2022 Year in Review

Sri Lanka isn’t the only country with a failing economy and growing foreign debt.
Developing countries in Asia such as Pakistan, Laos, Maldives, and Bangladesh are
following similar trajectories. According to Laos officials, China undertook 813
projects worth more than $16 billion in 2021. Laos is facing a shortage of food and
fuel supplies, which is concerning given one-third of the population lives in poverty.
Laos’ public debt amounted to 88 per cent of its gross domestic product (GDP), owing
almost half of it to China, according to reports from the World Bank. In July 2022,
Pakistan’s inflation surged to 25 per cent and it too is struggling to meet fuel and
food demands for its population. Pakistan’s current government is increasingly
seeking negotiations with the International Monetary Fund (IMF) for economic
bailouts to decrease its foreign debts.
The COVID-19 pandemic and the Ukraine-Russia
war are increasing inflation, causing shortages
in global supply and creating a further divide
between low-and-middle-income countries.
Such external factors increase the foreign debt
of developing countries, hindering their ability
to meet the basic human rights of their
population. Any investment either from Chinese
institutions or western institutions is going to
increase their foreign debt and domestic
political and economic policies offer limited
scope and resolution. These foreign creditors
are essential for developing countries including
Sri Lanka to maintain their economy and flow of
resources, however, ineffective economic and
domestic policies are bound to collapse. With
Sri Lanka’s new President Ranil Wickremesinghe
trying to restore ‘law and order’ by arresting the
protest movement’s leaders, there is no
indication of an effective and progressive
economic recovery for a country where the
population is losing hope and seeking
desperate measures to survive.
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