Experience shows that riots break out in pretty much every country when inflation is high, i.e. when inflation transitions to hyperinflation and the country’s insolvency usually follows. Looting and usually quite violent protests are the immediate consequence. There are enough examples of recent history; Venezuela, Lebanon and currently Sri Lanka. A few days ago, Sri Lanka declared insolvency, i.e. state bankruptcy.
In Sri Lanka, in addition, the country has run out of gasoline. Taxi and TukTuk drivers stand in line for hours. The economy is battered. A video of an angry mob chasing wealthy citizens through the streets is circulating on Twitter:
⭕️ #SriLanka has completely collapsed. Angry crowds now chasing and killing wealthy people as food and energy shortages hit. Over 200 dead so far, police use live rounds. State of anarchy on one side, police state on the other. pic.twitter.com/XAxW6uWXBT
– 21st Century Wire 🇾🇪 (@21stCenturyWire) July 6, 2022
Such terrible pictures are always disturbing, because the rising oil price is also in some European countries such as bsp. Scotland, England, etc. become a big problem. Especially when winter comes. Perhaps a forward-looking policy can now prevent bad things in this country; not an easy task.
Sri Lanka, a country with a population of 22 million, is sinking into poverty and chaos. How tense the situation is was recently demonstrated in Parliament.
“There is still a single gasoline ship anchored in our waters”
said Energy Minister Kanchana Wijesekera. But it is difficult to get to the gasoline, because:
“We have no foreign exchange.»
The Ministry of Finance of the South Asian island state announced on Tuesday that the country could no longer service its foreign debt amounting to a total of 51 billion US dollars. However, a payment in the national currency is possible, the ministry continued to the address of the lenders, including several foreign governments. But alzu’s own currency is not popular. When it comes to energy and the oil crisis, Sri Lanka has asked Russia, among others, for help and the supply of oil.
Had a very productive telecon with the #Russia President, Vladimir Putin. While thanking him for all the support extended by his gvt to overcome the challenges of the past, I requested an offer of credit support to import fuel to #lka in defeating the current econ challenges.
– Gotabaya Rajapaksa (@GotabayaR) July 6, 2022
The Sri Lankan rupee is the current currency in Sri Lanka. A rupee is divided into 100 cents. It is issued by the Central Bank of Sri Lanka.