Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

Post by cpursley » Wed, Jul 13, 2022, 5:51 AM UTC

epistasis wrote: post #53

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

I've been reading a lot of Soviet history lately and it provides a source of a huge number of similar agricultural disasters. Both Russian and Chinese attitudes towards agricultural peasants has been that they are dispensable humans, and it shows in how these countries have had disasters: * collectivitzation leading to the Holodomor in Ukraine, mass famine in Kazakhstan, and hunger throughout the USSR, killing millio…

Post by InvertedRhodium » Wed, Jul 13, 2022, 6:07 AM UTC

FooBarWidget wrote: post #131

vishnugupta wrote: post #120

Earlier quoted context omitted.

> In other words, what has changed It's often a series of mis-steps that lead to catastrophic failures such as being suffered by Srilanka. Here are a few that come to my mind, in no particular order. 1. Tourism took a big hit due to COVID lockdowns. 2. They took on huge debt from China to fund their massive infrastructure developments with close to zero plan as to how to reap the benefit of that infrastructure. For i…

#2 is actually false. Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones. See this detailed report by The Atlantic: The Chinese ‘Debt Trap’ Is a Myth https://www.theatlantic.com/international/archive/2021/02/ch... And this study by British campaign charity Debt Justice, which found that the situation in Africa is simil…

Post by randomperson_24 » Wed, Jul 13, 2022, 6:12 AM UTC

FooBarWidget wrote: post #131

vishnugupta wrote: post #120

Earlier quoted context omitted.

> In other words, what has changed It's often a series of mis-steps that lead to catastrophic failures such as being suffered by Srilanka. Here are a few that come to my mind, in no particular order. 1. Tourism took a big hit due to COVID lockdowns. 2. They took on huge debt from China to fund their massive infrastructure developments with close to zero plan as to how to reap the benefit of that infrastructure. For i…

#2 is actually false. Only ~10% of Sri Lanka's debt is Chinese. The majority is from western private market lenders. Chinese debt also have lower interest than western ones. See this detailed report by The Atlantic: The Chinese ‘Debt Trap’ Is a Myth https://www.theatlantic.com/international/archive/2021/02/ch... And this study by British campaign charity Debt Justice, which found that the situation in Africa is simil…

Post by imtringued » Wed, Jul 13, 2022, 6:18 AM UTC

drdeca wrote: post #129

krainboltgreene wrote: post #86

Earlier quoted context omitted.

it's two words man

Huh?

Post by [deleted] » Wed, Jul 13, 2022, 6:20 AM UTC

01100011 wrote: post #142

Sri Lanka is the first of possibly many countries to fall or suffer serious consequences in the next year or two. Inflation, coupled with a rally in the strength of the US Dollar, is going to push many smaller nations into resource shortages and ultimately towards revolution. Even many of the major world currencies are doing poorly. The Euro is tanking(back to parity with the dollar, for now, but it may go lower). Th…