The View | How Sri Lanka’s economic crisis has been decades in the making
- Years of debt accumulation, policy missteps – including a failed experiment in organic farming – and ill-conceived infrastructure projects built with Chinese funds have led the nation to the edge of catastrophe
Sri Lanka has flirted with economic crises for decades, but it is now on the verge of an unmitigated catastrophe that could quickly turn into a humanitarian disaster. Sri Lankans are already suffering from oil shortages as well as power cuts, and there is growing concern that the country – recovering from recently enacted disastrous agricultural policies – might not be able to feed its people.
As the richest country per capita in South Asia, it is worth considering what has gone so wrong in Sri Lanka.
There are a number of macro factors that have exacerbated the situation – from the effect of the pandemic on the country’s tourism industry and on foreign remittances, to higher oil prices caused by the Russia-Ukraine war. But the underlying reasons for Sri Lanka’s suffering are poor economic policymaking and decades of debt mismanagement.
