Sri Lanka Defaults on Debt, Blaming Covid, As Financial Crisis Deepens
Sri Lanka’s central bank said on Tuesday it had become “challenging and impossible” to repay external debt, as it tries to use its dwindling foreign exchange reserves to import essentials like fuel. Reuters has more.
The island nation’s reserves have slumped more than two-thirds in the past two years, as tax cuts and the COVID-19 pandemic badly hurt its tourism-dependent economy and exposed the Government’s debt-fuelled spending.
Street protests against shortages of fuel, power, food and medicine have gone on for more than a month.
“We need to focus on essential imports and not have to worry about servicing external debt,” Central Bank of Sri Lanka’s Governor, P. Nandalal Weerasinghe, told reporters.
“It has come to a point that making debt payments are challenging and impossible.”
Weerasinghe said the suspension of payment would be until the country came to an agreement with creditors and with the support of a loan programme with the International Monetary Fund (IMF). Sri Lanka starts formal talks with the global lender on Monday for emergency loans.
The country has foreign debt payments of around $4 billion due this year, including a $1 billion international sovereign bond maturing in July. Two coupon payments are due on Monday.
“It is a default. This was inevitable,” said Murtaza Jafferjee, the Chief Executive of brokerage J.B Securities.
“This is a positive for the economy because we were using scarce foreign exchange resources to service our debt when we could not afford to. This will release funds for our own citizens. It was displaced vanity at the cost of our population.”
Doctors in the country have warned that the economic crisis could lead to far more deaths than the COVID-19 pandemic, as they are nearly out of life-saving medicines.
A statement from the Ministry of Finance blamed the pandemic and Ukraine war in particular:
Recent events, however, including the effects of the COVID-19 pandemic and the fallout from the hositlities in Ukraine, have so eroded Sri Lanka’s fiscal position that continued normal servicing of public debt obligations has become impossible.
It seems there’s a limit to how much countries, especially less wealthy countries, can borrow to fund lockdowns on top of the usual deficit spending. How many more countries will now default as the profligacy of the last two years catches up with them?
Worth reading in full.
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Can’t they just print some more money like we do? Maybe this is the only way the call for more restrictions will end in each country. Is that what the WEF mean when they say we will own nothing and be happy?
Because their debt is in a foreign currency and is real. We couldn’t print US dollars either.
Our ‘debt’ is in Sterling and is just a means by which banks and financial institutions get paid a subsidy from HM Treasury.
They rely upon the fact that most people are hard of accounting.
Well, “real” in the sense that any fiat is, or isn’t.
Not in the Old Normal.
Ponder this though. If we spent every penny of fiat that the State controls to buy foreign fiat, then immediately re-printed all that fantasy Sterling, what would the consequences be?
Go on…
Inflation at 100% plus
Eventually, yes. But as we’ve seen, it takes months or years for it to be acknowledged. We experienced currency devaluation at the instant that Fishy Rishi magicked up half a trillion and the rest, but people are naturally averse to admitting to the consequences, and there’s a lot of hysteresis in the system.
That’s why it always looks so attractive to print today and worry about it tomorrow.
The Global Public/Private Partnership that we are signed up to means that everything will be owned by the Global institutions, everything on the planet, sea air land, You will own nothing, because G3p’s will own it all.
And your will be happy (or else)
Reminds me of the Brit in an American shop who was told to “have a nice day”. And responded, “I have other plans”.
Own nothing and be enslaved to the system with nowhere left to defect more like. It was / is all part of the plan, there is no way on earth that TPTB did / do not realize the consequences of their actions, the global leaders are all working in lockstep and coincidentally members of the World Economic Forum. Change is accelerating, they’re doubling down on all the evil.
I suspect heavily indebted countries are going down the pan. Nothing to back their currencies up just the continuation of the Ponzi scheme. Those nations with commodity wealth will do better.
Party over if dependent on tourism.
I had a thought that some of the least well off countries were keener than others to adopt the totalitarian Chinese Covid related anti-people measures e.g. Italy.
Then again, so did VIC in Australia, but then they had already been sold to China by Andrews treasonous govt via the Belt And Road deal.
Italy, Spain, Greece all look ill as it stands in terms of the EU
Printing money doesn’t work as most of their debt will be in a foreign currency so the more they print the less their currency is worth the less foreign currency they can buy.
so default on the debt. Those who are owed have to right it off and claim on their CDSs if they have them which will bring down the writers of the CDSs….
Except the Chinese who have spent 20 years ‘investing’ in these countries ie lending them money against collateral
Default on the loan and the Chinese now own your airports, railway, mines and natural resources.
