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Sri Lankan army patrol on a main road in Colombo following clashes between anti-government protesters and supporters of the Rajapaksa family.

REUTERS/Dinuka Liyanawatte

Sri Lanka on the brink

For weeks, Sri Lanka has been in the grips of a deepening economic and political crisis, teetering on the brink of anarchy and chaos as a largely bankrupt state at risk of becoming a failed one. Massive protests driven by soaring fuel and food prices have forced the resignation of Prime Minister Mahinda Rajapaksa and upped the pressure on the international community to help alleviate the suffering of Sri Lankans. China and India, which have both vied for influence in the small island nation, are looking on nervously. We spoke to Eurasia Group’s Peter Mumford to get a sense of what might happen next and what the geopolitical stakes are.

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Sri Lankan workers protest in front of the president's office at Colombo.

Tharaka Basnayaka via Reuters Connect

What We’re Watching: Sri Lanka on strike, trouble in Transnistria, Salvadorans back Bukele

Sri Lankans strike to get president out

Virtually all business activity in Sri Lanka ground to a halt on Thursday, as workers went on a nationwide strike to demand the resignation of President Gotabaya Rajapaksa. For weeks, Sri Lankans have been protesting amid the country’s growing economic and political crisis. Sri Lanka is on the brink of bankruptcy, having already defaulted on its sovereign debt and depleted its foreign currency reserves used for food and fuel purchases. Officials have been trying to get some relief from China and the International Monetary Fund, but Beijing will only refinance, and the IMF requires deep economic reforms. Meanwhile, trade unions say they'll strike permanently if Rajapaksa doesn't step down by May 6. The president is willing to appoint a new interim government and even drop his brother Mahinda as PM, but Mahinda himself has refused to resign. The opposition, which is close to getting a no-confidence vote to remove both Rajapaksas, hopes to appease Sri Lankans who have lost faith in their political leadership.

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Drivers push their three-wheelers while waiting in a line to buy petrol amid the country's economic crisis in Colombo, Sri Lanka.

Reuters

Is the global debt apocalypse here?

As the world largely began shifting to the “we have to learn to live it” stage of the pandemic late last year, many economists anticipated that hard-hit low- and middle-income countries might finally catch a break.

But then Vladimir Putin’s imperialist instincts got the better of him, and Russia decided to pancake Ukraine. The war’s economic effects are reverberating worldwide, with food and fuel shortages sending already high inflation soaring. Unsurprisingly, emerging economies with shallow pockets are reeling.

The backstory. Amid the pandemic, many low-income countries took on new debt to insulate their economies from the economic pain caused by rolling lockdowns, closed borders, and business closures. But even before COVID, many countries – such as Zambia, Sri Lanka, and Ecuador – were already heavily indebted partly as a result of government mismanagement and corruption. The pandemic-induced recession caused global indebtedness to balloon to a 50-year high.

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Ukrainian President Volodymyr Zelensky in Kyiv.

Reuters

What We're Watching: Zelensky snubs Berlin, IMF warns of debt shock, Indonesia passes sexual assault bill

The latest from Ukraine

In a stunning rebuke, Ukraine’s President Volodymyr Zelensky on Tuesday refused to host German President Frank-Walter Steinmeier, who was planning a solidarity tour to Kyiv along with the presidents of Poland, Estonia, Latvia, and Lithuania. Zelensky’s snub comes just days after he rolled out the red carpet for British PM Boris Johnson and strolled around the Ukrainian capital with him. Part of this is about Steinmeier specifically: during his two stints as German foreign minister – including in 2014 when Russia annexed Crimea – he showed great deference to Moscow. What’s more, he’s good buddies with former German Chancellor Gerhard Schröder, who is famously cozy with the Kremlin himself. But Zelensky is also peeved at the Germans more broadly for failing to kick their Russian gas habit and sever economic ties with Moscow. Critics have also condemned Berlin for not sending Kyiv enough weapons. Still, was Zelensky’s decision to shame Europe’s largest economy a wise move? After all, he will still need Germany on board to further isolate Vladimir Putin – economically and militarily. That’s all the more true since Putin said Tuesday that peace talks with Kyiv have reached “a dead end,” vowing that his troops would continue to pursue their “noble” aims in Ukraine.

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Pandemic Worsens; Defunding the Police; Debt Crisis & Europe Leadership | World In :60 | GZERO Media

Pandemic worsens; defunding the police; debt crisis & Europe leadership

Ian Bremmer provides his perspective in a bit more than 60 seconds:

First, the W.H.O. says the coronavirus situation is "worsening" worldwide. Where is it getting worse?

Well, still in about a dozen US states where the reproduction number is greater than 1.0. In other words, we have flattened the curve in the United States as a whole. And New York City has a lot fewer, the metro area, has a lot fewer cases than it used to, a lot fewer deaths. But in 12 states across the country, you still actually have significant increases exponentially, though largely from lower numbers of cases. So, there's that. Most of that's in the south. Some of the Midwest. And hopefully won't expand dramatically on the back of all of the protests we've had for the last week and a half.

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