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Explained: Why is Sri Lanka on the Verge of Bankruptcy?

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Sri Lankan fishermen working on the river bank.

Spending hours waiting in ques have become a norm across Sri Lanka, starting with rice, milk, and sugar powder, now cooking gas, and petrol and diesel are falling short in supply. The shortage is the result of the government’s inability to pay for the imports in dollars.

Ever since the pandemic, Sri Lanka’s economy has been in a steep downfall. Many residents have suffered due to pandemic-related lockdowns and closed borders. In addition, restrictions on exports and the lack of tourists have slowed down the country’s economic growth.

Also Read: Sri Lanka: What Led the Island Nation to Bankruptcy?

Now Sri Lanka has canceled school exams for millions of students, but the reason this time is not COVID19, but the nation has run out of printing papers to conduct the examinations.

“School principals cannot hold tests as printers are unable to secure foreign exchange to import necessary paper and ink”

Depratment of Education, Sri Lanka

The country is facing its worst economic crisis since independence.

So, which sector has been hit the hardest? What is behind the worsening financial condition? And can the island nation recover from the losses?

Hiking Inflation and Food Prices

For several months food prices in Sri Lanka have surged, and inflation has skyrocketed, hitting a record high at 20%. It is primarily due to depleted foreign funds and poor harvest.

With the aim to make Sri Lanka the first 100% organic food country, the government banned the import of chemical fertilizers and pesticides without any notice.

Though it was revoked later, the ban had a devastating impact on crop production, which heavily depends on agro-chemical, leading to a sharp surge in food prices.

Skyrocketing Fuel Prices

Sri Lankan woke up to an unprecedented rise in petrol and diesel price, crunching the country into a deeper economic crisis.

The Lank Indian Oil Corporation (LIOC) in Sri Lanks has increased the price of petrol and diesel by about 50 Sri Lankan Rupees (LKR) and 75 LKR, respectively. As a result, for the first time in the country’s history, a liter of petrol is now 250 LKR, while a liter of diesel has touched the 200 LKR mark.

Children using kerosene oil lamps to study during long power outages in Colombo.
Children using kerosene oil lamps to study during long power outages in Colombo. Source: Al Jazeera

The LIOC statement attributes the historical fuel price rise to the depreciation LKR value. LKR’s value has fallen twice against USD in the last seven days, initially to 230 Rupees to one USD, and further to an exorbitant 260 LKR to a dollar.

The statement also highlights the full embargo of Russian oil and other essential products, further complicating the matter. The already looming danger of supplies being cut as there is a sharp rise in the price of crude oil is threatening to reach never before seen levels.

Sri Lank: Falling Deeper into Debt

With high government spending, crawling growth, and enormous foreign debt of 35 billion USD, Sri Lanks is one of the highest debt ratios. Furthermore, as the rating agencies ranked the country down over sovereign default, global bankers have been depleting quickly.

One of the few countries still financially supporting Sri Lanka is China. China has been building a major port in the island country and powering many construction projects. As a result, Chinese debt accounts for almost one-fourth of the country’s total debt.

Source: Al Jazeera

In a bid to resolve its worsening foreign debt prices, the government of Sri Lanka has decided to seek a bailout from the International Monetary fund, intending to shore up its external reserves.

The Deepening Economic Crisis of Sri Lanka

For months, Sri Lanka has been facing an acute economic crisis. And now, standing on the verge of collapse, the world bank estimated over half a million Sri Lankans have fallen below the poverty line since the pandemic began.

The world is losing confidence in Sri Lanka’s economic crisis, thus furthermore solidifying the bankruptcy situation. As a result, Sri Lanka is on the brink of bankruptcy with an acute shortage of essential goods.

The Last Resort for Sri Lanka

Sri Lanka must ensure access to raw materials and food rather than focusing solely on fuel. Globally, countries are stockpiling grain and exploring alternative business deals with Russia in response to the crisis.

Also Read: Pakistan’s Economic Crisis: Roots and Cause Explained

There are few options available to Sri Lanka to mitigate the effects of deteriorating food security and raw material access. In addition, due to wheat and rice being substitutes, high wheat prices may negatively impact rice demand

Domestic production can only be adequate if inputs, such as fertilizer are not in short supply. Due to the current foreign exchange crisis, Sri Lanka can’t handle shocks effectively. Markets will not trade promptly as long as the foreign exchange crisis persists.

If Sri Lanka wishes to restructure its debt, it may be best to obtain dollar inflows from multilateral institutions. Furthermore, predetermined prices for food can be negotiated with friendly countries, and forwarding contracts can be made for raw materials and fuel.