All part of the Chinese plan maybe?
Together with the plan of whoever decided that closing down the world economy would be the best response to COVID. “Lives are more important than the economy” said the idiots at the government press conferences. And now Sri Lankan lives are the first to demonstrate that economy=lives.
That last comment put me in mind of this…
https://fsr.nl/perspective/article/2017-07-27-germany-buys-greek-airports-and-maybe-more
https://popularresistance.org/germans-to-run-greek-airports-in-wave-of-bailout-privatisations/
So, Germany has the keys to one of Greece’s largest industries…
Belt and road initiative. One way or the other….
some sign up for ideological reasons e.g Victoria, others are forced into it.
I suppose the former is a form of bribery and second is blackmail.
Adopted from the Washington Consensus / Structural Adjustment Plans of the 1980s.
One step closer to a global currency social credit system.
Can someone explain in layborg’s terms what the consequences of this will be?
This leaps out:
If true, then is it positive for everyone to do it? Why aren’t we doing it?
Probity? Reputation? I refer the Collective to recent events in Downing Street. That’s Old Normal thinking.
Do they mean less worse than prioritising paying the debts?
My understanding is that IMF bailout loans come with a whole range of ‘conditions’;
1. Follow ALL WEF agendas, especially 2030
2. Instigate ALL WHO initiatives
3. Jump on board the Green Net Zero train to Hell
Does everyone have to become trans and gay as well?
It has the effect of population reduction so probably. Or at least more social credits for being so in the future.
“Woke” is just the soft launch of the social credit system – practice aligning your views (and where you prefer to put your genitals) now as fairly soon it’ll cost ya…literally.
Well it would assist with the depopulation programme.
I have long thought that the elites pushing every form of degeneracy was designed to assist with depopulation.
That’s what this is all about. Sovereignty is being surrendered.
To make this even more ridiculous the IMF isn’t a wealth producer, it is just a great big leech sucking goodness out of the planet.
“I’ve never had anything you doctors didn’t try to cure with leeches.”
-Blackadder.
4. Sell access to your natural resources on the open market
I know a couple of Sri Lankans and they tell me it is fucked out there. Like seriously fucked. See also: Myanmar. More will follow, and I mean in the West. Look at the UK’s debt ffs.
These are countries with tinpot economies. They could never afford to shut them down, not in a million years. Crazy.
Yes. I wonder what they’ll do about it in Britain? Vote Lib Dem in protest? Write a stern letter to the Telegraph (Disgusted of Tunbridge Wells, sorry that’s probably Private Eye…)?
Surely Boris and Rishi can borrow a few £billion in the name of the UK taxpayer and bail them out?
That or let them all move to the UK if they are unable to pay their way.
F##k it, why not both?
“It was displaced vanity at the cost of our population.”
Sounds familiar.
Tory MP Imran Ahmad Khan found guilty of sexually assaulting boy, 15
More or less a normal MP then?
Certainly a normal Muzzie male.
They were recently forced to pay the Chinese $7 million for a shipload of toxic waste that was sold to them as “Organic Fertilizer”.
https://thediplomat.com/2021/11/sri-lanka-bows-to-chinese-pressure-again/
The Chinese have also taken over the port of Hambantota over another debt and are about to take over a prime development in the capital, Columbo.
They’re certainly feeling the belt part of the belt and road initiative.
Being part of the British Empire a fond memory for many.
And now the Chinese empire. They’re not stupid (the Chinese that is), I’ll give them that (though I still think they’ll be in trouble long term).
I watched Simon Reeve travels around the Indian Ocean on BBC2 yesterday, don’t know how old it is, 10 years ago? These programs are very interesting to watch now, then he was in Sri Lanka, “a thriving economy”, with a huge port being build by the Chinese.
I understand that the Chinese made arrangements with the Sri Lankan government that if they cannot repay for the port it reverts back to the Chinese, which happened a few years ago. The port is so large it can take aircraft carriers. I also understand that the Chinese have also built a large port in Pakistan. So no threat to India then, well not much.
Control a country’s ports and airports, and you control that country.
Force a country into IMF debt, and they become another WEF muppet.
There’s a pattern developing…
Times muppets…
What I want to know is why all these governments let the CCP take over the world (there’s a whole bunch in Africa too – and then there’s the Caribbean Commonwealth states).
Don’t pay or they’ll take it away.
Waiting for the likes of BlackRock and other (IMHO) WEF cabals to roll in and take over…
Blackrock, Vanguard and the rest are on the way.
