Caruzo — How China, Green Politics and Democratic Socialism Destroyed Sri Lanka

The collapse of the Democratic Socialist Republic of Sri Lanka has no brakes. The soaring cost of living, power outages, food and medicine shortages, corruption and gross mismanagement by his government have led to a massive wave of protests against the president of the Asian nation of the South East, Gotabaya Rajapaksa.

A combination of rampant nepotism – the Rajapaksa family practically owns the country – deplorable “green” economic policies and reliance on the predatory Chinese Communist Party has left Sri Lanka in the worst economic crisis in its history.

The Sri Lankan rupee is the worst performing currency in the world, having been devalued by 15% in March 2022. By April, it had lost a third of its value. The country has experienced runaway inflation reaching over 18.7% in March 2022.

Sri Lanka is unable to rely on its own currency and is on the verge of depleting its foreign exchange reserves, preventing it from paying its local and foreign debt. It is also severely constrained in how it accesses food after becoming dependent on international imports for basic supplies – as such the government of Sri Lanka announced on Tuesday that it would default on its entire external debt of 51 billion dollars.

“The government is only taking the emergency measure described in this memorandum as a last resort to prevent a further deterioration in the financial situation of the republic,” said a statement from the country’s finance ministry.

The country has seen its food sovereignty demolished by banning fertilizers and chemicals in an attempt to switch to “organic” farming, which has resulted in a sharp reduction in yields. The measure was reversed in November 2021 after a series of protests from farmers, but the damage had already been done, forcing the country to import rice to stabilize its own domestic market.

Tourism, one of the country’s main sources of income, has been badly affected by the Chinese coronavirus pandemic – from 1.9 million tourists in 2012 to just 280,000 in the first quarter of 2022. The few people who traveled around the country found it so deteriorated that some joined the protests.

As a result, it has become more difficult for struggling Sri Lankans to access and obtain food. Over the past four months, the cost of living in Sri Lanka has risen dramatically, with staples such as rice and cooking gas cylinders rising by 85% in the past four months, from 7, $50 to $13.25, leading many families to cook with firewood.

“We used to have three meals a day, but now we have to skip dinner because of the little income we have. This is all due to the rising prices of essential goods,” said Sri Lankan Susila Irangani in a recent article in the UK. Telegraph.

Vegetables and other daily rations from India have alleviated the worsening situation, but many basic products remain almost impossible to find.

A cup of traditional Ceylon tea, also known as Sri Lankan tea, went from 10 Sri Lankan rupees in October 2021 ($0.031) to 100 LKR in March 2022 ($0.31).

The drug shortages have been getting worse day by day and, together with the ongoing power outages, could lead to a serious health crisis in the country. Hospitals have started to run out of essential drugs and supplies, 80% of which must be imported by the country.

Blackouts are now plaguing the Southeast Asian nation, which can last anywhere from ten to 13 hours at a time and could very well continue into May. Streetlights were turned off to save electricity. Schools have canceled exams because there is no paper for students to take exams with and the country can no longer afford to import them.

Fuel shortages in Sri Lanka have worsened exponentially, with queues lasting for hours and now monitored by the Sri Lankan military. The sale of fuel in cans and barrels has been banned by state-owned The Ceylon Petroleum Corporation (CPC).

Local authorities reported that at least five men died while queuing for petrol.

President Rajapaksa and his ruling family have offered few answers to the crisis, leaving many to question their position in society.

The country has been ruled by the Rajapaska family for over two decades now. The current President, Gotabaya Rajapaska, and his brother Mahinda Rajapaska (former President and current Prime Minister) are widely credited with ending the 26-year civil war between the government and the Tamil Tigers.

Nepotism is abundant in the Rajapaksa regime. The family has been part of Sri Lankan politics since the country gained independence in 1948. Between 2010 and 2015, more than 40 members of the Rajapaska family have held government posts, cabinet posts and even held diplomatic posts in the stranger. To this day, many members of the Rajapaska family continue to hold key government offices.

The Rajapaksas largely led the country to fall prey to China’s infamous debt traps under its Belt and Road Initiative (BRI). The BRI offers predatory loans to poorer countries which the countries then use to pay China to buy infrastructure projects. China pockets the cost of labor, the interest on the loan and, in cases like Sri Lanka, the territory inside the country when it fails to repay the loan. In 2009, Sri Lanka received a $1.2 billion loan from China to renovate the Hambantota seaport. Unable to repay the loan and its high interest, the country had to cede control of Hambantota and 15,000 acres of its territory to China in 2017 on a 99-year lease as part of its loan repayment process, which could potentially be extended to a 198-year lease.

Food vendors also accuse the Rajapaksa government of selling everything to China, in addition to imposing policies that have made Sri Lanka largely dependent on imports.

Palitha Kohona, Sri Lanka’s ambassador to China, says her country is not in a Chinese debt trap, but reports indicate the Rajapaksa government appears to be seeking Chinese loans as a solution to Chinese loans – Reuters has reported in March that China is considering offering a $1.5 billion loan to Sri Lanka in addition to the $1 billion loan the Sri Lankan government had already requested.

Amid a deepening crisis, the first cases of Sri Lankan citizens fleeing the country have started to surface.

All Sri Lankan cabinet members except President Rajapska and his brother, the Prime Minister, have resigned amid growing protests this month.

President Rajapaksa has said he has no intention of resigning.
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.

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