COMMENT | It’s become rather fashionable for many of us to compare Malaysia’s situation with that of the failed, bankrupt, once rather promising state of Sri Lanka. Is that a valid comparison, are we really that bad, and if we are not already anywhere near close, are we already firmly headed down that path?
What lessons, if any, can we learn from Sri Lanka and can we draw parallels between them and us which would be useful for us? The answer is yes for some and no for others. Let’s get to it.
Right now, it’s really not a fair or reasonable comparison at all - Sri Lanka’s economy has collapsed - they don’t have enough reserves - just US$1.92 billion according to one report - ours was a very respectable US$116 billion at the end of last year.
Their trade balance was negative US$8 billion for 2020, ours was a positive US$63 billion for 2021 - we earn a considerable amount of foreign exchange to purchase our imports, they don't, which is why they can’t buy foreign goods.
Their debts are 101 percent of gross domestic product or GDP, the sum of goods and services produced in a year, ours 68 percent. Importantly, they don’t have enough foreign exchange to service their foreign debts, we have more than...