How did Sri Lanka get here?
Critics say the roots of the crisis, the worst in several decades, lie in economic mismanagement by successive governments that created and sustained a twin deficit – a budget shortfall alongside a current account deficit.
“Sri Lanka is a classic twin deficits economy,” said a 2019 Asian Development Bank working paper. “Twin deficits signal that a country’s national expenditure exceeds its national income, and that its production of tradable goods and services is inadequate.”
But the current crisis was accelerated by deep tax cuts promised by Rajapaksa during a 2019 election campaign that were enacted months before the COVID-19 pandemic, which wiped out parts of Sri Lanka’s economy.
Source: IndianExpress
Hell has begun in #SriLanka. The state is unable to pay civil servants, the country has run out of food and fuel. Now there are three tankers with oil in the port - and there is no money to pay for them at all. #SriLankaCrisis #SriLankaProtests pic.twitter.com/3bLvQCW5jg
— Anonymous Operations (@AnonOpsSE) May 21, 2022
