steven or video agency roughly. all right, i'm to on youtube and with me, ah, for 4 months, protesters called for new leadership as for longest, filed into a devastating economic crisis. nation and you're in month of double digit inflation, rolling power blackouts and severe shortages and food and medicine. sco longest form reserves are depleted to a point that it can no longer afford to pay for a central imports as the country defaulted for the 1st time in its history. so how

did it get here, and what are the repercussions? i'm christy i and you're watching the cost of everything. ah, so how this gridlock i get to this critical point? well, there is a combination of compounding factors like money creation, unaffordable tax cuts, a nationwide policy shift to organic or biological farming cobra, which clots as tours on trade and economic mismanagement. it's hard to really pinpoint the blame when it's really just a cascade of events. the government now lack sufficient warm reserves to pay for fuel and other key imports. and as we've discussed previously, fuel is the literal life, blood of nations and powers. everything from industry to basic heating and keeping the life on at home. for long as also a trade dependent economy and the country is very few dynamic exports and the

global price and supply side chalk have really disrupted the sectors severely. for instance, so long as textile factories were once considered vibrant and promising. but now the whole industry has come to a halt because of power cuts, and to top it off, the government's policies of tax cuts in 2019 and unsustainable welfare measures, deprived the treasury of billions of rubies. to finance the resulting fiscal deficit. the government went on on a money printing spree, heating up the economy, and exerting downward pressure on the ruby. and for more on this, we bring you a sancho. we just think, research fellow at the institute for policy studies in sri lanka. so what brought through longer to this crisis in the 1st place, how did it run out of foreign reserves? if you look at the root cause of this crisis,

we need to go back in history. because after the independent link, i was experienced into kind so deficient when was the trade deficit and the the budget. and then we had to finance the definition 1st. it was muslim, bilateral donna barry's club. don't us and the friendly nation for lake india. but around after 2 doesn't kevin phillip started to bear. okay. really from the international capital . my because they mass the international. so in between 2000, i think 2009 to 2018 period to cover the road to 14000000000

u. s. b. in this form, so short to match were in and also high interest loan. then came the code 19, reduced our returns into the country and also totally wiped out. these 2 are tourney, and 2018 for lunch. and about 4500000000 in touring, but in 2021, it was just less than 1000000000. so the things affected for in so proficient i know doesn't go into one and 2022. we had low 4 in green so so the jeff acted the input so for essential committee and government

tried to maintain artificially low rate though for him refocused depleted. finally longer government had to let it go. the didn't rate decorated by about 80 more than a both and in the fear. so this is the situation right now by april 2022 and go ahead to suspend all the dead payment if it can because that's the default situation. so these days longer government that, you know, lived in a negotiation with the pretty to. ready to start because possible

i am if they loved, if can continue to relate to restructuring process. and now are there any other follow effects of this crisis, or is this isolated? is sca longer here? are there any knock on effects or any other nations? we can see the consequences of this financial crisis in the domestic economy of fielding, the shortage if you need a good feel and if not in a position to finance the votes as usual, for example, our phoebe and cooking gas shortage. but right now it is kind of east because the government views in drill or asian, it is. busy getting really well right now. so people have

a feel for day to day activities though it is not like before. and the same thing is what if anything goes it couldn't get however, they are a lot of import control, seeing if it feeling i cannot to learn in the boat. so when he goes it's bad right now and you in the lot of important for these signs are in the economy and then industrial like construction industry, if affected because of the it's crazy mainly due to the boats content. and if i know

most of you, the high inflation rate within the i is it that the foot board and inclusion is very high, especially i think didn't last month the consumer price index. it was like 9 to one year. right. so it's about 9 different this crisis may not affect the other countries like the i will be no contingency. because like if the small economy takes about $80000000000.00 you if the economy so there will be no fuel. contagious effect on the economy like go trade in or not trading. ready so the

credit to the only avenue that lender may affect their country, our credited to our credit, just some kind of use like china, india jap, and they have a really bright, it loads to our country land. these are really big economy. so i think the amount of loans are added to feel like that may not affect the economy. you wouldn't do the, i will be some delays in payment, especially if i did turn will be a good up on the school and the say bought, i mean some of the lower and real time to be

a big but i think it is about less than 20 believe i think the government, the intention is to restructure about 10000000 by level law and then 9000000000 of international. so thank you so much for coming on a sancho. we thing a research fellow at the institute for policy studies and sco longer sco longer has been heavily reliant on credit lines advanced by his neighbor india to purchase fuel in recent months. but now the government is struggling to secure fresh fuel shipments to replenish stockpiles, as banks are reluctant to accept letters of credit when there's already $700000000.00 in overdue payments. the rapid decline of the countries middle class has plunged the country further into turmoil. the middle class is no longer able to