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Who Will Guard Gaza’s Future? Inside the International Stabilization Force and the Peace Summit

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As the world turns its gaze toward the upcoming Gaza peace moot scheduled in Sharm el-Sheikh, anticipation mixes with skepticism. Delegations from more than 25 nations, including Egypt, Qatar, Indonesia, Pakistan, and the United States, are expected to participate. The summit’s stated goal is to chart a post-war roadmap for Gaza: one that ensures reconstruction, stability, and long-term governance. Yet, beneath the diplomatic smiles lies a deeper unease. Will this summit bring justice, or simply repackage occupation in the language of peace?

While Egypt positions itself as a mediator and the United States attempts to portray itself as a peace broker, many in the Muslim world view this as an exercise in image management. For Gazans who have endured months of devastation, the word “peace” feels hollow when their children are still being buried beneath rubble.

The International Stabilization Force: A New Guardian or Another Overseer?

Central to the summit’s agenda is the proposed International Stabilization Force (ISF). It is a multinational security body meant to take charge of Gaza once Israeli troops withdraw. According to policy outlines discussed at the Council on Foreign Relations, the ISF would be composed of troops from Muslim-majority countries such as Egypt, Indonesia, and Turkey, supported logistically by the U.S. and possibly NATO allies.

Its mission is to oversee security, prevent rearmament, and assist in rebuilding civilian police institutions. Yet this concept immediately triggers questions of legitimacy and control. Who will the ISF answer to, whether it be the United Nations, the Arab League, or Washington? And will it protect Gazans or impose an externally dictated order?

Critics warn that such a force could serve as a buffer between Israel and Gaza rather than a guarantor of Palestinian sovereignty. A security expert quoted, “If the ISF’s mandate comes from Western powers, it may enforce stability at the cost of freedom.”

Gaza’s Sovereignty Between Protection and Control

The idea of international troops in Gaza is not new. Similar arrangements in Lebanon and Bosnia offered mixed results when peacekeeping often turned into passive observation, and local populations remained powerless. For Gazans, the fear is that the ISF might become an instrument to monitor them rather than protect them.

While Israel seeks guarantees that Hamas will not regain control, Palestinians demand something far simpler: the right to self-govern without occupation or military oversight. Many analysts argue that unless the ISF’s command structure includes Palestinian representation, it risks deepening mistrust.

Furthermore, there are legal and ethical dilemmas. If Israeli forces withdraw but still control Gaza’s airspace and borders through the ISF, can Gaza truly be called free? The world has seen this model before, which is an illusion of autonomy wrapped in the language of international cooperation.

The Politics Behind Peace: Competing Interests

Every participating nation arrives with its own agenda. For example, Egypt, leading the ISF, offers regional prestige. For Qatar and Indonesia, participation reinforces solidarity with Palestinians. For the United States, it is a strategic opportunity to maintain influence over the post-war narrative. Yet, for Gaza, each external interest risks turning the strip into a geopolitical chessboard.

Observers note that the absence of any confirmed Israeli participation in the summit is telling. It suggests that while plans are made for Gaza’s future, the voices of those who live there remain marginalized. Without Gazan and broader Palestinian leadership at the table, the summit risks becoming an exercise in deciding the fate of a people without their consent.

Reconstruction and Responsibility: The Road Ahead

Rebuilding Gaza will require an estimated $70 billion, according to updated UN and World Bank figures. Roads, hospitals, power grids, and schools must be reconstructed almost from scratch. The ISF, if deployed, will play a role in securing aid routes and ensuring humanitarian access, but security alone will not heal Gaza. Without justice, accountability, and economic sovereignty, reconstruction will be little more than rebuilding the cage.

Experts emphasize that any real peace must involve lifting the blockade, restoring trade access, and giving Palestinians control over their borders and ports. Without these measures, even billions in reconstruction funds will fail to bring lasting stability.

The Moral Imperative

The peace summit in Egypt and the proposed International Stabilization Force are being presented as symbols of hope. However, hope without accountability is fragile. If the world truly wants to guard Gaza’s future, it must begin by addressing the root cause of its suffering, which is occupation, displacement, and systemic denial of human rights.

True peace cannot be imposed, but it must be built on justice. For Gazans, peace is not about foreign soldiers on their streets. It’s about waking up without fear, owning their land, and rebuilding their lives with dignity. The question that remains is whether the world will finally allow them that chance.

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Crimes Against Humanity

Israel’s Airstrikes on Gaza Reveal the Fragility of Truce

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When a fragile truce was declared a few days ago, a brief wave of hope washed over Gaza. Families thought they might finally rebuild their shattered homes, search for missing relatives, and sleep without the thunder of jets. However, within days, Israeli warplanes were once again striking the besieged strip. The so-called ceasefire, brokered with international backing, proved to be another chapter in a series of broken promises and shattered faith.

