Who created the Sri Lanka crisis?

In Colombo, Sri Lanka, on July 5, tricycles line up to refuel. (Xinhua News Agency/Reuters/Photo)

"The president's resignation is a positive statement." Natasha, who lives in Negombo, Sri Lanka, told Southern Weekend.

After massive protests, on July 11, 2022, Sri Lankan President Rajapaksa signed a resignation letter, but the date of payment was filled in july 13.

Sri Lankan Parliament Speaker Abawadna said that the leaders of various political parties will convene a parliamentary meeting on July 15, nominate a presidential candidate on the 19th, and elect a new president on the 20th.

In recent months, Rajapaksa has been the focus of widespread protests in Sri Lanka, including severe shortages of food, fuel and medical supplies and services, as well as a crisis that has led to the country's inability to repay debts, record inflation and food insecurity for more than six million people.

Zeng Xiangyu, an associate researcher at the Institute of South Asian Studies at Sichuan University, told Southern Weekend that if sri Lankan parties can use this incident as an opportunity to put aside their prejudices and establish a unity government of all parties to jointly solve the domestic crisis, there will still be a day when they will "see the light again". On the contrary, it may delay Sri Lanka's pace of getting out of the "quagmire".

"The crisis is much worse than the civil war at the moment"

"These two days came to the street and saw that the presidential palace has become a 'punch card' place, and many people take photos here." Zheng Shaojian, a Chinese in Colombo, the capital of Sri Lanka, told Southern Weekend reporters.

Mr. Cheng said the Sri Lankan police and special forces simply stood in the corner and watched quietly as some protesters led people into the presidential palace.

Outside the mansion, on the manicured lawn, hundreds of people were wandering around.

The capital has now returned to relative calm, but this is the most serious turmoil that Zheng Shaojian has experienced in the nearly 15 years of working in Colombo.

On July 9, 2022, a protest of unprecedented proportion broke out in Colombo, where thousands of protesters stormed the presidential residence and the presidential palace and set fire to the prime minister's private residence.

"I've lived here for over a decade and have experienced some local riots and explosions before, but none of them have been as serious as this one." Zheng Shaojian has opened a Chinese restaurant in the local area, and since April 2022, Sri Lanka's economic situation has begun to deteriorate, and his business has also been affected. "But the people who are most affected are the Sri Lankan locals."

Natasha, who took part in the protest, told Southern Weekend, "We gathered in protest places, or held black flags, or shouted and danced in the streets like children." ”

In the face of strong public pressure, the president and the prime minister both announced their resignations. Under the Constitution, the Speaker of parliament will act as President for no more than 30 days. Within 30 days, Parliament will elect members as president, completing the remaining two-year term.

Gao Gang, deputy director of the Sri Lanka Research Center of Sichuan University, told Southern Weekend reporters, "The president's resignation is not conducive to the stability of the situation and the solution of economic problems." Even if the president steps down, Sri Lanka's debt problems, follow-up economic problems, foreign exchange problems, price problems, energy and resource shortage sources, etc., cannot be solved in the short term. ”

As Zheng Shaojian said, although the president resigned, it only left a "mess".

"I had to wait in line at the gas station for two or three days to get fuel." Hemachandra, who makes a living by driving a taxi in Colombo, told Southern Weekend, "Even so, very few people are willing to pay for a taxi now, and it has never been so difficult to make money." ”

The fuel crisis remains one of Sri Lanka's main difficulties at present. Since April 2022, Sri Lanka's foreign exchange reserves have nearly dried up, the government has run out of money to buy fuel, and gasoline and diesel have become scarce. The people had no choice but to stand in line to refuel in the scorching sun.

Hemachandra was in line near the end of the line, and the day before he had waited from 12:30 noon until the evening until the gasoline ran out. But he didn't drive the car away, and the next morning he rushed to the gas station again, waited for 7 hours, and finally refueled.

To the surprise of the public, from July 10, Sri Lanka stopped selling fuel to ordinary people, becoming the first country in the world to "cut off oil" since the 1970s.

On July 3, Sri Lanka's Electricity and Energy Minister Vijay Sekla said Sri Lanka's diesel reserves were 12,774 tons and petrol reserves were only 4,000 tons. The next shipment of gasoline is not expected to arrive in the country until July 22-23.

Not only the price of fuel, but also daily necessities, has soared.

Natasha told Southern Weekend reporters that all commodities, including milk, are more than three times as expensive as they were three months ago. "A 400-gram milk bag, once at Rs 350, is now Rs 1250." Natasha says people here love to eat rice, which used to be Rs 98 per kilogram of rice and is now Rs 320. "Prices of everything have been rising recently."

To save money, Hemarhandla eats up to two meals a day, sometimes just one. "In the past, I could at least afford to eat three meals a day with my family, but now, without income and no support from the government, I don't know what to do."

