Sri Lanka has declared a state of emergency.

The use of social networking websites has been

prohibited. A curfew has also been imposed over the island. Thousands of people had been
demonstrating in the streets prior to this. Fuel and food are in short supply across the country.
People are furious. And Sri Lanka is in the midst of a major economic downturn.

What are the reasons behind this?

Sri Lanka was among the world's top destinations for tourism. Hundreds of thousands of
foreign tourists visited this country. Specifically speaking, 2018 was a record-breaking year
for Sri Lanka. 2.3 million Foreign tourists visited Sri Lanka. About 12% to 13% of Sri
Lanka's economy relied on tourism. The country's tourism sector, which is one of the
country's largest revenue producers, has been severely hit by the April 2019 series of bomb
bombings in Colombo. The Covid epidemic exacerbated the problem. Three churches and
three hotels were targeted across several cities, 269 people were killed in the bombings, and
45 of them were foreign nationals. 8 suicide bombers were responsible for the bombings. To
control this, more than troops were deployed in Negombo town.
Curfews were imposed, the government blocked Facebook and WhatsApp, to stop the
rumours. But doing so only heightened the religious tensions. There were anti-Muslim riots
in 2018 too in Kandy and Ampara. The government had to impose a State of Emergency in
Sri Lanka then as well. They had blocked Facebook then too. The Facebook Papers were
leaked; it was revealed that Facebook had played a huge role in these riots. Apps like
Facebook constantly encouraged communal propaganda, their algorithm spread it far and
wide and creating hatred among people and eventually, these riots broke out. The entire
tourism sector collapsed.

The government's decision to phase out chemical fertilisers in 2021 has resulted in a lower
rice yield this year. The present government, led by President Gotabaya Rajapaksa, has raised
the debt. The President, on the other hand, has attributed the issue to the pandemic. Organic
farming is definitely better for your health, better for the environment, but any decision,
irrespective of how good the intention behind it was, if it is made without thinking it through
without planning for it, it would lead to such a catastrophic result.

The Food Mafia is another cause of Sri Lanka's economic catastrophe. The government
claims that the food mafia is hoarding the food, there's a black market for even the basic
items.

Another reason behind Sri Lanka's economic crisis is Foreign Debt. This isn't a new problem.
This has always been a problem for Sri Lanka historically; it's been going on for years.

In 2017, Sri Lanka's total debt was $64 billion. 95% of the government revenue went to debt
repayment. In 2020, the debt was at $51 billion, and Sri Lanka imposed an import ban on
foreign currency to repay this debt.
China is also blamed for this. It's said that China is using debt-trap diplomacy. When they
can't repay the debt, China then confiscates the project. Chinese companies take over.

A major example of this is the Hambantota International Port, Sri Lanka. It was built in
November 2010, at the cost of $1.3 billion, with a loan from China.
But this port had to suffer huge losses. And Sri Lanka could not repay the debt. That's why
the new government decided that 80% of the stake of the port would be privatised. Due to
these reasons, the value of the Sri Lankan rupee is deteriorating rapidly. At the beginning of
March, $1 was approximately about LKR 200.

Now, the conversion rate has dropped to $1 being about LKR 300. Because the value of their
currency is falling, everything that they import, are becoming more and more expensive and
the economic conditions are getting worst day by day.