Israel claimed its latest strikes were a “response” to alleged violations by Hamas. Yet, on the ground, the victims were overwhelmingly civilians. Gaza’s health authorities confirmed more than a hundred people killed in the first hours of renewed bombardment. Most of them are women and children. Hospitals, already operating on the brink of collapse, struggled to treat the flood of casualties amid power shortages and dwindling medical supplies.

The truce, meant to bring calm, instead became a cruel illusion. The hum of drones returned, the fear crept back, and families once again fled for survival through rubble-strewn streets. International media outlets described scenes of panic as people searched for shelter, knowing there was none.

Bombardment Under a Banner of Peace

Each new airstrike tears away the thin veil of diplomacy that labels this as a truce. Residential blocks in Khan Younis and Gaza City were flattened, as eyewitnesses described entire families buried under rubble. Aid convoys waiting at Rafah were delayed yet again, leaving tens of thousands of displaced families without food or shelter. Even temporary medical camps reported running out of anesthesia and blood supplies as wounded civilians poured in.

For many Gazans, this ceasefire was never about peace. It was a pause for breath, which means the one that Israel chose to weaponize. As one humanitarian worker told, “Every time they say peace, we prepare for more funerals.” The despair among civilians is palpable, as they question whether the world even listens anymore.

This renewed round of bombings underlines a haunting reality that every so-called truce has become another opportunity for Israel to reposition militarily while Gaza’s people pay with their lives.

Truce Without Trust: The Myth of Protection

The fragility of the ceasefire exposes an uncomfortable truth that there is no enforcement mechanism strong enough to hold Israel accountable. Western governments condemned the bombing with soft statements but continued supplying military aid. The United States, which once called for restraint, quietly approved another arms shipment days before the strikes resumed.

This moral contradiction fuels Gaza’s anguish. Washington preaches human rights yet funds the very machinery that violates them. The European Union speaks of international law but rarely acts when those laws are broken. For ordinary Palestinians, the message is clear that their lives are negotiable, their suffering expendable in geopolitical bargains.

Human rights analysts argue that without credible monitoring, ceasefires will remain political performances rather than pathways to peace. As one UN official said, “If a truce allows bombing to continue, it is not a truce but just a theater.”

The Humanitarian Fallout: Life Amid Rubble

The humanitarian picture is grim. The United Nations estimates over 1.7 million Gazans are internally displaced, living in makeshift tents, classrooms, or under broken walls. Clean water remains scarce, fuel is nearly exhausted, and disease spreads faster than aid. Children draw pictures of bombs instead of butterflies while mothers ration bread to feed hungry infants.

Entire neighborhoods lie in ruins while their residents wait for food deliveries that rarely arrive. The World Food Programme reports that over 90% of Gaza’s population faces acute food insecurity. Hospitals are short on insulin, cancer medicine, and even basic painkillers. In some areas, people boil seawater to drink. Aid agencies have warned that if the siege continues, famine could arrive before winter.

Yet trucks full of aid remain parked just across the border, which is a cruel reminder of political paralysis and global indifference.

Legal and Moral Accountability

Under international law, targeting civilians during a ceasefire violates the Geneva Conventions. Still, Israel acts with impunity, shielded by its Western allies. Human rights groups have repeatedly called for independent investigations, but efforts stall at the UN due to American vetoes. The International Criminal Court’s pending case on alleged war crimes in Gaza remains stalled by diplomatic pressure.

For the people of Gaza, these violations are not abstract. They are lived experiences with the sound of collapsing roofs, the dust in the lungs, the endless funerals of neighbors and friends. Each airstrike deepens a collective trauma that future generations will inherit.

International experts now warn that without accountability, the world risks normalizing war crimes. As Amnesty International stated, “A ceasefire without justice is a countdown to the next tragedy.”

What Lies Ahead

As diplomats gather to discuss the next phase of Gaza’s future, the ground reality remains unchanged. The truce is more fragile than ever, and the people it was meant to protect are once again paying the price. Unless the international community enforces accountability and demands a genuine end to hostilities, this cycle will repeat.

A ceasefire should mean safety, not survival between strikes. For Gaza’s people, peace cannot come from pauses in bombing, but it must come from the world’s moral awakening to their right to live, rebuild, and breathe free. The global community must decide whether it stands for human life or for silence in the face of genocide.

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Annexing the West Bank While Gaza Bleeds

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Gaza’s skyline has vanished under intense smoke, while its streets, once filled with life, now echo with silence and grief. Amid this devastation, Israel has chosen to open another front, and this time not with missiles, but with geography. The Knesset, Israel’s parliament, has recently advanced two bills that aim to formally annex large parts of the occupied West Bank. It is an act of political conquest, while on the other hand, Gaza’s children are buried under rubble.

