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Torched: Sri Lanka's Economy

The country's collapse due to fuel shortage

The US embargo on Russian oil and gas nearly destroyed the Sri Lankan economy as it depends on imported energy resources. This ongoing fuel shortage caused extreme inflation of 117% and incited riots. Today the island is shaken by protests against the government. ‘It’s been a perfect storm. On the one hand, the foreign debt grew, and on the other hand, fuel prices went up. That caused an avalanche effect,’ says Alexey Kupriyanov, the senior researcher at IMEMO.

It was the worst crisis in Sri Lanka since 1983, when the country was in the middle of a civil war. ‘So I think it has affected everyone’s lives in Sri Lanka. You have seen the crisis and the shortages,’ says Professor Nermal Jewasiri from the University of Colombo. The external debt of $51 billion stops Sri Lanka from asking for loans from international banks, and it has no means to deal with the collapsed economy by itself. Shortly after the film was made, the riots finally forced the Sri Lankan government to resign. How did the country sink into such chaos?



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