner. The Government debt gradually ballooned to US$51 Billion. By all imagination it was the result of institutional fraud and Government plunder. Mounting debt and sustained interest servicing led to the devaluation of domestic currency, which in turn made the import of Goods even costlier.

Inflation was hitting the street. The rise in food and fuel cost had impacted the ordinary citizen. Instead of addressing the cause of the mess, Rajapaksa’s brother resorted to a historical cut in the tax rate. The reduced Tax rate further narrowed the fiscal position of the Island nation.

Every ordinary citizen of any nation should realize the fatal impact of freebies and subsidies on the economy. Unfortunately the Sri Lankan had no idea.

It was only after downgrading the credit rating of the Island nation, the Rajapaksa Government restored the tax rate. But by then it was too late to abridge the fiscal imbalance.

The downgrading of credit rating had squeezed new external borrowing. With the tightening of reserves, Rajapaksa government banned import of fertilizer, instead decided to switch to organic farming. The sudden change in policy had no research support. Farmers were stumped. The production of the next crop was abysmally reduced to half. Fuel inflation and food inflation were spiraling out of control now.

Chinese debt was mounting like a medieval money lender. Years of mismanagement and corruption had debilitated the entire system. Currencies weaken to historical low. Imports were halted. Power supply in absence of imported coal was brought to grinding halt.

Finally the finance minister declared that Sri Lanka is left with only US$ 25 million of foreign reserves. The announcement made the running of the nation impossible.

Forget import and foreign currency debt payment, even servicing the interest on the borrowed capital was improbable.

Sleeping Sri Lankan citizens suddenly awoke from their deep slumber. Now it was free for all. Burning, looting and destroying public property is an ordinary expression of a mob. In the end Sri Lankan got nothing. The Rajapaksa brothers resigned and ran away to safety leaving the nation burning to its fate.

Nearly 2.2 cr citizens are clueless about any Governing idea. All has happened due to the culture of freebies and huge subsidies. The cheap political gimmicks to run a nation without any vision for state have been a trademark of communist ideology.  The borrowing to meet revenue expenditure is the most populist method for any incompetent government. And thus the fate belied the citizens of this Island nation.

India has extended support of a credit line of 6 Billion $ to address the immediate and urgent needs. While India stood shoulder to shoulder with the Island Nation, the Chinese who have inflicted most of the pain to the island nation is conspicuous by its absence again. Another Chinese back stabbing.

 

 

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