Sri Lanka’s Prime Minister Claims National Economy Has ‘Collapsed.’

Sri Lanka’s prime minister has told that nation’s parliament that the national economy has, for all intent and purposes, collapsed. Ranil Wickremesinghe informed lawmakers that Sri Lanka is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.” Wickremesinghe’s remarks did not bring any new developments to light. In fact, the rather new prime minister’s words seem intended to remind lawmakers and his critics that the task of rebuilding Sri Lanka’s economic foundation will take time and much effort. After being in power for roughly one month, opposition party politicians are attempting to lay blame for the economic collapse upon Wickremesinghe’s shoulders. As the nation slides deeper into economic malaise, the politicians are attempting to cover their own backsides and assess blame upon others.

The collapse of the national economy came about at least partly due to a perfect storm of circumstances. Heavy debt, loss of tourism revenue, a foreign currency crisis and other pandemic-related impacts, as well as the soaring costs of commodities are the main ingredients of Sri Lanka’s economic nightmare. The nation is no longer able to buy imported fuel, even for cash, due to the heavy debt owed by Ceylon Petroleum Corporation. There are no nation-states or supranational bodies willing to provide fuel, creating significant fuel shortages.

The Sri Lankan government plans to call India, China and Japan to a donor conference in early August in an attempt to increase foreign financial assistance. An interim budget will be presented around the same time. This is hoped to help Sri Lanka’s position in negotiations with the IMF. August will be when geopolitics takes on a broader and more significant position in Sri Lanka’s economic crisis. India and Japan will seek to raise their influence with Colombo while simultaneously reducing China’s influence. India and Japan, as Quad members, have political and military incentive to work together and push back China’s inroads in Sri Lanka. Beijing is attempting to move deeper into the Indian Ocean and establish basing rights for Chinese warships in an area historically regarded as the Indian sphere of influence.

Protests Break Out In Cuba

Protest rallies broke out in Cuba today as citizens took to the streets and voiced their discontent with the current government, as well as shortages of food and medicine that have grown significantly worse since the start of the COVID-19 pandemic. In a nation where dissent is often dealt with swiftly and brutally, the protests appear to have taken the government by surprise. The protest rallies took place in cities and towns around the country. Santiago, Santa Clara, Matanzas, Cienfuegos and Holguín all saw protests, as did a number of smaller towns. Eventually, they came to Havana where a strong police presence was waiting. Thousands of people took part nationwide, making today’s protests the largest in Cuba since the Balsero crisis in 1994.

A shortage in COVID-19 vaccines seems to have been a contributing factor for today’s events too. Cuba has been setting record highs in the number of COVID cases of late. Efforts to control transmission of the virus have not kept up with the rise in cases. Cuba’s economy is also in the midst of a contraction. Economic sanctions and multiple layers of bureaucracy have combined to bring production in agricultural and essential food sectors to a near standstill. Of course, these problems are all symptoms of the main ailment facing Cubans: the authoritarian government in Havana.

It did not take very long for the Cuban government to lay blame for the protests at the feet of the United States. The next step in the government’s response will be watched closely by the US and other nations in the region. This is the first major test for Cuba’s leader Miguel Díaz-Canel since he assumed power in April of this year.

For the US, the Cuba demonstrations could serve to bring about another test for the Biden administration which is now contending with Haiti and the aftermath of its president’s assassination last week.