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Sri Lanka’s Economic Crisis and How to Halt a Global Economic Unwinding

Many Western leaders are behaving as though there is one crisis in the world: Russia’s invasion of Ukraine. While some are waking up to the widespread knock-on effects for food and energy security, there is little bandwidth, it seems, to address the underlying looming crisis: a global economic unwinding driven by the COVID-19 pandemic, climate breakdown, and degradation of the international political and economic system that has been at least a decade in the making.

Together, these crises have put scores of countries at serious risk and lit a fuse where those risks intersect with authoritarianism and poor governance. Sri Lanka is a case in point. The country owes over $50 billion to government creditors such as India, China, and Japan, and private bondholders—and it is no longer making interest payments. 

The reasons for its economic woes are complex. Sri Lankan President Gotabaya Rajapaksa’s family has dominated the…

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