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Sri Lanka: Why is the country in an economic crisis?

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The switch to organic fertilisers resulted in widespread crop failure, exacerbating foreign currency shortages

(BBC) The International Monetary Fund is lending Sri Lanka $3bn (£2.4bn) to help it deal with its worst economic crisis in its history as an independent nation.Soaring prices, shortages of essential goods and crippling international debts sparked nationwide protests last year which caused the president to flee the country.In early 2022, Sri Lankans started experiencing power cuts and shortages of basics such as fuel. The rate of inflation rose to 50% a year.

As a result, protests broke out in the capital Colombo in April that year and spread across the country.The country ran short of fuel for essential services such as buses, trains and medical vehicles because it did not have enough reserves of foreign currency to import any more.

The fuel shortage caused petrol and diesel prices to rise dramatically.In June last year, the government banned the sale of petrol and diesel for non-essential vehicles for two weeks. Sales of fuel remain severely restricted.Schools had to close, and people were asked to work from home to help conserve supplies.

Sri Lanka has been unable to buy goods it needs from abroad.And in May 2022 it failed to make an interest payment on its foreign debt for the first time in its history.This damaged its reputation with lenders, making it even harder to borrow money on the international markets.

In the face of massive protests, President Gotabaya Rajapaksa resigned in June last year. Prime Minister Ranil Wickremesinghe became acting president and declared a nationwide state of emergency across the country.The mass protests have subsided, but the new president is trying to deal with a huge financial crisis.

Sri Lanka owes about $7bn (£5.7bn) to China and around $1bn to India.Last month, both these countries agreed to restructure their loans, giving Sri Lanka more time to repay them.Thanks to this, the International Monetary Fund (IMF) has agreed to lend Sri Lanka $3bn. That is on top of a $600m loan that the World Bank made last year.

Sri Lanka’s government says it will raise funds to repay its debts by restructuring state-owned enterprises and privatising the national airline.In early 2023 the country introduced income taxes for higher earners, ranging from 12.5% to more than 36%.It also raised other taxes to pay for critical purchases, including fuel and food.

The government blamed the Covid pandemic, which badly affected Sri Lanka’s tourist trade – one of its biggest foreign currency earners.It also said tourists were frightened off by a series of deadly bomb attacks in 2019.However, many experts blame Rajapaksa’s economic policies.

At the end of its civil war in 2009, Sri Lanka chose to focus on providing goods to its domestic market, instead of trying to boost foreign trade.This meant its income from exports to other countries remained low, while the bill for imports kept growing.

Sri Lanka now imports $3bn more than it exports every year, and that is why it ran out of foreign currency.At the end of 2019, Sri Lanka had $7.6bn in foreign currency reserves, which have dropped to around $250m.Rajapaksa also introduced big tax cuts in 2019, which lost the government more than $1.4bn a year in revenues.

When Sri Lanka’s foreign currency shortages became a serious problem in early 2021, its government tried to tackle the issue by banning imports of chemical fertilisers.It told farmers to use locally sourced organic fertilisers, instead.This led to widespread crop failures. Sri Lanka had to supplement its food stocks from abroad, which made its foreign currency shortage even worse.



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The hard challenge of clinching a political settlement in the Middle East

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Bruised hearts: Displaced Palestinian civilians in the Gaza.(Photo by Mustafa Hassona/Anadolu via Getty Images)

Despite some sections of the Trump administration persisting with the view that the possibility could not be entirely ruled out of there being a diplomatic solution to the current US-Iran hostilities in West Asia, the skeptic could not be blamed for thinking otherwise. The intensity, scale and frequency of the tit-for-tat strikes by the antagonists over the past few days against selected military targets and civilian infrastructure in particular in West Asia make the adoption of this stance excusable.

The continuing hostilities render the mentioning of the MOU signed between the warring parties in mid-June a laughable matter. While it could very well be that the foes are wishing privately for a cessation of hostilities before long, what seems to be uppermost on their minds right now is to negotiate with each other from a position of strength. This strategy compels them to incapacitate each other militarily to the extent possible, lest they have to concede too much to each other during negotiations. Hence the stepped-up hostilities.

However, even on the question of there being a negotiated political settlement in the West Asian theatre in the longer term, the skeptic could come to be seen as scoring over the optimist. Developments on the ground account for this.

