China for another $ 2.5 billions . Further , it is also requesting IMF and ready to accept its conditions and to implement reforms strongly . However , this will further strengthen its dependency , which might make it a ‘ puppet ’ in the hands of monopoly capital .
The present crisis did not emerge suddenly . It is the consequence of powerful implementation of laissez faire / liberal policies since 1977 and more strongly especially from 2009 onwards after the end of civil war which is in fact , promoted by Imperialists .
Consequently , distortions strengthened in the economic structures of Sri Lanka . The dependency well established which negated self-reliance . The continuous canvas about the crisis of Sri Lanka strongly pursued by Global and Indian media did not mention about root cause of the problem is a serious contradiction . Its focus is exclusively on two reasons . 1 ) The Government of Sri Lanka reduced the rate of Value Added Tax ( VAT ) as its final burden fall on common people whose lives are already in a critical condition due to loss of jobs and earnings owing to Covid-19 . The media which is in the grip of monopoly capital states that reduction in VAT resulted in the rise of budget deficit and lead to the emergence of present crisis .
The media did not talk about the loss of government revenue due to various incentives and concessions offered to corporate forces to improve its position in the rank of Ease of Doing Business . Like India , the government of Sri Lanka passed new Acts and reformed existing Acts to improve Ease of Doing Business . The index in this regard prepared by World Bank shows that in 2019 , Sri Lanka achieved progress to the extent of 11 places . This is acceptable to the monopoly capital as well as global media .
The World Bank reports reveal that though Sri Lanka shows reduction in the rate of Extreme Poverty , as high as 45 percent of its population live in near poverty conditions . Moreover , the reports of World Bank , further states that owing to Easter bombings in 2019
May - 2022 and Covid-19 pandemic in 2020 , as many as 50,000 people thrown into extreme poverty additionally . This resulted in the demise of five year progress achieved in reducing extreme poverty .
The mainstream media categorically canvassing that it is the serious mistake of government of Sri Lanka to reduce VAT though it is regressive and it is projected as one of the main reasons for the present economic crisis . Because , the IMF condition strongly directs the imposition of regressive taxes to raise revenue so as to reduce budget deficit . This is also useful to reduce the purchasing power of the people . Joseph Stigliz , who worked as the main economist of World Bank in 2000 ’ s stated that poverty will increase enormously in third world countries due to the implementation of neo-liberal economic policies . He expressed in the language of World Bank about the nature of natural economic crisis of capitalist mode explained by Karl Marx .
2 ) The second reason showed by mainstream media is the proposal of shifting to organic farming which is free from chemical fertilisers and pesticides . The media further states that the Sri Lankan government did not care to listen the warnings of Sri Lankan scientists that the shift to organic farming creates food shortage .
In fact , the process of shifting to organic farming yet to start because already Yela season started with the use of chemical fertilizers . The Mafia of chemical fertilizers in Sri Lanka is very strong as it is linked to the turnover of 100 billion rupees chemical fertilizers per annum . Immediately they stored and created serious artificial scarcity of chemical fertilizers . Thus , it distorted the issue .
Vandana Shiva , an environmentalist states that Global chemical industry is behind the conspiracy of blaming Organic Farming . It hides true causes of crisis . The government took excessive foreign debt for the purpose of tourism and to construct infrastructure and consequently , caught in vicious foreign debt trap . She , further states that shift to organic farming is strongly proposed by recent IPCC report . This will free the farmer from debt trap , ensures benefit from multiple cropping , no fertilizer subsidy to the government , reduction in the import bill , soil conservation , decline in global warming , environmental protection like so many benefits can be derived from organic farming but its serious enemy is Globalisation . Therefore , it has to be opposed and localisation should be strengthened . Thus , she supports the arguments of economists like Samir Amin . The organic farming is successfully implemented in Cuba which stands as a model for the world . Crisis in Sri Lanka - Neo-Liberal Exploitative Policies
Third world countries are to be articulated as Dependent economies for the continuation of domination of monopoly capital without any hindrances .
The neo-liberal policies have emerged for this purpose . Almost all the third world countries are trapped in this vicious circle of these policies . The Sri Lanka has been implementing this policy strongly since 1970 ’ s . They are the basis for the present economic crisis .
Like all the emerging / backward economies . Sri Lanka also possesses cheap labour , natural resources , valuable minerals especially graphite , offshore oil and gas reserves is another attraction . It has locational advantage as it is at the crossroads of major global shipping lanes . The oil tankers and containers which come from Europe and Middle East to go to East Asia must pass Sri Lanka . Therefore , it is more attractive and strategic for imperialist exploitative forces .
Since 1970 ’ s it is articulated as Open economy like India to take strong measures for privatisation , to make it export - oriented economy to increase Ease of Doing Business , to attract foreign investments by offering various incentives and concessions . It passed new Acts and reformed existing Acts for this purpose . It
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