Coronavirus Backlash: Sri Lanka Defaults on Debt to the IMF

Andrew Anglin April 12, 2022

The IMF/World Bank system was paying the governments of the world billions of dollars to collapse their own economies by implementing “Covid-19” virus measures.

Of course, the measures included shutting down the economies of these countries. The collapse didn’t happen immediately. But now it is happening for many countries.

The Western sanctions on Russia and their attempt to turn the Ukrainian border skirmish into a war with Russia has expedited the process of collapse.

Sri Lanka is the first to default on its debt to the IMF.

RT:

Crisis-hit Sri Lanka has announced that it will halt payments on its foreign debt as its dwindling reserves of dollars are needed to purchase food and fuel.

“We have come to a situation where the ability to service our debt is very low. That’s why we decided to go for a preemptive default,” the newly appointed central bank governor, Nandalal Weerasinghe, announced during a briefing on Tuesday.

The payments on the South Asian country’s foreign debt would be suspended “on a temporary basis,” pending a bailout from the International Monetary Fund (IMF), he added.

Sri Lanka had to make some $4 billion in foreign debt payments this year, including $1 billion in July, but its foreign reserves stood at only around $1.93 billion by March.

“We need to focus on essential imports and not have to worry about servicing external debt,” Weerasinghe said, explaining what the country intended to do with its remaining dollars.

The Finance Ministry said in a statement that Sri Lanka has found itself in such a dire situation due to the “effects of the Covid-19 pandemic and the fallout from the hostilities in Ukraine.”

The island nation’s creditors, including foreign governments, were free to capitalize any interest payments due to them or opt for payback in Sri Lankan rupees, according to the ministry.

Sri Lanka has seen a wave of violent protests since mid-March as thousands took to the streets to express anger about shortages of food and fuel amid a record inflation.

The hilarious part is that Sri Lanka is the country that the US points to when complaining about China’s lending practices. What China actually does is build infrastructure in countries, and then if the country can’t pay for the infrastructure, they allow them to trade the China-built infrastructure to pay off the debt.

It’s just a roundabout way of China building infrastructure in these countries which China owns but the locals are allowed to use. The country doesn’t lose anything, because it didn’t have the infrastructure in the first place.

In Sri Lanka, China built a massive port – on reclaimed land! It was land that didn’t exist before China built the land! Then they had to “give it back” to China, but it is still good for their economy, creating jobs and so on. They lost literally nothing.

This is very much different than the IMF debt trap system.

The IMF is an organ of the US empire. If all these third world countries begin defaulting on this debt, it’s not really going to be good for the value of the dollar, and it is going to open these countries to becoming fully dependent on China for food and fuel.

This was all just very poorly planned.

This is now going to unfold as power struggles between China and the West for economic control over all of these third world countries that were driven to the brink by the virus hoax and then this Russia hoax.

China is presumably going to win most or all of these, simply because they have a better methodology for promoting actual development in the third world.

Anytime you hear a political Chinese person speak, they will start talking about how the West thinks in terms of the next year, while China thinks in terms of the next 100 years. This is what they are all taught in school. This is another reason why China didn’t come out and argue about the coronavirus hoax.

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