News

Who is pouring oil on the flames in Sri Lanka?

Published

4 years ago

2022/06/16

By Feng Guoquan

Sri Lanka is in a dire situation. Known as the “Pearl of the Indian Ocean,” the country is facing the worst economic crisis since independence in 1948. Western media has taken this opportunity to hype up the so-called Chinese debt trap, alleging that Sri Lanka is on the verge of economic collapse because it was unable to repay its large loans from China. They add that the Belt and Road Initiative (BRI) has brought a heavy burden to the Sri Lankan economy, and constantly pitting the Sri Lankan government and its people against China, while turning a blind eye to those who are really behind all this.

Caught fire by accumulated debt

There are many causes for Sri Lanka’s economic crisis, among which the foreign exchange crisis is the main factor. Since its independence, Sri Lanka has suffered from internal and external troubles. It has been carrying trade deficits and relying on loans for years. Due to the combined impact of a string of terrorist attacks in April 2019, the COVID-19 pandemic and the Russia-Ukraine conflict, the country’s pillar industries including tourism, overseas remittances, tea and garments have been hit hard and it has rapidly drained its reserves.

What’s worse, Sri Lanka introduced a low tax regime in late 2019, which caused the government a loss of more than $1.4 billion in revenue, further limiting its capability to purchase foreign exchange.

While foreign exchange earnings have plummeted, Sri Lanka’s import payments have continuously increased. Sri Lanka’s production materials and daily necessities are highly dependent on imports, and the armed conflict between Russia and Ukraine has triggered a surge in global commodity prices. Taking energy as an example, 60 percent of Sri Lanka’s electricity is generated from coal and oil, both of which need to be imported. The global oil price increased by six-fold from $18 a barrel in April 2020 to above $100 a barrel now.

At the beginning of 2021, the Sri Lankan government banned the import of chemical to prevent the outflow of foreign exchange, resulting in large-scale crop failures, and the government had to replenish food reserves from abroad, further exacerbating the shortage of foreign exchange.

Sri Lanka’s foreign exchange reserves have plummeted by about 70 percent in the past two years. Its reserves stand at around $1.9 billion at the end of March, while its foreign debt obligations for this year exceed $7 billion. On April 12, the Sri Lankan government officially announced the temporary suspension of foreign debt payments, defaulting on its $50.7 billion foreign debt. On May 19, the government announced that it had failed to repay a total of $78 million in debt, which marked the nation’s first sovereign debt default since it gained independence.

The U.S.-led West have been pouring oil on the flames after setting fire

Although Sri Lanka has been in debt for many years, it has previously maintained a good record of foreign debt repayment. The Russia-Ukraine conflict, which was caused by the U.S.-led Western intervention, had a very serious impact on Sri Lanka’s economy, which was already in bad shape, and leading to its default. It is the hegemony and the greed of capital of the U.S.-led West that are the root causes of the economic crisis faced by Sri Lanka and other developing countries.

The mounting sanctions imposed on Russia by the U.S.-led West have been pushing global food and energy prices to new heights, and there are also restrictions on Russian financial and aviation sectors. The food prices surged in Sri Lanka due to soaring prices of wheat and corn triggered by the Russia-Ukraine conflict.

Sri Lanka exports about $150 million of tea and other commodities to Russia annually. However, as more and more Russian banks are banned from the SWIFT network, Sri Lanka was unable to obtain foreign exchange by exporting to Russia. In January this year, Russia was Sri Lanka’s largest source of tourists, but in March, the state-run national carrier of Sri Lanka suspended its flights to Russia due to the Western sanctions.

In terms of debt structure, most of Sri Lanka’s debts are in the form of international sovereign bonds, and the Asian Development Bank and Japan are its main lenders. According to the Central Bank of Sri Lanka data, as of October 2021, Sri Lanka’s international sovereign bonds reached $11.82 billion, accounting for 34.1 percent of total external debt. In terms of bilateral loans, Japan and India ranked first and second, with $3.54 billion (10.2 percent) and $790 million (2.3 percent) respectively, higher than China.

