Sri Lanka President points geopolitical rivalry for looming global economic crisis

- economynext.com

  • Wickremesinghe highlights the impacts of US-China rivalry, Ukraine war
  • Call to end geopolitical rivalry to address major global threats
  • Sri Lanka is undertaking an unprecedented fiscal effort – Wickremesimghe

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe, speaking at the Asian Development Bank (ADB) governor’s session on Thursday, blamed growing geopolitical rivalry for the global leadership for the looming global economic crisis 

“Asia has still to overcome the present global economic crisis. Unlike the financial crisis of 2008, in this instance, the economic levers alone are insufficient to stimulate global economic recovery,” Wickremesinghe told the ADB annual forum in Manila.

He said the factors underlining the main crisis is not only of economic origin but are also the consequences of evolving geopolitics. The result being the absence of cooperation amongst the G20 unlike the earlier crisis.

“The Ukraine war on one side and the US-China rivalry, spurred on by military, trade and political differences, on the other side, are key contributors to this breakdown in cooperation,” he said.

“Added to this geopolitical rivalry are the droughts, floods and pandemic which are still present in Asia. All these challenges are compounded by the absence of global leadership – a time when the global economy is stuttering.”

“As this global rivalry intensifies into a new cold war, which will determine a new global power balance by 2050, the inability of the major countries to give leadership to the mitigation of the global climate change crisis is becoming more apparent.”

Sri Lanka caught between India & China

Wickremesinghe’s speech also highlighted the action by his own country Sri Lanka which is undergoing through an unprecedented economic crisis after years of geopolitical rivalry between China and India.

“Countries with pre-existing economic vulnerabilities, including Sri Lanka, are the most affected. Therefore, creditors and debtor nations must work collectively in an equitable manner to ensure economic and financial stability across the region and indeed the world,” he said.

“The developments on the global stage have further aggravated the self-inflected economic crisis in Sri Lanka resulting in a political outburst that led to a change in Government. Today, we have stabilized the economy and many countries and stakeholders are keenly monitoring how we resolve this crisis.”

“We are well aware that the evolution of Sri Lanka’s economic crisis includes both domestic policy elements as well as external shocks. It follows that the resolution of the crisis also requires both domestic efforts and the support of external partners.”

He said Sri Lanka has already undertaken major macroeconomic policy reform measures amidst major economic stress.

“Sri Lanka is undertaking an unprecedented fiscal effort as part of our commitment to restoring the country’s debt sustainability,” he said.

“It is our hope and expectation that Sri Lanka’s creditors, and all stakeholders, will support us in these efforts to restore our debt sustainability and help put the country back on the path of inclusive and sustainable economic growth.”

“….we must overcome the geopolitical rivalries to address the major threats to our existence, otherwise we will all fail leading to instability in our region reminiscent of Europe after World War I.” (Colombo/Sept29/2022)

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