Jakarta, CNBC Indonesia – A research organization concerned with global poverty alleviation efforts estimates that nearly 30 countries have the potential to default on debt, one of which is Sri Lanka.
The impact of the Russo-Ukrainian war on global markets and the ongoing pandemic are the triggers. Whatever events occur in other countries or parts of the world, it is not impossible that one day it will happen in Indonesia, if there are no anticipatory steps.
The Special Staff of the Indonesian Vice President for Economic Affairs, Wijayanto Samirin, said that the experiences of other nations should be a common concern for the country of Indonesia, which is very dynamic in its development.
“Sri Lanka’s economic structure and economic conditions are somewhat similar to Indonesia’s, so dissecting Sri Lanka is very important for Indonesia as a lesson,” said Wijayanto in his official broadcast, Sunday (24/4/2022).
Image Sri Lanka, which is chaotic and chaotic, said Wijayanto, could not help but exacerbate the situation. “Tourism, investment, bonds will also be affected by the decline. Sri Lanka’s recovery will be hampered,” he said again.
Sri Lanka’s economic crisis is the worst economic crisis since the country’s independence in 1948. The blame has fallen on the throne of President Gotabaya Rajapaksa.
Rajapaksa was elected in 2019 amid nationalistic fervor and a surge of support from the country’s Sinhalese Buddhist majority.
However, over the past three years, under his leadership, there has been what many call ‘financial mismanagement’ and the economy of the world’s second-largest tea-exporting nation has plunged into free fall.
Protests are now widespread asking Rajapaksa to resign, but he is adamant that he will not resign. The International Monetary Fund (IMF) is now being asked to immediately disburse a bailout fund to help the crisis in the country.
“It can be concluded that what is happening in Sri Lanka is democracy being degraded. There are so many anti-democratic activities carried out by Sri Lankan politicians,” explained Wijayanto.
As a result of a degraded democracy, negligent and corrupt politicians and governments emerge. As a result, bad policies often appear. Not for the interest of the people, but for the interests of groups, investors, politics, and ethnicity.
“Sri Lanka’s condition is like that, it is a warning for Indonesia to simply remind if there are similar things happening in Indonesia,” said Wijayanto again.
Due to bad policies, the result is fiscal bankruptcy and the people of Sri Lanka are miserable. Mainly because he no longer has enough foreign currency to pay off foreign debts that were previously paid for by foreign exchange remittances for migrant workers, investment, and tourism. Next came a vicious cycle in Sri Lanka.
For information, ONE, an organization concerned with efforts to reduce global poverty, estimates that the 23 poorest countries on the African continent have the potential to be dragged into debt default following Russia and Sri Lanka.
Currently, 59% of African countries are rated bankrupt or at high risk of having difficulty repaying debt.
ONE said if the prediction is correct, about 20 million people are at risk of falling into the category of extreme poverty if 16 of Africa’s most risky countries fall into debt default. The debt of a number of countries in Africa that will mature in 2022 is US$ 64 million.
(vap/vap)
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