Comment by rabeener | Hacker News Reader

Comment by rabeener | Hacker News Reader

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Your statement is not accurate and also misleading. There’s a number of factors that landed Sri Lanka where it is today for example over investing in domestic production for internal consumption vs. investing in a healthy export economy, deep tax cuts beginning in 2019 to gain support for the ruling party, and taking on massive amounts of debt to China to fund infrastructure projects. The country is 13 years removed from a civil war (which is not a long time) and has been mostly led by a dynastic family that implemented damaging policies to maintain popular support. All of this was exacerbated by the pandemic, accelerating the downfall of the country’s economy because of these disastrous policies.

And to address your “go green” comment directly, Sri Lanka banned the import of foreign fertilizers not because they were committed to being organic but because they had dire foreign exchange shortages beginning last year. This has commonly been misconstrued as the country trying to be organic because that’s how it was sold to the people of the country by that dynastic leadership to hide the failure of leadership’s economic policies.

I’m disappointed that you posted this comment to HN. We are a community that’s better than this historically but I see the same uniformed voices popping up here now that ruined Reddit years ago. Sri Lanka is a country of 22 million people who are currently in a crisis and actually starving. They deserved better than what you wrote.

> massive amounts of debt to China

China holds ~10% of Sri Lanka's external debt. Like the organic farming debacle, blaming China is a simplistic and misleading narrative

10% of expensive debt built over a short period of time is pretty massive.

It’s, however, not the sole, or even one of the larger causes of Sri Lanka’s current issues.

That being said, if the same money was raised from the IMF, the IMF would work with Sri Lanka to help resolve their issues much better than what China does. And it would probably have prevented the govt from taking some Of the worst actions they took that did contribute to the problems Sri Lanka is facing by threatening to withold money during future funding rounds.

The reason a lot of authoritarian and corrupt governments have been opting for Chinese debt is because it comes with no strings attached. It’s expensive, and China is happy as long as they are paid (plus their companies and workers get work), and if they’re not paid they’re happy taking over whatever property the loan was secured with.

The IMF, OTOH, works with countries to instill better discipline, and while there are justifiable criticisms about it, it’s way overblown, because this is usually the alternative.

  > The IMF, OTOH, works with countries to instill better discipline

which countries that had to be "disciplined" by the IMF did really well?

India

"Sri Lanka banned the import of foreign fertilizers not because they were committed to being organic but because they had dire foreign exchange shortages"

In a free-market economy, the government is not in charge of importing things. It should make no difference whether the government has any foreign currency. Private actors can import things if they have the foreign currency to pay for them. Which they can get by exporting stuff.

I don't know what sort of deviations from a free-market economy are going on in Sri Lanka that led to this problem. But something is very wrong. Destroying your agricultural sector so the government can get more foreign currency is just obviously stupid. Unless, of course, you're benefiting from some corrupt scheme involving government control of foreign exchange...

Last paragraph unneeded.

I would disagree.

On the contrary, very much needed.

If that would have been the only sentence or the first sentence, I would agree with you, and it would be against HN rules. But the commenter gave more context to what's happening in Sri Lanka than all of us provided together, so I respect his/her opinion. I still think just creating a new top comment would have been more productive though (and would be on the top of the page)

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