At the time of writing Israel’s Netanyahu government is going ahead in fairly care-free fashion with the establishment of more Jewish settlements in the Gaza and the West Bank, and it’s all happening under the apparently complacent gaze of the US. In fact, some quarters estimate that Israel is in control of some 65% of the Gaza Strip. Ethnic cleansing, that is, is being drastically stepped-up.

Accordingly, in terms of the power relations of West Asia, the world is almost back to the status quo of the late forties of the last century when the state of Israel was established and the Palestinians were reduced to a microscopic minority in the land they came to inhabit. Therefore, even the impartial observer would be compelled to ask: ‘Will a negotiated peace be ever possible in the Middle East?’

The humanist in the observer would prefer to answer this question in the affirmative and it is indeed the ideal stance to adopt considering the staggering human and material costs of the conflict. But the way ahead to peace could be expected to be highly hazardous and arduous. Among other odds, it would also prove an uphill endeavour to win minds and hearts.

The US’ Trump administration would need to be counted out in this pursuit. This is on account of the fact that it has been far too wayward in its management of West Asian affairs in particular over the past couple of years. Given its unpredictable character it is a matter for conjecture whether it could be counted on to live up to its commitments.

Moreover, Israel could be expected to ‘go it alone’ in the Middle East regardless of whether US help is coming or otherwise. It has indicated as much in recent times and Israel could be doubted on this score only at the doubter’s peril. Because time and again Israel has demonstrated that it could steadfastly defend its interests even single-handedly in the Middle East. History bears this out.

However, a durable alliance with the US would stand Israel in good stead. On the matter of military and intelligence assistance, for example, the US’s help proved invaluable for Israel in the past and going forward this is bound to be so as well. Moreover, it is unlikely that the Trump administration would give up on Israel, considering that a strong Israel is crucial for the furtherance of the US’ strategic and economic interests in West Asia.

But whether the above factors would have a considerable bearing on the question of working out a durable solution to the West Asian tangle is an entirely different matter. Israel, as in the case of the Palestinian enclaves, is acutely security conscious and would need to satisfy itself fully that it could live in a security environment that would guarantee its complete safety, going forward.

The Middle East is badly in need of another peace effort on the lines of the Oslo Accords of the mid-nineties that brought the key actors together and helped hammer out a solution that addressed some of their notable concerns. To be sure, that process did not prove to be the ideal answer to the tangle, but it yielded some respite to the region and drove home that one-time sworn foes could indeed negotiate with a degree of success. The West Bank authority, although falling short of fulfilling some key Palestinian aspirations, is testimony that a degree of success is possible if the intent is right.

Given the current realities of West Asia, peace-making is bound to be an uphill challenge. The violence faced in recent times by the Palestinian community, in particular, has been nothing less than mind-numbing. Merciless has been the violence visited on them by the Israeli side. In such circumstances, durable peace in the region could smack of an idealist’s dream.

Nevertheless, there needs to be urgently, a meeting of minds over the divides. The US would need to be counted out as an honest broker in bringing the sides together but the rest of the West would do well to step up to the challenge.

In this exercise the onus would be on the world’s democracies to take the initiative and doggedly stay the course. An acceptable combination would be the EU and the UN. Given their credentials, the main sides in West Asia ought to find them the least controversial.

Even if the relevant institutional and political arrangements could be shored up to take a reconciliation process forward, winning hearts and minds for the peace drive would prove a grueling challenge. Over the past few years in particular tens of thousands of hearts and minds on both sides of the divide have been bruised badly in the runaway murderous violence that has come to define the Middle East.

These badly scarred personalities would need to experience healing without much delay. It is therefore a multi-faceted challenge that is at hand. Since wide-ranging expertise would be needed in the healing process, people’s participation in peace-making, ranging over the divides, would need to be made a durable reality. It will be a time for enthroning humanity and ensuring the rejection of all forms of violence and coercion.

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Amazing Thailand …right here in Colombo

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For many Sri Lankans, Thailand is the go-to holiday — beaches, temples, food, and that famous warm hospitality.

In fact, I’ve been to Amazing Thailand 24 times myself, and was honoured with the Friends of Thailand International Media Award by the Tourism Authority of Thailand for promoting Thai tourism.