China’s bilateral loans to Sri Lanka are not the largest. Even with financial market loans (Exim Bank of China) included, it only accounts for 10 percent, and most of the loan interest rates are much lower than the capital markets, among which over 60 percent are concessional loans, and the remaining 40 percent are interest-free loans. So Sri Lanka’s debt repayment problems have very little to do with Chinese loans.

In fact, Sri Lanka is not the only country that suffers from the economic crisis. The Federal Reserve and other major central banks have raised interest rates to quell inflation, which drives up borrowing costs and may bring debt crisis to many developing countries. Turmoil triggered by rising food and energy prices is already gripping countries like Egypt, Tunisia and Peru. Scarcities of food, energy and finance put more than 70 countries at risk of following Sri Lanka into default, says United Nations, according to a recent report by the Wall Street Journal.

The trap of so-called Chinese debt trap

In recent years, governments and media of the U.S.-led West have tied the concept of the “debt trap” to China as a weapon to tarnish China’s reputation and the Belt and Road Initiative in order to counter China’s promotion of BRI, maintain their political and economic hegemony, and prevent the developing countries from participating in the BRI.

The Hambantota Port is a most cited case by the U.S.-led West in hyping up the “Chinese debt trap.” It is falsely claimed that China used the port to drag Sri Lanka deep in debt and would transform it into a military base in the future. But the fact is that the Hambantota Port added $1.12 billion of foreign exchange reserves for Sri Lanka to repay some short-term foreign debts. What’s more, the Hambantota Port is difficult to use as a military base due to water depth limitations, and the Sri Lankan government has explicitly prohibited the use of the Hambantota Port as a foreign military base.

On the contrary, India has recently partially acquired the Trincomalee Port situated on the eastern coast of Sri Lanka, which is a large natural port from a military point of view and used to be a strategic oil terminal for the British army during World War II. Because the United States intended to build an “economic corridor” and highway from Trincomalee to Colombo through the Millennium Challenge Corporation (MCC), which is obviously for military purposes, the United States, India and other countries have played deaf and dumb.

As a close neighbor of Sri Lanka, China has been sincerely helping Sri Lanka develop its economy. Instead of causing any crisis, China has over the years provided selfless help and firm support to Sri Lanka in socio-economic development. Especially since the onset of the COVID-19 pandemic, China and Sri Lanka have supported each other and pulled through together, writing a new chapter of China-Sri Lanka friendship. Chinese Premier Li Keqiang noted that China empathizes with Sri Lanka for its difficulties and challenges, and China is ready to provide much-needed livelihood assistance for Sri Lanka within its capacity.

The Sri Lankan government has explicitly refuted the myth of “Chinese debt trap” time and time again. Recently, Ranil Wickremesinghe, Sri Lanka prime minister and leader of the United National Party, expressed his gratitude to China for assisting Sri Lanka in overcoming difficulties in all aspects and stressed that the government will continue to attach great importance to developing ties with China and push forward BRI projects in the country, accelerate the development of the Colombo Port City, Hambantota Port and other major cooperation projects, make every effort to protect the safety of Chinese institutions and personnel in Sri Lanka.

The international community, especially the developing countries, need to be wary of the trap of “Chinese debt trap” set by the U.S.-led West

，which is a systematic move orchestrated by the U.S. to obstruct the BRI. Countries should endeavor to safeguard their national security and development interests, strengthen international cooperation, including those under the BRI, increase their representation and voice in global economic governance, and promote the establishment of a more just and reasonable international economic order. For developing countries including China, underdevelopment is the biggest trap, and the political, economic, military, and cultural hegemony of the U.S.-led West is the real trap.

(Writer Feng Guoquan is a commentator on international affairs. The article was first published by The People’s Daily, in Chinese, on June 11, 2022. The article reflects the author’s views, and not necessarily those of CGTN (China Global Television Network.)

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News

Be mindful of the accuracy of information before sharing it on social media – PM

Published

43 mins ago

2026/03/16

Priyan

Prime Minister Dr. Harini Amarasuriya stated that the weakening of public trust in information disseminated through the media is extremely dangerous for a society, and emphasized that people must be mindful of the truthfulness of information before sharing it on social media.