This is not a coincidence but a continuity. As Gaza suffers from genocide, Israel is redrawing borders to make that erasure permanent.

A Legislative Land Grab

Recently, Israel’s parliament approved the first readings of two annexation bills. The first extends Israeli civil law to all West Bank settlements, which is a territory occupied since 1967 and recognized internationally as Palestinian land. When it comes to the second bill, it targets Ma’ale Adumim, a massive settlement east of Jerusalem that splits the West Bank in half, severing its north from its south.

Although the votes were close, with one passing 25–24 and the other 31–9, their meaning was profound. As per the reports, both bills were introduced while U.S. Vice President JD Vance was visiting Israel, symbolizing open defiance of Washington’s diplomacy. Prime Minister Benjamin Netanyahu hesitated to endorse them publicly, but pressure from his far-right allies, led by Bezalel Smotrich and Itamar Ben-Gvir, is relentless. Their ideology is clear: no Palestine, no partition, and hence no peace.

Gaza’s Agony: A Genocide in Real Time

While politicians in Jerusalem debate annexation, Gaza’s population fights to survive. The UN Commission of Inquiry has declared Israel’s actions in Gaza a genocide, which is a deliberate, systematic, and aimed effort at destroying a people. Till now, more than 67,000 Palestinians have died. Thousands have been displaced, and entire neighborhoods lie flattened. Hospitals function without power while aid convoys are bombed before reaching the hungry.

The International Court of Justice ordered Israel in January 2024 to prevent acts of genocide and ensure humanitarian access. None of those orders was respected. Moreover, the siege tightened, and starvation was made a weapon. Against this backdrop, annexation of the West Bank reads not as policy, but as a strategy that seems to be the second half of a single campaign to erase Palestine from existence.

Illegality Beyond Dispute

When International Law is brought into the limelight, Israel’s annexation efforts are null and void. Even the ICJ’s 2024 advisory opinion confirmed that Israel’s occupation and settlement expansion violate the Fourth Geneva Convention. The United Nations has repeatedly reaffirmed that any attempt to acquire land by force is illegal. States are required not to recognize or assist such measures.

Yet, Israel continues to act with impunity. Roads, checkpoints, and segregated zones have already turned the West Bank into an archipelago of isolated enclaves. The annexation of Ma’ale Adumim would cement that reality, rendering a future Palestinian state geographically impossible. As it was observed,

“Israel no longer hides its intent, and the map of occupation is clearly being turned into a map of sovereignty.”

Washington’s response has been familiar: sharp words, soft hands. Vice President Vance called the Knesset vote an “insult,” with a warning that it endangered the fragile Gaza ceasefire framework. Yet, U.S. military aid, which is nearly $3.8 billion annually, continues without condition. American arms still supply Israeli jets, and U.S. vetoes still block UN resolutions calling for accountability.

This pattern of contradiction has defined U.S.-Israel relations for decades, including public condemnation and private protection. Israel acts knowing that Washington’s rebukes will never reach the language of sanctions. It is diplomacy without deterrence, and therefore, carte blanche.

The Ceasefire Framework

As Gaza starves, diplomats continue to negotiate the truce. According to reports, the ceasefire plan includes a phased release of Israeli hostages, the freeing of about 2,000 Palestinian prisoners, and gradual Israeli troop withdrawals from urban centers. However, each new bulldozer digging into West Bank soil makes these efforts meaningless.

How can peace talks survive when one side expands the very occupation at their root? How can trust grow when homes are demolished under the shadow of negotiation tents? Consequently, the annexation vote mocks every word written in ceasefire communiqués.

What Lies Ahead

Inside Israel, Netanyahu faces a dangerous balancing act. His far-right allies threaten to topple his coalition if he slows annexation. Western allies warn of isolation if he proceeds. The prime minister’s hesitation is tactical, not moral. Whether annexation happens now or later, the machinery of occupation keeps grinding forward.

Internationally, legal pressure is rising but somehow easing, especially after the announcement of the so-called “truce”. The UN Human Rights Council urges accountability, while the European governments debate sanctions against settlers and arms-export suspensions. However, power still shields Israel from the consequences of law. The ICJ’s rulings carry moral weight, yet enforcement remains elusive. Until action matches outrage, international law will remain a promise unfulfilled.

Annexation during genocide is the moment when the world’s excuses run out. Law, morality, and history converge here. If the international community turns away again, the phrase “never again” will lose its meaning forever. And in the dust of Gaza and the stones of the West Bank, humanity itself will stand accused.

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