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Pic courtesy internet<\/span><\/p>\n Sri Lanka is suffering its worst economic crisis since its independence from Britain in 1948. Her foreign exchange reserves have depleted to about $2 billion and the debt obligations to be paid back this year have risen to about $7 billion.<\/span><\/p>\n <\/p>\n Chaotic Situation<\/u><\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Possible Reasons for Economic Crisis<\/u><\/strong><\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Pic courtesy: wion<\/span><\/p>\n Opportunity<\/u><\/span><\/p>\n New PM has taken over. The Indian government has so far helped Sri Lanka with billions of dollars of aid to fulfill its essential needs. China has also helped the country by restructuring some of its debt. The Sri Lankan government is also seeking help from the IMF.<\/span><\/p>\n <\/p>\n In this period of economic uncertainty, however, there is an opportunity for India to repair and restore the traditional relationship it had with its island neighbor.<\/span><\/p>\n <\/p>\n Indian Concern<\/u>. India-Sri Lanka ties took a downward turn in the last two odd decades, with Sri Lanka moving into the Chinese camp. It firmed up a series of agreements with China (including a $1.35-billion deal to construct the coal-fired Lakvijaya Power Plant in Puttalam, and the controversial Hambantota Port). Sri Lanka eventually lost the Hambantota Port when it began to struggle with the repayment of loans. It resulted in the Port and more than 15,000 acres of land being handed to Beijing in a 99-year lease. India was right to worry when the leases gave China an advantage for using it as a possible strategic military port for its Indian Ocean fleet.<\/span><\/p>\n <\/p>\n Realisation<\/u>. Sri Lanka\u2019s ambitions for a lucrative future, conveniently financed by Chinese loans, have been upset by the downturn in the Sri Lankan economy. Sri Lanka has realised the limits of economic and strategic cooperation with China the hard way. Furthermore, the Sri Lankan leadership has realized that India has always stepped in when Sri Lanka needed it, and the relationship with China could not be at the expense of India. T<\/em><\/strong>o alleviate India\u2019s concerns, Sri Lanka is trying now to balance its relations with India. \u00a0<\/span><\/p>\n <\/p>\n Magnanimous Approach<\/u>. \u00a0As Sri Lanka struggles, India should embrace the spirit of \u2018Neighbourhood First\u2019 and restore the image of a traditional partner with Sri Lanka. India should extend support through supplies of food, medicine, and other essential goods. India has provided Colombo with a $1 billion line of credit for food, medicine, and other essential items and $500 million worth of fuel. It should not look for economic concessions or burden Colombo with additional debt, but jointly assist the island to recover from the economic devastation.<\/span><\/p>\n <\/p>\n Focus<\/u>. \u00a0Indian assistance should be focused on humanitarian assistance, capacity-building, human resources development, infrastructure development, agricultural development, and financial management.<\/span><\/p>\n <\/p>\n Lessons<\/u><\/strong><\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Bottom Line<\/u><\/span><\/p>\n A strong economy is essential for development and survival.<\/span><\/p>\n <\/p>\n Question<\/u><\/span><\/p>\n Are we doing things right?<\/span><\/p>\n is their scope for improvement?<\/span><\/p>\n \u00a0<\/u><\/span>Suggestions and value additions are most welcome<\/u><\/span><\/span><\/p>\n For regular updates, please register here<\/span><\/p>\n\n
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