EMERGENCY IN SRI LANKA

Sri Lankan President Gotabaya Rajapaksa declared emergency on Friday after a crowded protesting mob tried to attack his residence and damage it out of anger because of serious economic crisis going on in the nation. There is huge shortage of fuel and food. What invoked the citizens, both poor and rich, to rush on streets to protest? Let us try to know what exactly happening in Sri Lanka. 

The Economic Crisis

Sri Lanka is currently having Foreign Reserves low to the extent that it can only import basic items utilizable for a month only. The Reserves decreased by 70% in the last one month. Sri Lanka is heavily dependent on import, even for the basic items like sugar, mil products, fruits, wheat, etc. Due to inability to import, the inflation rate increased to 25%.

In simple words, the prices of basic items have increased: Price of Rice, sugar, Milk powder, etc. have crossed to an extent that a common man cannot afford. The Electricity cuts severely increased to a point that only 10 hours of supply is possible; the street lights are ordered not to be used to save electricity. The prices of gas cylinders have increased to 4200 Sri Lankan Rupees.

Thousands gathered outside the President's residence

The situation has worsen to an extent that people are leaving the country. More than 20 people are found at the Rameswaram coast in Tamil Nadu which have been sent to the refugee camps. India is helping Sri Lanka by extending the LoC (Line of Credit) of $1 billion to procure food items and $500 million to buy petroleum products.

What led to such a serious downfall of Sri Lanka not only in economy but also in terms of national stability? The whole issue is mix of both political incompetence and chain of communal violence that influenced nation's tourism.

Reasons For Sri Lankan Downfall

a. Influence on Tourism and Communal Tension

12-13% of Sri Lanka's GDP comes from tourism. But in April 2019 came the Easter day on which the Tragic event happened, known as Easter Day bombings, where bomb blasts took place in 3 churches and 3 hotels. 269 people lost their lives out of which 45 were tourists. This led to the heavy downfall of Sri Lankan tourism, followed by Covid-19 pandemic just a year ahead. 

There were two anti-Muslim riots took place in 2018 and 2019. Easter day bombing was said to be done by suicide bombers came from Sri Lankan local Islamic terrorist group. With more investigation, it was found out that the riots were done by Sinhala Buddhist group; Facebook paper leak revealed highly anti-communal posts were circulated in that particular period of time. Facebook apologized afterwards for the communal toxicity being spread. 

These incidents increased communal tension which can never be in favor of any nation however powerful or weak.

b. Bad Decision Making by Government

The new Government was elected in 2019 which promised to cut down the taxes so that public spending can increase and economy can grow rapidly. Though it was a good step for the development but the timing was extremely bad. In December 2019, the taxes were reduced and in March 2020, worldwide lockdown due to Covid-19 pandemic resulted in heavy downfall in economy.

Due to this, there was a huge additional revenue loss of government which resulted in increase in national debt of Sri Lanka. In 2021, the 119% of the total GDP is the value of debt which the Sri Lankan government had to repay. 

Protesters demanding President's resign

In 2019, the Sri Lankan government took a step towards 100% organic farming and completely eliminated the usage of fertilizers which could not only lead to a healthy and economical way of farming but also to stop the import of fertilizers to save money. But due to lack of execution lead Sri Lanka to food inadequacy. 

The food crisis can be understood by the fact that Sri Lanka had to import Rice and Tea from outside. Sri Lanka has been the top producer of Rice and Tea around the world. There is a big role of Food Mafia for black marketing of basic food items. 26 ministers from the Sri Lankan cabinet resigned after the crisis grew high. Public went angry at government and protesting against the President Rajapaksa.

Conclusion

In just a month, the value of Sri Lankan Rupee fall drastically from 200 SL Rs. to 300 SL Rs. for 1 US Dollar. Sri Lanka asked for help from China, IMF (International Monetary Fund), and World Bank. It also fall into trap of China once that led to the privatization of government owned properties. The effect of Sri Lankan crisis will also be seen on India as there will be more refugees coming from Sri Lanka to Tamil Nadu.

It is said that emergency rule will be withdrawn in a few days but the way protest is continuing, it is not a good sign for a nation. Students, local citizens, hotel workers, doctors, etc. all kinds of people are protesting for the serious scarcity of resources in the domain they are working. The complete population is being pushed into poverty.