maintain their consumption, which is a pretty big problem in a country where consumer spending makes up 70 percent of its g d p. and when we come back, are we witnessing the worst economic crisis in so long as history and assault what countries are extending at hand to the asian country and at what price will have everything for the brand? ah ah ah, the claims of the king of the belgians leopold the 2nd to the congo were finally

authorized by the leading european countries in 1885. in the very heart of the african continent, a state under the rule of the belgian monarch was declared. since the beginning, the congo free state was total may him for the local population and functioned as a universal concentration camp. the majority of the population, including women and children, were forced to work on the rubber plantations. those who failed to fulfill their quota were beaten and mutilated to keep the congolese people under control. the king set up the so called forest bleak which were punitive detachments that cast terror on the captured country and its inhabitants. fearing that their subordinates would simply waste bullets hunting for wild animals. the officers demanded that the soldiers gave an answer for every bullet used, and as proof presented a chop hand of an african,

it was not uncommon when trying to justify the use of the ammunition. the colonist amputated the hands of not only those who were dead, but also of those who were kept alive. the atrocious exploitation of the congo turned into a real genocide. in only 20 years, the policy of the belgians led to the death of nearly 10000000 people alongside the holocaust. that genocide of the congo population is considered to be one of the grimmest pages in the history of mankind. blue already with for to get those to sub with ship with

use a cool discuss that with the way it will do with with my service. with

me, we are witnessing the worst economic crisis and for long as history since it's independence. and now the economy has collapsed and the country has run out of the money. it needs to import essentials. so what constitutes as an essential, are talking about basic items here. things like fuel, food and fertilizer. crop yields are shrinking from the lack of fertilizer which will spin up into a serious food crisis. in a recent assessment by the us, food and agriculture organization. 6.3000000 people. nearly 30 percent of the population are food insecure, 30 percent. this is caused by the record 90 percent food inflation, the nation a thing which makes staples such as rice unaffordable for millions of families. the

country is usually able to grow enough to feed its population of 22000000, but due to dwindling yields from 2 consecutive harvest, failures from shifting to biological farming. things are now looking bleak. around 200000 fishermen are also out of work because they do not have fuel for their boats . and meanwhile, china has also loan a substantial amount of money to screw lanka. china is the 3rd largest creditor after japan and the asian development bank. rather than thinking china screw longer is instead laming china for exacerbating the crisis. scale longer has bawled heavily from china over the years to plug a budget for falls and trade deficits. but much of the money has been squandered on infrastructure projects that are part of china belt and road initiative. and let's break this down further and bring in aleisha where our research fellow at the institute for policy studies in sri lanka. thank you so much for joining us from

there. so starting off, what do you think of this? do you agree or do you think your longest economic trouble stem from china and taking on too much debt from china? because crisis was already going by 2019 become a growth rate, was at no time lower. it took 2.3 percent in 2019. so with this low growth rate, you're not having so many economic problems in the country. it's involved huge budget and a massive trade which was on more than the g d p. and that was out lots to g d p ratio because about 84 percent and the majority of dick was denominated in point currency. so silica was already having so many problems before the pen to me and the panoramic in 2020. it's

a bit more for the ongoing problems that we had from beforehand. it's so foreign currency or earning from foreign exchange was the key component of the silicon economy answer not going to economy the light loss on earnings from the patio, the torrison effect and earnings from work. remington says, but however, the turn of dependent be all these foreign exchange earnings. but a huge blow. if we look at the perils victor pattern so or does decrease and at the to same time that will supply side b shows because lots of input both from outside the country. so that was important issues. but with the demand decline for supply side, you should earning from the we're going down at the same time, no,

the toward them picked up was a large foreign exchange trailer that also was already having issues because of the east of bombings in 2019. and then along with these and then we had to travel restriction funding from the toilets. and that was also decline to a near the only or the worker in terms of what kind of perform better than expected in 2020 of with the growth of 5.8 percent to over 7, beginning with dollars. however, this was not and still all the 3 lathan economy in place because there were a lot of dick that was coming due and i went ahead and get these on time. and that's as well as issues in the trade and having to import lots of goods of at the higher exchange, i'm getting

