In recent days, due to sovereign debt default, Sri Lanka declared national bankruptcy, the president fled, and the entire Sri Lanka is in a state of anarchy. It is basically okay to say that the country collapses. However, many Western media blame China for Sri Lanka's collapse, which is the so-called "debt trap".
But is this really the case? Was the Sri Lankan government’s collapse caused by China’s “debt trap”? Faced with such a big lie, Sri Lanka's own scholars could no longer stand it and publicly stood up and rebuked the West: Stop talking nonsense!
(After the Sri Lankan government went bankrupt, a large number of senior officials fled, and people stormed the presidential palace)
To talk about the collapse of Sri Lanka, you must first understand this country. Sri Lanka is an island country in the Indian Ocean with an area of approximately 65,600 square kilometers and a national population of 21.92 million in 2021. Sri Lanka and India face each other across the sea and are important trade transit points in the Indian Ocean. However, this country has basically no industry. Its economic pillars mainly include three aspects: agriculture, tourism and dispatched labor services. If it develops normally, Sri Lanka's economic level is not bad. According to statistics, Sri Lanka's total GDP in 2020 was US$80.7 billion, and per capita GDP was US$3,682. Although the overall level is not high, at least there should be enough to eat. The current situation of government bankruptcy and national collapse is mainly the result of a combination of internal and external factors.
(Sri Lanka, a picturesque island country in the Indian Ocean)
Let’s talk about external factors first. Sri Lanka’s economic pillars are mainly agriculture, tourism and overseas remittances income (that is, the foreign exchange sent back to the country by Sri Lankans who work abroad), but in 2019 A terrorist attack broke out in Sri Lanka in 2018, resulting in a sharp drop in tourists. In 2020, the new crown epidemic broke out. When the epidemic finally eased this year, the Russia-Ukraine war broke out again. About 70% of tourists in Sri Lanka come from Eastern European countries such as Russia and Ukraine. , so after several years of blow, Sri Lanka's tourism industry has suffered a serious setback, and its annual foreign exchange earnings have been reduced by at least US$3 billion.
The situation in agriculture is similar to that in tourism. The main consumer markets for Sri Lankan black tea are also countries such as Russia and Ukraine. The Russia-Ukraine war caused Sri Lanka's black tea exports to plummet by 70%, and a large amount of black tea was backlogged in warehouses and could not be sold. Finally, the same goes for remittances. Affected by the double blow of the epidemic and the Russia-Ukraine war, the global economy is generally weak. Compared with before the epidemic, the number of Sri Lankan laborers sent abroad has also dropped significantly, and the income from overseas remittances is less than a fraction of previous years.
(Tea is Sri Lanka's main export commodity, " Ceylon Black Tea " was once world-renowned)
While income has dropped significantly, Sri Lanka's expenditures have been rising rapidly. Since Sri Lanka cannot be self-sufficient in food, Sri Lanka spends a large amount of foreign exchange to purchase food every year. According to reports, about one-third of Sri Lanka’s annual foreign exchange expenditure is used to purchase food. After the Russia-Ukraine war, since Russia and Ukraine are both global food Russia is a major exporting country, and Russia is also a major energy exporting country in the world. The war between the two countries directly led to a sharp rise in global food and energy prices. It is not surprising that the Sri Lankan government fell into bankruptcy and collapse when its revenue dropped sharply and its expenditures soared.
(Sri Lanka suffered a terrorist attack on April 21, 2019, which seriously affected the local tourism industry)
At the same time, from the perspective of internal factors, Sri Lanka’s internal affairs operations in recent years have actually laid the groundwork for the current collapse. First of all, as an agricultural country, keeping people fed is obviously the most important task of the government. However, the Sri Lankan government followed the example of developed countries in Europe and the United States and engaged in so-called "organic agriculture", completely abandoning the use of chemical fertilizers and pesticides, resulting in an instant reduction of three-thirds of agricultural production. One or even half! There was not enough food to eat originally. Now Sri Lanka has to spend a large amount of foreign exchange to purchase food from abroad. Moreover, "organic agriculture" has also affected tea cultivation, which has not only led to a significant reduction in Sri Lanka's tea production, but also led to a decline in quality, thus affecting exports.
