According to bloomberg, the economy of Sri Lanka, a small South Asian country, has entered a "virtual collapse" at the end of last month. Its foreign exchange reserves are on the verge of depletion, unable to buy internationally high-priced oil and natural gas, one-third of the country's factories are shut down, unemployment has soared by 40%, and the harsh economic crisis has led to the implementation of a 13-hour power outage system across the country, and all walks of life are close to collapse. Sri Lanka's government has been unable to repay its foreign debt and borrowed money, and the finance minister is about to rush to Washington this month to "survive."
The report also mentioned that Sri Lanka is a country that relies on tourism as a pillar industry, in fact, the economy has recovered with the easing of the epidemic and can see the dawn; but a series of chain reactions after the Russian-Ukrainian conflict have caused international prices to soar, and the country has to allocate a lot of foreign exchange to solve the problem of people's survival, and in the end even the problem of survival cannot be solved. So this was actually the first country to be "crushed" by the international situation, when economists predicted that Sri Lanka would never be the last country to fall if the global economy continued to be turbulent.
Sure enough, less than a week later, on April 4, local time, Lebanese Deputy Prime Minister Saad Shami announced that the Lebanese central bank and government were in a state of bankruptcy, and the central and local governments were currently discussing countermeasures. Lebanon's economic crisis occurred three years ago, also because of the intensification of the epidemic, and the explosion in the capital Beirut exacerbated the domestic situation, which destroyed a large number of grain and oil reserves. Since then, Lebanon's finances have become more and more tense, with a currency depreciation of more than 91%, and there has been a turnaround until the spring of this year; but less than two months later, the Russian-Ukrainian conflict broke out, and the sanctions taken by Europe and the United States directly brought global energy prices and food prices to a "leap period", which is very fatal to small countries facing financial crisis.
According to the analysis, the Lebanese government is a highly import-dependent country, and most of its raw materials and energy are imported from Europe. But now because of sanctions, European countries are unable to protect themselves, let alone guarantee supplies to the small countries on which they depend. Coupled with the fact that Lebanon's past transport lines for the procurement of various types of goods could not continue to pass through the Black Sea (blockaded), the forced detour led to a significant increase in transport costs, and under the combined effect of a series of unfavorable factors, the Government began to control foreign exchange, but it was not very effective. Eventually, Lebanon became the second country to be destroyed after Sri Lanka, and the current government has overdue a lot of debts, and the default has made the future development situation worrying.
It is also worth mentioning that Lebanon and Sri Lanka have a lot in common, and before the arrival of the Russian-Ukrainian conflict, there was an economic crisis due to the epidemic and other reasons, and then the price increase caused by this wave of sanctions became the last straw, making the country face collapse. Some sources remind that Europe is about to launch the fifth round of sanctions against Russia, coal will soon become a hot commodity in the future, and the price will rise greatly; Putin also intends to take "monitoring grain" measures against Europe, which will lead to higher grain, and under the mixing of various situations, the "way to live" for small countries seems to be less and less.