It’s OK because the globalists at the WEF and something new and even more creepy called GFANZ are going to spend it all on something called ‘fighting the climate’. $130 trillion to be exact. The global GDP is only $94 trillion.
Most of us who can still think for themselves always knew this is a scam but this excellent video summarises probably our greatest threat since Hitler. Watch and share far and wide before it’s labelled ‘disinformation’ and removed..
https://www.youtube.com/watch?v=gJRP2Zm05nU
‘fighting the climate’.
There’s a picture of tilting at windmills.
The stupidity never ends.
There was a time in British history when our landscape was bathed in windmills…grinding corn into flour.
Converting a variable and irregular energy source into a storable, durable, and long lasting one.
How the chuff does any sensible, right minded, educated person believe that wind, solar and tidal energy generation will come anywhere near to satisfying the UK’s energy needs???
There has to be a mix, and nuclear has to be at the centre. It’s the only reliable, continuous, non-CO2 option.
NB I don’t believe that CO2 emissions are the global catastrophy that they are portrayed to be, so natural gas should also be part of the solution. I’m not a fan of coal powered power stations, nor fracking.
Look to the US for the problems with fracking, and look to Germany for the problems of dismantling your domestic nuclear power generation capabilities.
And if you need persuading about burning coal, research the smog in London in the mid 20th century, and the poor levels of air quality in urban areas in China.
Not in the fens they weren’t…
Ooh, bound to get a return on that. (I always wondered what global GDP is).
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Newsflash
It wasn’t covid that caused your economy to collapse, but the stupid policies you introduced in the name of public health.
Same goes for all the other countries whose government duped their population into this nonsense.
Borrowing so much that they spent most of their GDP in debt repayments probably didn’t help either? Are they another country that got into hock with the Chinese infrastructure projects? Jamaica should take note…
Massive government spending has been deliberately engineered in order to bankrupt sovereign countries.
Once bankrupt these countries will be in hoc to the IMF, World Bank and the rest. In order to service the debt the countries must surrender sovereignty. Our new leaders will be the WHO, WEF, World Bank and so on.
Given that financial systems are going to collapse it surely makes sense just to tell the above organisations to feckin do one and then start again. It’s not as if International law carries any real weight anymore. Domestic laws are simply ignored so why bother?
Huxley-Piggly-Dude, as usual, you are right on the money.
Except that, there won’t be any money, as we understand it, just UBIs, issued via CBDCs, and only if you’re a ‘very good boy/girl/whateverthefuckyoudecidethatyouallignwithtoday,ababy,asofa,achicken…Godhelpus’.
Thanks A o O.
I’m sure Greece tried that. Is there no limit to human stupidity (or whatever is driving this)?
Idiots wanted lockdowns (or at least acquiesced) and now wonder why we’re in a mess.
This would be Scotland a year or two after the cretinous screaming harpie got her wish. But it would also be fucking freezing.
Well, sadly, Sri Lanka jumped on the Covid restriction bandwaggon and so did serious harm to their domestic economy. Then much of their foreign currency comes from tourism, which fell through the floor.
Tanzania, also a relatively poor country, with an important tourist economy, chose to ignore Covid, or at least treat it as no worse that any other seasonal thing. And they did pretty well out of that, attracting tourists who were shut out of other parts of Africa.
Lockdowns were all bad, and self inflicted ruin. Period.
Makes one wonder how much the politicians in Zamunda and all the other African countries were bribed (or threatened) to go along with this shambles.
Weren’t there strange deaths for those who did not????
The Zambian president I think. Just happened to be succeeded by a lockdown zealot…
And Tanzania – John Magafuli was murdered for taking the P. He had a Paw Paw tested and it came back positive.
WEF got very narked at this.
Interesting Breitbart article about Sri Lanka offers further insight.
And another one on AlJazeera site, though only covers the last two weeks and not the causes of the crisis.
And of course, then the IMF stipulates requirements which Sri Lanka must meet in order to obtain another loan and these requirements in the recent past have included imposing lockdowns and could now include digital ID, vax passes etc for all citizens and imposition of digital currency. Our global structures have to be dismantled. We are being led to somewhere we really don’t want to be by unelected tyrants
Sri Lanka Defaults on Debt, Blaming Covid, As Financial Crisis Deepens
C1984 has nothing to do with their debt. The national impoverishment is a result of wholly unnecessary lockdown.
The Great Reset is going as planned as the indebted dominoes are starting to fall.
Remember …. you will own nothing; and the WEF really don’t care if you’re happy or not. You will do as you’re ordered.