The crisis in Sri Lanka is deepening day by day. President Gotabaya Rajapaksa, who fled the country, has resigned. The people of this country, burdened with foreign debt of 51 billion dollars, have come out on the streets. At the same time, after Sri Lanka, now Pakistan is also on the verge of bankruptcy. The debt burden on Pakistan has increased a lot and the foreign exchange reserves have depleted a lot, after which rating agencies have expressed apprehension.
Sri Lanka, Lebanon, Russia, Suriname and Zambia are already defaulting and there are at least a dozen countries that are suspected of defaulting. This includes Pakistan, Tunisia, Ukraine, Ghana, Ethiopia, Ecuador, Argentina, Belarus, Egypt, Kenya, El Salvador, Nigeria. However, the reason for Russia’s default is not lack of money. In fact, after Russia’s military action on Ukraine, the US and Europe have imposed a number of sanctions, including a ban on money transactions. Because of this Russia is facing difficulties.
At the same time, talking about Pakistan, the economic condition of the country is very bad. Pakistan’s foreign exchange reserves have fallen to $ 9.8 billion, due to which there may be problems for import of essential items. The Pakistani rupee has weakened to a record low. A new government has come in the country but it is facing many challenges on the economic front. Meanwhile, Pakistan has got approval for an employee-level agreement with the IMF. It has reached an agreement on a loan tranche of $1.17 billion.
While sanctions defaulted to Russia last month, Belarus is facing similar sanctions, which sided with Russia in the war with Ukraine. The Latin American country of Ecuador defaulted two years ago, but violent protests and attempts to oust President Guillermo Lasso have thrown it into crisis.