Sri Lanka Economic Crisis - The Symptoms, Causes, and Possible Cures

Abstract

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Sri Lanka is going through a major economic crisis. There is an ongoing shortage of fuel, food, electricity, and medicines. Prices have been going through the roof. There is a scarcity of things and the life of the common man has become extremely difficult. This paper looks at the main symptoms that have plagued the island nation. Further, it analyses the chief causes of these symptoms, including how the country has fallen into the Chinese debt-trap. The sources of these data are secondary, from material published in different journals, magazines, and online sources. Some of the important reasons found were over-reliance on tourism and foreign remittances from expatriates for the country’s income and foreign exchange, in addition to over-dependence on fuel import and use of this fuel for its energy needs. The paper further considers the possible solutions, long- and short-term, for the nation to come out of this crisis, and how to implement them. These include export of value-added products, more foreign trade agreements, JVs with foreign companies, increased focus on MSMEs, and greater reliance on alternate energy sources.

Keywords: Sri Lanka, Economic Crisis, Balance of Trade

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