ranferdi wrote:The core of the problem lies in the totality of the loans taken , Total is close to 10,000 Billion LKR or 70Billion USD... Dear Just evalueate the figure when MR taken the government it was just beow 15 billion USD.
We cannot evaluate just comparing two figures like this.
A man gets his first job , and thought about buying a motorbike.
He obtained 40,000 as a loan for it.
After few years time he became an officer , wanted to buy a Maruti. He got 800,000 loan for it.
1. Initially the salary was 3000 and the loan was 13 times of his monthly salary.
1. Now he is getting 50,000 and 800,000 is 16 times of his salary.
You cannot blame him for increasing his debt from 40,000 to 800,000 .
He gets 50,000 and he is sure about his performances and salary increments in future too. So he can manage the loan.
Better way is comparing his producing capacity and loan. This is same for a company or country too.
This graph shows Sri Lanka's situation.
I had to rely on http://www.tradingeconomics.com/sri-lanka/government-debt-to-gdp
When Mahinda started our GDP was 24 B US$. At the end of his 10 years time it was 80 B US$. See the graph. If we continued at this rate even 100 B loan is manageable.