What future for Sri Lanka?
— The time of politics
SRI Lanka, an island nation with a population of 22 million, is in serious trouble both economically and politically. The country lacks fuel, electricity, food and medical supplies. Its dwindling foreign exchange reserve is unable to import even the most essential items for the country. The country’s finance minister had to ask for streetlights to be turned off to save electricity. Schools have been closed. People have been asked to stay home to help conserve supplies. More than 1,000 bakeries have been closed due to a shortage of cooking gas.
Sri Lanka’s economic crisis began in 2019. It is the country’s worst economic crisis since its independence in 1948. The situation worsened when fuel prices on the international market began to rise sharply, forcing countries such as Sri Lanka whose foreign exchange reserve is diminishing to drastically reduce its fuel imports. This results in power cuts of 10 to 12 hours a day.
The crisis has led to unprecedented levels of inflation, 54% in June 2022, a near depletion of foreign exchange reserves, a shortage of medical supplies and an increase in the prices of basic commodities. No wonder the generally peaceful people of Sri Lanka have taken to the streets to demand the immediate resignation of their President, Prime Minister and other senior government officials.
The country’s prime minister, Mahindar Rajapaksa, one of the Rajapaksa brothers, resigned on May 9 after giving in to protesters’ demands. And then Gotabaya Rajapaksa, the president of the country, another brother of Rajapaksa, fled the country and then resigned from abroad leaving behind Ranil Wickremengse, as the country’s interim president after months of mass protests and invading the presidential palace, especially after protesters took control of state-owned television stations and important government offices.
Ranil Wickremesinghe is now Sri Lanka’s new president after being overwhelmingly elected as the country’s head of state in a parliamentary vote on July 20. Despite all these developments, the nation does not yet see the light at the end of the tunnel. The protesters, although relatively calm at the moment, have vowed to continue fighting against Wickremesinghe’s government. They do not want Wickremesinghe, an ally of the Rajapaksa family, as the country’s president or prime minister. They want him gone.
In fact, they want all major officials associated with the Rajapaksa family out of the government log and barrel stockpile. They want a president of their choice who will be able to get the country out of its worst economic crisis since independence. However, under the current circumstances, they probably have no choice but to wait for the next general election unless they can repeat their recent dramatic show of people power that ousted former President Gotabaya and the members of his family from power.
The road ahead for newly elected President Ranil Wickremesinghe is by no means easy. First, he won’t find too many people with him on his arduous journey. Second, he will have to support a bankrupt nation with 22 million people enduring severe shortages of food, fuel and medicine.
Sri Lanka did not deserve such a critical situation as it is today. Located in the Indian Ocean and encompassed by the Bay of Bengal to the east and the Arabian Sea to the west, it is a multinational state, home to diverse cultures, languages and ethnicities. Its geographical location and deep ports gave it great strategic importance from the early days of the Silk Road trade route to today’s so-called Maritime Silk Road, making it a commercial hub between east and west.
Until recently, Sri Lanka was a developing country with the second highest per capita income in South Asia. It was self-sufficient in rice production with imports limited to special rice like basmati only. Its tea, one of the finest in the world, occupied a large market in the world. In short, the people of Sri Lanka were not only well off with their harvest and agro-food textiles, they were also proud of their production.
Yes, the impact of the Covid pandemic, like many other countries, had put Sri Lanka’s economy in serious trouble, but before it could begin to recover from the impact of the pandemic, it there was the economic shock of the corruption, mismanagement and mismanagement of the Sri Lankan regime, better said the Rajapaksa dynasty.
President Rajapaksa’s bad policies and poor economic management have disrupted the country’s economy in a matter of months. His decision to introduce organic farming by banning inorganic fertilizers and agrochemical fertilizers hit agricultural production hard, cutting the harvest by more than half and increasing the cost of production at least ten times more than before. The decline in tea production due to the fertilizer ban alone has led to an economic loss of about $425 million in one year and a 20% drop in rice production forcing the country to import rice worth $450 million. of dollars.
Tourism is another sector that has contributed immensely to the economy of the country. The deep forests of the Midlands crowded by a variety of animal species including elephants and surrounded by the seas all around with beautiful beaches have made the Sri Lankan landscape extremely attractive for tourists. The tourism industry accounted for more than a tenth of the country’s GDP. Tourism earned Sri Lanka $4.4 billion and contributed 5.65% of GDP in 2018 and this figure fell to around 0.8% in 2020, largely due to the 2019 Easter bombings, of the Covid pandemic, then of the mismanagement of the current regime.
Not paying interest on its staggering $52 billion external debts, Sri Lanka’s development partners are reluctant to lend more money to Sri Lanka, especially when the country is in the throes of serious political turmoil. . The World Bank has agreed to lend $600 million to Sri Lanka and $1.9 billion to India. The IMF is also discussing a possible $3 billion loan. What Sri Lanka now needs is to have a stable and functioning government free from corruption and mismanagement. The sooner they get it, the better it is for the country.
Despite such a grim scenario as it is now, Sri Lanka has every reason to bounce back to its prosperous days sooner or later as the country has a rich human resource. Its literacy rate is higher than that of any other country in South Asia. Its people are hardworking, tolerant, resilient and full of potential.
Hussain Imam is a retired merchant seaman.