The Prime Minister made these remarks while addressing the “Sandeshaya” Media Awards Ceremony held on 14 March at the Kularathne Hall of Ananda College, Colombo. The event was organized with the aim of providing Sri Lankan school students with an opportunity to actively contribute to the national media discourse while promoting ethics, responsibility, and critical thinking.

During the “Sandeshaya” Awards Ceremony , lifetime awards granted only once in a lifetime were presented to distinguished veterans in the media field, while media awards were also presented to talented students in the school category. The ceremony was held under the patronage of the Prime Minister.

Expressing her views further, the Prime Minister stated:

“We live in an era where information technology and the media are changing rapidly. Along with these changes, many opportunities have emerged, but we are also confronted with numerous challenges.

We must prepare our younger generation to live in a society and a world transformed by information technology and the media.

When we observe the changes taking place in the media today, we can say that the media and information have become democratized. In the past, access to knowledge and information was largely limited to privileged or powerful groups. The authority to communicate information and decide what should be disseminated was held by a small group. However, with the advancement of technology, this has changed dramatically. As a result of this revolutionary transformation, information, data, and knowledge have now become accessible to everyone. In that sense, it is a positive development.

At the same time, we are no longer merely media viewers or consumers. As citizens, we can also become media creators. Citizens now have significant space to engage with the media and share information. While this is positive in one sense, it also carries certain dangers. There are serious questions, issues, and challenges regarding responsibility and credibility in the dissemination of information. Today, information flows so rapidly that it is sometimes difficult to determine what is true. Making decisions has become increasingly challenging. Not only in our country but globally, there have been many instances where societies have been set ablaze due to misinformation or deliberately distorted information. We have witnessed numerous occasions where people’s lives have been destroyed as a result.

Sometimes, without even realizing it, we get trapped on the internet. We share various things through our social media platforms, both necessary and unnecessary. However, what we often forget is that a large amount of personal information accumulates on the internet through these actions. Once incorrect information becomes widespread in this way, it becomes extremely difficult to erase.

The spread of false information weakens public trust in the information provided by the media, and this is extremely dangerous for a society. For the sustainability of a society, it is essential to maintain trust among citizens and trust in the institutions that influence people’s lives. Only through the trust we can safeguard the sustainability, continuity, and security of a society.

However, what has happened today due to the spread of misinformation? We no longer have confidence in our leaders. We do not even trust elders. There is doubt about whether the news we receive can be trusted. When credibility weakens within a society, it can push that society into crisis.

Therefore, it is extremely important to cultivate a culture that strengthens trust in leadership, promotes confidence in elders, and enhances awareness about reliable sources of information. In this context, those entering the field of media carry a significant responsibility.

Just like the senior professionals we honored today, you too may one day enter this field. However, there is a vast difference between the era in which they entered the profession and the era you will enter. You will carry a unique responsibility to strengthen the credibility of the media and to stand firmly behind the information you present.

You must be able to stand by the information you provide. You must reflect on whether the information you share is true and who might be affected by it. Ensuring the credibility of the information you disseminate is also your responsibility.

Similarly, as users of any form of media, we all bear a responsibility to verify the reliability of the information we receive and to be aware of how to distinguish between truth and falsehood. That is why digital literacy and media literacy are essential. It is also for this reason that we believe such subjects and concepts must be incorporated into education reforms so that our student generation can learn them.’

The Prime Minister further stated that citizens have a responsibility to be mindful of the truthfulness of information before sharing content found on the internet and social media with others.

The event was attended by the Secretary to the Ministry of Health and Mass Media Anil Jasinghe, Principal of Ananda College D.M.L.P. Dissanayake, journalists, principals, teachers, and students.

(Prime Minister’s Media Division)

Latest News

Heat Index at ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern and North-western provinces and in Monaragala, Mannar, Anuradhapura and Vavuniya districts

Published

55 mins ago

2026/03/16

Priyan

Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. on 15 March 2026, valid for 16 March 2026.

The public is warned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at
some places in the Western, Sabaragamuwa, Southern and North-western provinces and in Monaragala, Mannar, Anuradhapura and Vavuniya districts.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491

News

Fuel rationing begins: Police deployed as queues return

Published

2 hours ago

2026/03/16

Thilina Walpola

Long queues of vehicles once again lined roads near filling stations across the country yesterday as authorities reintroduced the QR-based fuel quota system, prompting the deployment of police officers to manage traffic and maintain order.

