colombo sri lankas worst economic crisis has triggered an unprecedented wave of spontaneous protests as the island nation of 22 million people struggles with prolonged power cuts and a shortage of essentials including fuel and medicinespresident gotabaya rajapaksas government has come under growing pressure for its mishandling of the economy and the country has suspended foreign debt payments in an effort to preserve its paltry foreign exchange reserveson monday sri lanka will begin talks with the international monetary fund imf for a loan programme even as it seeks help from other countries including neighbouring india and chinahow did it get to this economic mismanagement by successive governments weakened sri lankas public finances leaving its national expenditure in excess of its income and the production of tradable goods and services at an inadequate levelthe situation was exacerbated by deep tax cuts enacted by the rajapaksa government soon after it took office in 2019 which came just months before the covid19 crisisthe pandemic wiped out parts of its economy mainly the lucrative tourism industry while an inflexible foreign exchange rate sapped remittances from its foreign workersrating agencies concerned about government finances and its inability to repay large foreign debt downgraded sri lankas credit ratings from 2020 onwards eventually locking the country out of international financial marketsbut to keep its economy afloat the government still leaned heavily on its foreign exchange reserves eroding them by more than 70 in two yearsby march sri lankas reserves stood at only 193 billion insufficient to even cover a month of imports and leading to spiralling shortages of everything from diesel to some food itemsjp morgan analysts estimate the countrys gross debt servicing would amount to 7 billion this year with the current account deficit coming in around 3 billionwhat did the govt do faced with a rapidly deteriorating economic environment the rajapaksa government chose to wait instead of moving quickly and seeking help from the imf and other sourcesfor months opposition leaders and experts urged the government to act but it held its ground hoping for tourism to bounce back and remittances to recovernewly appointed finance minister ali sabry told reuters in an interview earlier this month that key officials within the government and sri lankas central bank did not understand the gravity of the problem and were reluctant to have the imf step in sabry along with a new central bank governor was brought in as part of a new team to tackle the situationbut aware of the brewing crisis the government did seek help from countries including india and china last december the then finance minister travelled to new delhi to arrange 19 billion in credit lines and swaps from indiaa month later president rajapaksa asked china to restructure repayments on around 35 billion of debt owed to beijing which in late 2021 also provided sri lanka with a 15 billion yuandenominated swapwhat happens next finance minister sabry will start talks with the imf for a loan package of up to 3