Sri Lankans suffer from a sluggish economy


IAnger is building in Sri Lanka, a former Ceylon hit by the worst economic crisis since independence in 1948, and is experiencing endless lines at gas stations and record power outages, up to ten hours a day since Wednesday.

With a severe shortage of foreign exchange, the island, whose hospitals are on their knees, can no longer import vital supplies, leading to acute shortages ranging from life-saving medicines to cement.

In the long lines that line up before dawn at gas stations, everyone is worried about how they will be able to feed their families when food prices soar.

“I’ve been here for five hours,” said Sagayarani, a housewife in Colombo, who is waiting for her ration of kerosene to light the stoves of the capital’s poorest households.

She says she’s already seen three people pass out and that she herself should be in the hospital for treatment, but with her husband and son at work, she has no choice but to die waiting in the hot morning sun.

“I haven’t eaten anything, I’m dizzy and very hot, but what can we do? It hurts a lot,” she said, declining to give her last name.

At the port, trucks cannot transport food and building materials to other urban centers, or bring tea from plantations in the highlands in the center of the country.

“Mismanagement”

Buses carrying daily workers in the capital have ground to a halt and a growing number of hospitals have suspended non-emergency operations, including the largest in the country. Due to paper shortages, school exams have been postponed for millions of students this month.

Having emerged from several decades of civil war in 2009, the country is accumulating difficulties.

Agriculture was hit by a catastrophic drought in 2016, tourism was decimated by Islamist attacks on Easter Sunday 2019 that killed at least 279 people, and then the Covid-19 pandemic brought remittances from Sri Lanka to a halt.

After a record contraction of 3.6% in 2020, GDP began to grow again in 2021 at +3.7%.

Tourism and the diaspora are two vital sources of foreign exchange needed to import and service the country’s $51 billion (46 billion euros) external debt.

But according to Murtaza Jafferjee, president of the Colombo-based think tank Advocata Institute, “government mismanagement” is far more important.

Mr Jafferjee points to chronic government budget deficits, unjustified tax cuts just before the pandemic that robbed the government of revenue, and subsidies for electricity and other public services that benefited Sri Lanka’s richest disproportionately.

Bad policy decisions exacerbated the problems. Last year, the authorities announced that Sri Lanka would become the first country in the world to practice fully organic agriculture, and overnight banned fertilizer imports to slow down foreign exchange outflows.

Anger

In response, farmers left their fields empty, causing food inflation until the policy was lifted a few months later.

Sri Lanka has requested IMF assistance, but negotiations could take until the end of the year.

“I expect it to be much worse,” Jafferjee predicts. “Unfortunately, they cannot contain it because the people who created the crisis are still in charge of running the economy.”

At night, when the orange light of streetlights floods Colombo’s more affluent neighborhoods, large swathes of the city are almost plunged into darkness.

Due to power outages lasting several hours every day, restaurants and shops are struggling to operate by candlelight. Other merchants prefer to lower their metal shutters as night falls.

Anger is directed at the administration of Gotabai Rajapaksa, a member of the ruling family once beloved by most of the country’s Sinhalese majority for abruptly ending the ethnic civil war against the Tamil tigers.

Since then, support for the Rajapaksa clan has ceased. This month, an angry mob attempted to storm the president’s office.

“We have been dragged to the brink of an abyss,” condemns Mohammed Afker, a student who took part in a rally of thousands calling for a left-wing opposition coalition.

This 20-year-old young man explains to AFP that the pressures of everyday life leave him no time to even consider his slim chances of finding a job after graduation.

“We can’t even buy the bare necessities. We can’t even make tea at home,” he laments. “Our future is in question. We are protesting here because everything has to change.”

03/30/2022 14:16:05 – Colombo (AFP) – © 2022 AFP

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