a lot of pressure on the exchange rates. create a lot of issues in the foreign exchange front. now, when we talk about the foreign exchange, artificially maintained the exchange rate at about $200.00 to put us down for a long time. and that creates a lot of impact on the remy turns in. but what can be done because the informal channels for me does the ready to high up change made so many people didn't want to send through the palmer, janice. michelle foreign currency coming into the country took a job to keep towards the end of some 2020 by 2021. the officers should not decline significantly. like in 2019 we had about $4600000000.00 us dollars. that results. but by 2021

decline to $1800000000.00, which was hard. and then in 2022 it declined father. we call the bush and, and political issues that were going on and down the existing pressure in the foreign currency. the fact that you know, sudden floating off against the us dollar, and then that was a huge depreciation 3 lamp and will be so all in all at one point she was as low as the t 1000000. the foreign exchange reserves in the $150000000.00 only as one fund. so this is how the situation evolves to become a tie and the foreign exchange situation in the country. and now what are the next steps for sco lanka? is there a way out of the debt crisis in terms of the crises?

the, the whole gamut of thing for right now is in the ditch restructuring the work of the i m. s. well probably we have reached the extended fun facts of the day of the month for us $1.29 for 48 month land. so with this, what i spent into achieving this story can me ability and also achieved the ability. so in terms of the ability to, to need to do is we have to kind of get the support of creditors and their willingness so that we can restructure the debt and paid over a reasonable time in a reasonable manner. but however, the talk going on in front and then also going forward. so we need to

secure funding as the bilateral partners all because to bridge the gap in the finances apart from that also has to control the, the cisco side of the economy. now that the government revenue and the government expenditure is maintained within a ranch. and as part of these i, you, i did the restructuring package, substantial component, the macro stability really was supposed to be and addressing last making government institutions and also possibly looking at the non public sector workforce. the currency and credit of a nation really all depends on confidence, and now that longer has be faulted. there's absolutely no confidence in the currency anymore. the government or the credit of the nation for outside investors . so can you longer rebuild itself?

i think the, the confidence in the currency, the critical issue is one of the main reasons why, even though 3, nothing on my going in there any tend to do before. so then obviously the party. now investors also have a low confidence that you're not going economy and they've been not send as much as they would otherwise. so the on demand, the thing it's to take out of the macro economic indicated in the country and, and so that was not me stability that is consolidate and that is a realistic exchange rate. and then there's some stability and exchange rates and very commitment by the political parties and the lamp and government towards tabulating the economy. and that is consistent policies coming up so that that is in the to invest. and now how are the daily lives of citizens being affected by

this crisis? what hardships are they facing? the 3 long population severely affected by the people. on the one hand, the inflation is having a huge impact on everybody's lives, lifestyle, and much thing, par, and them all. so that is a little shar, pages actually in terms of the, the full 10 months. the distribution of was, as you saw today in some sort of transportation issues, but now it is easing off but not normal yet. so because of that, the daily life is because it would not have the public transportation as frequent as you would want to. and then that the social safety nets have to come into effect because the low income population,

it's not really struggling with this inflation and the economic situation in the country. and unless the prediction kind of coming in the night will be even worse. because the daily wage find it very difficult to meet ends with the current invention and then the, the income that they're on right now. but a show where our research fellow at the institute for policy studies and longer, thank you so much for joining us. and now as always, there are winners and losers. the losers are unfortunately, the citizens of sky, longer than nearly 22000000 people who are educated and form a solid middle class and have a median income among the highest in south asia. now the very same people are living on the edge unable to buy, even the basics. grocery shells are barren and food is expensive. a kilo of

tomatoes is selling for a $150.00 rupees, while akila potatoes is selling for $220.00 rupees. carrots go for a whopping $490.00 rupees. as transportation cost skyrocketed for farmers with no petrol. now that represents an increase of over 75 percent in the last 12 months. meanwhile, wages have not kept up. the inequalities in the countries have deepened during this crisis. as a small sliver of the population is managing just fine. wealthier belongings with access to funds outside the country can more easily ride out the inflation pressures and falling, ruthie. so how. 7 this crisis play out how well the i m f. step in to support secure langa and who will resume power. only time will tell. thanks for watching i'm christy i and i'll see you next time as we continue to break down the cost of everything. ah, yes,

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the joggers archipelago moment that she goes to san diego garcia, the largest island in the archipelago is now the location of a very large u. s. military base. you could go from med, g, i to the u. s. government to make a military base and just deported all of douglas and people from their country. so they call it returned back on the island. no, but we are fighting. that's why i'm real fighting for the right. so i, we do not consider the right to self determination actually applies to the trickle students. i don't the question of self determination. the legal advice we have received is actually the trickle. since we're not at all, not a people for me, it's time to move on and see what we can do for the child said community to return

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