CFR Daily News Brief June 30, 2022

Top of the Agenda

China’s Xi Visits Hong Kong, Praises Its ‘Rise From Ashes’Chinese President Xi Jinping is in Hong Kong for ceremonies marking the twenty-fifth anniversary of the city’s handover from British rule. He said Hong Kong has “risen from the ashes” (SCMP) since his last visit in 2017. Since then, Beijing has cracked down on dissent and independent media in the city. While Xi’s 2017 visit was followed by a pro-democracy march (Bloomberg), Hong Kong’s streets have been empty of demonstrations this week because of the sweeping national security law Beijing imposed on the city in 2020 and warnings from police. It is Xi’s first trip outside mainland China since the start of the COVID-19 pandemic. The anniversary also marks the halfway point of a promise Beijing made to maintain liberal institutions in Hong Kong for fifty years. The United States and United Kingdom have accused Beijing of breaking the promise.
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How the Sri Lankan economy run out of money to pay for food and fuel

Posted Fri 24 Jun 2022 at 9:06amFriday 24 Jun 2022 at 9:06am

A woman cooks using a firewood hearth outside her house to the right of a small alleyway of houses.
Sri Lankan residents are using firewood to cook as fuel supplies become scarce during an economic crisis.(AP: Eranga Jayawardena)

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Sri Lanka’s Prime Minister says the island nation’s debt-laden economy has “collapsed” as it runs out of money to pay for food and fuel.

Short of cash to pay for imports of such necessities and already defaulting on its debt, the country is seeking help from neighbouring India and China and from the International Monetary Fund (IMF).

Prime Minister Ranil Wickremesinghe, who took office in May, has emphasised the monumental task he faces in turning around an economy he said was headed for “rock bottom”. 

Sri Lankans are skipping meals as they endure shortages and lining up for hours to try to buy scarce fuel.

It’s a harsh reality for a country whose economy had been growing quickly, with a growing and comfortable middle class, until the latest crisis deepened.

How serious is this crisis? 

Sri Lankan auto rickshaw drivers queue up to buy petrol near a fuel station in Colombo, Sri Lanka
Sri Lankan auto rickshaw drivers queue up to buy petrol in Colombo. (AP: Eranga Jayawardena)

The government owes $US51 billion ($73.9 billion) and is unable to make interest payments on its loans, let alone put a dent in the amount borrowed.

Tourism, an important part of economic growth, has sputtered because of the pandemic and concerns about safety after terror attacks in 2019.

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