In an article entitled “Emerging Markets in Trouble After Sri Lanka,” the Financial Times notes that “the debt-laden Sri Lankan crisis of depleted foreign exchange reserves, dwindling fuel supplies and hopelessness suggests emerging markets are in trouble.” countries, and there are few. The leaders of these countries can do something about it.”

The paper looked at the development of Sri Lanka’s financial crisis, beginning with the ex-president’s 2019 cuts in some taxes, leading to a tax revenue shortfall of about 2 percent of gross domestic product, and then the Covid-19 pandemic. it hit the tourism sector, which is an important source of foreign exchange there, due to an attempt to make agriculture dependent on organic fertilizers, which hit food crops and led to an increase in the import bill of rice from foreign exchange reserves, and finally the war Russia with Ukraine, which led to high prices for food and energy, plunged Sri Lanka into a trap of non-payment of debts.

Sri Lanka defaulted two months after the (Russian-Ukrainian war) in May, choosing to spend its remaining foreign exchange reserves on essential goods rather than paying creditors. Before the country officially defaulted, its leadership belatedly asked for help from the IMF. .

The newspaper warned that Sri Lanka “will not be the last country to have to choose between subsidizing needs or paying creditors.”