Hemachandra was a witness to Sri Lanka's nearly three decades of civil war. He felt that the current crisis was much more serious.

The Sri Lankan Civil War was a military conflict between the ethnic groups of the Democratic Socialist Republic of Sri Lanka and between government and rebel forces from 23 July 1983 to 18 May 2009, mainly between the Government of Sri Lanka and the Liberation Tigers of Tamil Eelam.

"Even during the war, we were able to buy kerosene to drive a tricycle, and there was no shortage of food because there was a lot of international aid and food delivered here. Today, we are struggling with basic food and clothing. Hemachandra sighed.

There are about a thousand Chinese living in Sri Lanka, and in the recent turmoil, many of the Chinese Zheng Shaojian knows have returned to China. Since he has been settled in Sri Lanka for many years, Zheng Shaojian does not plan to leave for the time being, "or want to continue to hold on, to see if the situation will be better at the end of the year."

Sri Lankans on the run

According to Sri Lanka's Immigration Department, the country issued about 290,000 passports in the first five months of 2022, three-quarters of the number of passports issued in 2021 (383,000).

Eric, a resident of Colombo, sri Lanka, told Southern Weekend that "people are desperate to live a decent life there," so many people chose to leave, "hoping to live a better life abroad." ”

Eric's neighbor Brito worked in a local garment factory in Colombo. Soaring prices and falling wages forced Brito to quit his "decent job", apply for a work visa and move to Seychelles, nearly 4,000 kilometres from Sri Lanka, in search of new opportunities.

"Sadly, his wife and daughter stayed in Sri Lanka." Eric explained to Southern Weekend that given the family's expenses after emigrating, Brito eventually decided to work alone in a foreign country. "For the next 5-10 years, he may come back to visit them every two years, which is a great harm to a family."

Among Sri Lankans who left their homeland, "some had official work visas and some took boats illegally", Brito was the lucky former, while many poor people chose the latter and embarked on the adventure of smuggling.

Rani, 41, had to sell her land in Sri Lanka, using the money to rent a boat and flee to India with a family of eight. They were accompanied by a family of four, a couple with their two children, aged four and one and a half years.

"My husband can't find a job. Food prices in Sri Lanka are rising every day, and we have to spend 500 rupees a day just to buy rice, so we can't buy any other food for our children. Lani said her son suffers from thalassemia and needs more nutritious food, "I want to provide a better life for my children, which is why I decided to come to India." ”

According to the Australian Broadcasting Corporation (ABC), many Sri Lankans seeking asylum are crowded in trawlers going out to sea to fish, looking forward to arriving in Australia after a long voyage.

According to the Russian Satellite News Agency, most of those who wish to leave Sri Lanka by boat are Tamils, who live mainly in northern and eastern Sri Lanka. People travel to India through the Migration Agent at a cost of about $800 and to Australia for about $4,000, a 21-day voyage.

However, those fleeing Sri Lanka can only take fishing boats that are not suitable for going to sea.

Since May, the Sri Lankan Navy has intercepted hundreds of trawlers carrying illegal migrants to other countries before being returned to Sri Lanka.

"It is the poor who suffer from this crisis." Yao Ye, a Chinese who works in Beruwala, Sri Lanka, told Southern Weekend, "In the black market, 60 yuan may not be able to buy (one liter) of gasoline now, and the price of gas has increased by five or six times." ”

Natasha said that going abroad to earn a living is currently the only way for families to survive. "We really don't know when it's going to get back to normal and we're very frustrated. Even if people are qualified and have high salaries, they are still not enough to support life. "Natasha's cousin, who used to work at the bank, had promised her cousin that he would get a raise after his baby was born." Now I am afraid that it is difficult to achieve, and it is difficult for my cousin to pay even the water and electricity bills at home. ”

"The Last Straw"

Time back 4 years, the outside world may not have thought that Sri Lanka will come to this point today.

In 2018, Sri Lanka performed impressively as a dynamic emerging economy in South Asia. The country's gross domestic product (GDP) per capita is about $4,100, and indicators of employment and bank robustness are also remarkable.

"In the face of turbulence in the world economy, Sri Lanka should have been prepared from last year, and some problems can be avoided in advance." Zeng Xiangyu told Southern Weekend reporters that Sri Lanka belongs to the "tightrope walking", this time did not go over, "the government has a fluke mentality."

Sri Lanka announced in April 2021 a ban on the import of fertilizers, pesticides, herbicides and fungicides in a bid to reduce foreign exchange outflows and implement organic farming.

However, the ban led to a massive agricultural crop failure in Sri Lanka, which forced high prices to buy grain from abroad to replenish reserves, which only exacerbated the foreign exchange shortage.

