On May 12, India confirmed that it would provide a desperate Sri Lankan government 65,000 metric tons of urea, pursuant to an existing $1 billion credit line. The sale, which overrides New Delhi’s ban on the exports of the commodity, relieves severe pressure on the government of Sri Lankan President Gotabaya Rajapaksa.
Sri Lanka since the end of March has been wracked by violent protests. “Shoot-on-sight” orders have for the most part restored order, but the unrest has led to the replacement of Prime Minister Mahinda Rajapaksa, once the country’s dominate political figure. His brother, the president, is unlikely to survive the tumult. The ongoing economic and financial crisis is Sri Lanka’s worst since independence from Britain in 1948.
Sri Lanka is only the world’s opening act. Disturbances there constitute the first in a series of crises about to engulf vulnerable countries, perhaps even large ones. The war in Ukraine, aggravating underlying problems in Sri Lanka and elsewhere, is shaking just about every corner of the planet.
Events in Sri Lanka also highlight how China is going about dominating the world. Beijing is corrupting national leaders, drowning them in debt, and ultimately destabilizing their governments. Beijing, it appears, is particularly targeting democracies.
India’s urea, a fertilizer, will allow Sri Lankan farmers to plant in the May-August Yala cultivation season. It comes at a time of critical need. The country was spending about $400 million annually to import fertilizer but had not been able to make purchases recently due to the lack of foreign exchange. The government last year, to conserve currency reserves, banned chemical fertilizer.
The finance ministry reports that the country has only $25 million in usable foreign reserves on hand, hardly sufficient to service obligations. Sri Lanka is scheduled to repay $7 billion in debt this year, a part of the $26 billion due by 2026. The country’s total foreign debt is $51 billion.
The chemical fertilizer ban forced farmers to abandon paddies, and some joined the recent protests.
There is, as a result, hunger in the country, and soaring food prices have fueled protests. “I’ve been living in Colombo for 60 years, and I’ve never seen anything like this,” said Vadivu, a domestic worker, to AFP in March. “There’s nothing to eat, there’s nothing to drink.” This month, food prices there, Sri Lanka’s most-populous city, tripled in the space of a few days.
The new prime minister, Ranil Wickremesinghe, said he would ensure that everyone had three meals a day. “There won’t be a hunger crisis, we will find food,” he told the BBC.
That is a promise Wickremesinghe may not be able to keep. Sri Lanka cannot solve its problems on its own. The COVID-19 pandemic ended tourism, a main source of revenue. Moreover, the Russian invasion of Ukraine — both countries are big sources of tourists for Sri Lanka — killed hopes for a recovery this year.
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