(A country that lacks oil and coal, but uses a lot of fossil energy, which greatly consumes Sri Lanka’s small foreign exchange reserves)
Secondly, Sri Lanka, as an island country in the Indian Ocean, is very rich in solar energy, wind energy and tidal energy, but The territory is small and lacks fossil energy such as oil and coal. Therefore, according to the basic plan, Sri Lanka should vigorously develop the clean energy industry mainly based on solar and wind energy. However, the Sri Lankan government has concentrated its efforts on launching a number of fossil energy companies. In order to ensure the national power supply demand, Sri Lanka spends a large amount of foreign exchange to purchase grain every year. At the same time, it also has to spend an equally huge amount of foreign exchange to purchase oil, coal and other energy sources, thus making the already overwhelmed economy even worse.
(Sri Lankan President Goyabatta Rajapaksa, the one who ran away not long ago)
Third, in the past decade or so, the Sri Lankan government has always been keen to imitate the political and economic systems of Western countries and follow suit. The so-called liberal economy blindly expands opening up to the outside world but does not take into account Sri Lanka's own special situation. After all, for a backward agricultural country to imitate Western developed countries in pursuing a "liberalized economy", the outcome is destined to be tragic, and the reality of Sri Lanka has indeed proved this.
Finally, the Sri Lankan government has serious corruption and nepotism problems. Sri Lankan President Rajapaksa can be said to be nepotistic for many years. Many senior government officials have the surname "Rajapaksa". It is obvious that the president has turned the country into Since most of the important government positions are held by relatives of the president, corruption and political chaos are rampant throughout Sri Lanka. Even when there are signs of crisis, there is no adequate response, so the country will eventually move towards a step-by-step direction. collapse.
(China’s largest project in Sri Lanka, Hambantota Port , is also a frequent target of attacks by Western countries)
A long time ago, Western politicians and some media led by the United States have continuously accused China of promoting the so-called "debt trap" Diplomacy, now blaming China for Sri Lanka's "bankruptcy," claims that China's massive loans to Colombo have dragged the country into a "debt trap."
In response, Maya Majueran, director of Sri Lanka's "Belt and Road Initiative" (brisl), recently published an article in China Daily saying that the so-called "China debt trap" is a conspiracy theory, and behind it is reflected the The United States has led the campaign to demonize and obstruct China’s “One Belt, One Road” initiative. This is actually very easy to understand, because China sincerely helps Asia, Africa and Latin America underdeveloped countries strive to develop their economies and improve their social development levels. However, Western countries believe that China’s behavior threatens Western interests, so they fabricated the so-called "debt trap" " lies to deceive the world.
(Sri Lanka’s foreign debt details)
It should be pointed out that Sri Lanka does owe debt to China, but its debt to China only accounts for about 10% of Sri Lanka’s total foreign debt, while its foreign debt to European and American capital markets accounts for about 47% of Sri Lanka’s total foreign debt. It is clear who created the "debt trap" in Sri Lanka.
In fact, there are sensible people in the West. Recently, the British charity "Debt Justice" released a report, citing data from the World Bank , the International Monetary Fund and other institutions, and believed that the debts borrowed by African countries from Western private financial institutions were borrowed from China’s debt is three times higher and the interest rate is twice China’s, thus proving that the West is the real driving force behind the Sri Lankan government’s bankruptcy. The so-called "debt trap" in China is essentially a big black pot placed over China's head.
(A total of 10,000 tons of rice donated by China to Sri Lanka are used to support the Sri Lankan student meal project. The first two batches of 1,000 tons each have arrived in Colombo)
Although the government has gone bankrupt, the lives of the Sri Lankan people must continue, and To get out of this predicament, Sri Lanka's best choice now is probably to stay close to China and rely on China's huge consumer market and production industries to stabilize Sri Lanka's economy and tide over the difficulties as soon as possible.