Since 2022, people have taken to the streets to protest, which led to the forced ouster of then-Prime Minister Mahinda Rajapaksa in May. A few days later, prime minister Vikramasingha was also finance minister and led Sri Lanka's bailout negotiations with the International Monetary Fund. But the change of prime minister has not reversed the situation.

Angry demonstrators, who occupied the presidential residence, the presidential office area and the Prime Minister's Office, jumped into the swimming pool of the presidential palace to swim and burned the Prime Minister's Palace to vent their discontent. Protesters also clashed with police, injuring at least 55 people.

Zeng Xiangyu believes that the large-scale protests have both external reasons for the profound evolution of the international situation and internal factors for the improper administration of Gotabaya Rajapaksa.

In fact, since ascending to the presidency in 2019, Rajapaksa has had a clear political advantage. He himself had the historical merit and prestige to end the civil war. In the 2020 parliamentary elections, his People's Front party won nearly two-thirds of the parliamentary seats by an absolute margin, and infrastructure projects to revitalize tourism are also advancing, waiting for the "opening of the door". But political advantage ultimately failed to translate into governance effectiveness in a timely manner.

Improper economic decision-making and slow adjustments have also exacerbated the crisis.

After taking power in 2019, the Rajapaksa government implemented massive tax cuts that cost the country more than $1.4 billion a year in lost revenue. Another controversial policy is an attempt to ban the import of fertilizers, which has forced Sri Lanka to spend money on food from overseas as the rice harvest fails in 2021. In November 2021, although the fertilizer ban was lifted, it has had an irreparable impact on the production of grain, tea and rubber.

Gao Gang believes that under the situation of the epidemic and the conflict between Russia and Ukraine, sri Lanka will find it difficult to rely on its own strength to get out of the predicament. After the current president steps down, the country needs relatively broad political leaders to take charge, form a new government, put domestic protests on hold and negotiate a possible debt restructuring with major creditors.

From the perspective of economic structure, Sri Lanka is dominated by agriculture (fisheries), primary processing industry, and general service industries, and has limited room for maneuvering in the face of economic storms, and is very dependent on the external market. And when risks open up, the accumulated debt often becomes the "last straw" that crushes the country.

At the beginning of this year, Sri Lanka was caught in the predicament of insufficient foreign exchange reserves due to excessive external debt. In April, Sri Lanka's $78 million (about 520 million yuan) of external debt matured.

On May 18, Sri Lanka's central bank governor Vila Singh admitted that the country had defaulted on sovereign debt. Accumulated, Sri Lanka owes about $51 billion in external debt.

Although the Sri Lankan government tried to blame the cause of the economic crisis on "natural disasters", many experts and scholars interviewed told Southern Weekend that Sri Lanka was already facing complex and profound foreign debt problems, and improper government policies and economic mismanagement were the main reasons for the outbreak of the crisis.

"Debt restructuring requires a relatively acceptable solution from multiple parties." Gao Gang believes that with the support of this feasible plan, all parties will help Sri Lanka solve its economic difficulties. "The first is political stability, and the second is to alleviate economic problems."

How hard is "rebuilding"?

At present, Sri Lanka is also "self-help" in many ways.

According to The New York Times, India has provided $4 billion in loans to Sri Lanka. However, these aid loans have been depleted by Sri Lanka in recent months.

At the same time, Sri Lanka is also seeking help from countries around the world. The government sent delegations to countries around the world looking for any institution that might help, including charities in Qatar.

Sri Lanka has also approached Russia to buy fuel in the form of a line of credit. In addition, in May this year, Sri Lanka purchased 90,000 tons of Siberian crude oil from Russia through a Dubai-based intermediary company.

The international community is also constantly extending a "helping hand" to Sri Lanka.

On June 30, 2022, Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press conference that on June 28, the first batch of grain from Sri Lanka, 1,000 tons of rice, china's emergency humanitarian assistance, arrived at the Colombo International Container Terminal. Between April and May this year, the Chinese government announced that it would provide Sri Lanka with a total of 500 million yuan in emergency humanitarian assistance.

U.S. Secretary of State Blinken said publicly on July 10 that the United States was closely following developments in Sri Lanka, urging the country's political leaders to quickly "identify and implement a solution." The U.S. side said it would provide $120 million in funding to small and medium-sized enterprises in Sri Lanka, especially $5.75 million in humanitarian assistance to those who have been hit hardest by the economic crisis.

However, many public opinions believe that the funds that Sri Lanka can currently obtain are far from the amount needed for the country to maintain its operation in the next 6 months. Looking to the future, Sri Lanka looks like the road ahead.

(Yang Chengyu, Wan Rongrong, kong Fanjie also contributed to this article)

Southern Weekend reporter Wang Yaolin Southern Weekend intern Zeng Yue Xin Tengxuan