The good news I have for you today is that you don’t even need a passport to get a taste of Amazing Thailand.

The Royal Thai Embassy, in Colombo, is bringing a vibrant slice of Thailand, to the city of Colombo, with Thai Festival 2026 — a cultural experience like never before.

Whether you are an avid enthusiast of Thai culture, a total novice, or simply just interested in exploring foreign cultures, Thai Festival 2026 is going to be the perfect opportunity for you to get more than just a glimpse into one of the most celebrated cultural heritages in South East Asia. And ENTRANCE IS FREE.

The festival will be held on the 1st and 2nd of August, 2026, at Siam Nivasa, 43, C.W.W. Kannangara Mawatha, Colombo 7, and the East Parking Area, of the Colombo Municipal Council, from 11:00am to 5:00pm.

Both days will be full of live entertainment, and dispersed throughout with Thai cultural displays, including exhilarating traditional dance performances and breathtaking Muay Thai demonstrations.

Exploring art and craft specific to Thailand, tasting irresistible authentic Thai cuisine, and playing arcade games, are just a few more fun-filled events available for visitors at the festival premises.

An array of Thai products will also be available for purchase.

While at the festival, you will find Sri Lankan Alumni from Thai universities sharing their experiences with you and willing to answer any questions you might have, related to studying abroad in Thailand.

You can also register for the Muay Thai workshop that will be happening on the 7th and 8th of August, 2026, in Colombo.

Irresistible authentic Thai cuisine

Visitors can also stand a chance to win traditional Thai souvenirs, get exclusive photo opportunities, and, the big one — to enter the raffle draw, at the end of each day, for the grand prize of an all-inclusive round trip to Thailand.

Be sure to avail yourself of this exceptional opportunity and add a cultural spin to your weekend.

To keep up with the latest updates on Thai Festival 2026, head over to the Thai Festival official social media pages.

The Royal Thai Embassy in Colombo official webpage:

https://colombo.thaiembassy.org

Official social media:

Facebook: @RTEColombo

Instagram: @thaiembassysrilanka

Thai Festival official social media:

Facebook: Thai Festival in Colombo

Instagram: @thaifestival_colombo

TikTok: @thaifestival.incolombo

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Thicker, stronger hair …

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Hair fall, in this heat, can be so frustrating, and noticing a thin patch is even more worrying. The good news is … yes, with a little care and kitchen ingredients, you can nourish your scalp and support healthy regrowth.

Try these four easy home remedies … even our grandmothers trusted:

*  Coconut Oil and Curry Leaves Tonic:

Warm 04 tablespoons of coconut oil, with a handful of curry leaves, till the leaves turn black. Cool, strain, and massage into scalp 02-03 times a week. Leave for 01 hour, or overnight.

Why:

Coconut oil deeply nourishes, while curry leaves help strengthen roots and add shine.

Onion Juice for Spot Treatment:

With cotton, dab the juice of 01 small onion, directly on the thin/bald patches. Leave for 20-30 minutes, and then wash with a mild shampoo. Use twice a week.

Why:

Rich in sulfur, onion juice helps boost blood circulation to the scalp.

Aloe Vera and Castor Oil Mask:

Mix 02 tablespoons of fresh aloe vera gel and 01 tablespoon castor oil and apply to the scalp, focusing on thinning areas. Leave for 45 minutes, and then rinse with cool water.

Why:

Aloe vera soothes the scalp, while castor oil coats hair to make it look thicker.

* Fenugreek and Curd Strengthening Pack:

You will need 02 tablespoons fenugreek seeds, soaked overnight, and 02 tablespoons plain curd.

Grind to a paste, apply to scalp for 30 minutes, and then wash.

Why:

Fenugreek strengthens strands and reduces breakage.

Extra Tips for Healthy Hair:

Avoid tight hairstyles that pull on the scalp.

Eat iron and protein rich foods: greens, dhal, eggs, fish.

Use lukewarm water, not hot.

Be gentle when brushing and drying.

Manage stress — it plays a big role in hair fall.

Important: If bald patches are growing, or there is itching/redness, please consult a dermatologist.

Home remedies support hair health, but a doctor can find the exact cause.

Remember, healthy hair starts with a healthy, happy you.

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