The measure comes against the backdrop of escalating tensions in the Middle East and global oil supply disruptions which officials say have triggered panic buying and fuel hoarding despite assurances that the country is not facing an immediate shortage of fuel.

DIG in charge of Traffic and Road Safety Range DPGJ Senadeera said police officers had been deployed to major filling stations to regulate traffic and prevent congestion caused by large crowds gathering to obtain fuel.

Speaking to the media, Senadeera said the queues were largely the result of panic.

“The public need not panic. Once the QR code system is in place, each category of vehicle will receive the required amount of fuel,” he said.

According to the DIG, traffic congestion near fuel stations was mainly caused by motorists attempting to stockpile fuel.

“Many people who require only a small quantity of fuel are attempting to obtain larger amounts due to fear and uncertainty. This behaviour has created long queues and congestion,” he said.

“If people remain calm and obtain only the amount of fuel they require, these problems will not arise. The system has been introduced precisely to prevent long queues and ensure efficient distribution,” Senadeera added.

Meanwhile, the Ministry of Energy announced that the QR code system for fuel sales came into effect at 6 am yesterday (15), making it mandatory for motorists to present a valid QR code to obtain fuel.

Authorities said the measure had been introduced in response to abnormal increases in demand for fuel and concerns over disruptions to global supply chains caused by the ongoing military situation in the Middle East.

A public notice issued by the ministry stated that the petroleum supply chain had been adversely affected by the Middle East conflict, while local demand had risen sharply in recent days, placing pressure on the country’s fuel reserves.

Officials also noted that certain groups had been purchasing excessive quantities of fuel illegally, prompting the government to introduce the QR code mechanism to curb hoarding and ensure fair distribution.

Under the system, each vehicle category will be entitled to a fixed weekly fuel quota.

According to the Ministry of Energy, the allocations are as follows: Buses – 60 litres, Motor lorries – 200 litres, Vans – 40 litres, Three-wheelers – 15 litres, Motor cars – 15 litres, Motorcycles – 5 litres, Land vehicles – 25 litres, Special purpose vehicles – 40 litres and Quadricycles – 5 litres.

Managing Director of the Ceylon Petroleum Corporation (CPC), Mayura Neththikumarage, insisted that the introduction of the QR code system did not indicate a fuel shortage.

“There is no issue with fuel availability. The system was introduced after we observed people collecting fuel in large quantities and queues forming over the past three to four days,” he said.

Neththikumarage said the primary objective of the QR code system was to ensure that the public could obtain fuel without having to wait in long queues.

Fuel distribution under the new system commenced at 6.00 a.m. yesterday, with priority initially given to motorists who had previously registered and obtained QR codes.

Those who had earlier registered for the system can continue to use their existing QR codes, provided the vehicle ownership and registered mobile number remain unchanged.

Motorists who have not yet registered can obtain a QR code through the official website fuelpass.gov.lk, while those whose vehicle ownership or mobile numbers have changed are required to re-register their details.

Meanwhile, the Ministry of Energy said a separate fuel distribution mechanism would be implemented for vehicles engaged in essential services and production activities.

Private passenger transport buses will receive fuel through depots operated by the Sri Lanka Transport Board, the ministry added.

Amid the situation, Minister Dr. Nalinda Jayatissa appealed to the public to use fuel responsibly and avoid unnecessary travel.

“As a government, we request the public to think not only about their own families but also about the country. Manage fuel consumption carefully and avoid unnecessary travel during this period,” the minister said at an event held in Moratuwa.

He stressed that rationed fuel consumption was essential to ensure that available stocks could be sustained while global uncertainties continue.

Authorities reiterated that the QR code system had been introduced as a precautionary measure to manage fuel distribution effectively and prevent panic-driven shortages.

Police meanwhile urged motorists to cooperate with traffic officers stationed near filling stations and refrain from forming unnecessary queues, warning that panic buying would only worsen congestion and inconvenience the public.

by Norman Palihawadane