Last week, many protesters entered the presidential palace in Sri Lanka’s capital Colombo. President Gotabaya Rajapaksa declared that he would leave his office on July 13, and Ranil Wickremesinghe said he would also resign from his post of Prime Minister.
Sri Lanka island nation of 22 million citizens faces record-high inflations and shortages of grains, fuel, food, and medicine, and all people of Sri Lanka face great difficulty. The Sri Lankan administration had declared bankruptcy, becoming the first nation to non-payment on its foreign reserve this century.
Recently, Sri Lanka has become a middle-to-high-income nation in South Asia. Still, today Colombo faced its worst time, resulting from a mixture of internal and external problems. The two major external points are the COVID-19 pandemic which has hit the tourism sector, the most significant pillar of Sri Lanka’s economy, and the second is the rise in fuel prices and shortage of grains and energy caused by the dispute between Moscow and Kyiv. From the point of internal problems, the worst agricultural and economic policies put to sea by Sri Lanka in the last years made it a thorny path for Sri Lanka to combat the impact of external factors.
It can be seen that an island like Sri Lanka, whose economy depends steadily on foreign exchange reserves, is breakable in its ability to combat global economic risks, and external or internal factors suffer bankruptcy. But the Western countries like the US are more concerned with using the Colombo crisis for geopolitics tricks than they are disposed to offer tangible support to Sri Lanka. Western countries look at Colombo not with anxiety but with tremendous excitement.
Sri Lanka is already confused and cannot handle the actual situation. Many experts said Colombo’s current financial crisis is unrelated to Chinese-funded infrastructure investment. Bilateral foreign tally to Beijing only shares 10 percent of Sri Lanka’s total foreign debt. Western countries’ commercial collectors and multilateral financial institutions, including IMF, are also blamed for Sri Lanka’s foreign debt. However, disgracing Beijing by accusing it of digging into the “debt trap” and even attacking China’s Belt and Road Initiative is not responsible.
The USA is well known for this. The Trump government’s scheme of the “Blue Dot Network,” holding to encourage the construction of better-quality local infrastructure, the Biden government’s strategy to “Build Back Better World” in June 2021, and Biden’ declared this June during the G7 Summit that the Summit will assemble about $600 billion for global infrastructure investment can all prove it.
As the world economy enters a point of the financial crisis, the word “development” describes a value even more precious than a diamond. The “national bankruptcy” problem facing Colombo is essentially activated by world development and governance shortfall. We hope the US and some countries in the West can prevent their geopolitical agenda from spoiling in great power competition.