Which continent does Sri Lanka belong to? Why is this country completely bankrupt?

On May 7th, 2022, an author named "Know What You Know, Cover Your Ear" wrote an article entitled "The First Bankrupt Country under Epidemic and War". This article is definitely not alarmist. After all, on May 14, 2022, Sri Lanka's finance minister said that Sri Lanka's available foreign exchange reserves were less than $50 million. However, the cruel reality is that by 2026, the Sri Lankan government will have to repay more than $25 billion in debt. Then it is obvious that Sri Lanka is unable to pay its debts.

First of all, we know that Sri Lanka is an Asian country and its name is Ceylon. It is a tropical country located on the equator and is known as a pearl in the Indian Ocean. Sri Lanka's beautiful natural environment is a paradise on earth that countless foreign tourists yearn for. However, since the new type of coronary pneumonia, Sri Lanka is in a serious economic crisis. By May 2022, Sri Lanka had successfully defaulted on its foreign debt of $78 million, and reluctantly announced that it would violate the treaty, becoming the first country to default on its foreign debt since the 20th century.

So why did Sri Lanka go bankrupt? Bian Xiao thinks there are several reasons. 1 The reason is that the economic pillar of Sri Lanka is mainly tourism. However, under the influence of temperament concerns, the door of Sri Lanka was forced to close. Because not only Sri Lanka's global tourism stopped, on 20 19. Because Sri Lanka relies too much on tourism, without the support of tourism, Sri Lanka has lost a lot of tourism income. In order to survive, Sri Lanka was forced to borrow money from other countries. However, his loan amount is huge, but he is unable to repay it. This triggered a political crisis, and it was even reported that the former prime minister had to resign to quell public anger.

Then Bian Xiao thinks the second reason is that Sri Lanka has no fuel and needs to import it. In the middle of the epidemic, the government closed non-public services to save fuel. Although Sri Lanka has taken various measures to buy fuel from foreign countries, many countries are reluctant to sell oil to Sri Lanka because of its low credit and low repayment ability.

The third reason for Sri Lanka's lack of money is insufficient foreign exchange reserves. Due to the shortage of foreign exchange reserves in Sri Lanka, it is undoubtedly a very big blow to Sri Lanka, an island country that relies on imported materials. Coupled with the devaluation of the country's currency, it will be more difficult for the country to borrow in the future. To sum up, Sri Lanka went bankrupt for these reasons, and it is generally believed that the biggest bankruptcy reason is novel coronavirus. After all, because of COVID-19, Sri Lanka has lost the support of its pillar industries and tourism.