‘India is an age-old friend of Sri Lanka’. Discuss India’s role in the recent crisis in Sri Lanka in light of the preceding statement. (150 words) [2022]
The Sri Lankan economic crisis, which began in 2019, is the country’s worst economic crisis since its independence in 1948. It has led to unprecedented levels of inflation, near-depletion of foreign exchange reserves, shortages of medical supplies, and an increase in prices of basic commodities.
The crisis has been caused by a combination of factors, including the 2019 Easter bombings, the COVID-19 pandemic, foreign exchange shortages, and mismanagement of the economy. In addition, a drought in 2016-2017 ruined crops and weakened the farming industry. The crisis has resulted in power cuts, shortages of essentials like fuel, food, and medicine, and a sharp increase in inflation.
India has played a significant role in supporting Sri Lanka during this crisis by providing financial assistance and diplomatic efforts. Key aspects of India’s involvement include:
- Providing financial and humanitarian support worth $4 billion.
- Extending a $1 billion credit line for Sri Lanka by one year.
- Being the principal source of foreign assistance to Sri Lanka, supplying more than $4 billion in loans, swaps, and aid.
- Helping Sri Lanka tackle its unprecedented economic crisis, which led to food, fuel, and medicine shortages.
- Involvement in debt restructuring talks with key bilateral creditors, including Japan and China, to help Sri Lanka recover from its economic crisis.
In conclusion, India’s role in supporting Sri Lanka during its recent crisis demonstrates the strong bond between the two nations. India’s financial assistance and diplomatic efforts have been instrumental in helping Sri Lanka navigate its economic challenges and work towards recovery.
