Global lenders will prescribe stringent measures placing the island nation at the mercy of creditors
A demonstrator rinses his face with water after police fired tear gas to disperse university students and demonstrators protesting against the Sri Lankan government in Colombo on Aug. 30. (Photo: AFP)
Having fallen on hard times, Sri Lankans are adopting their own survival tactics, which are set to boomerang even in the short term. The bailout package from the International Monetary Fund (IMF) and the austerity measures that follow it will further put the entire nation at the mercy of creditors in the long term.
As Sri Lanka's economic crisis has increased, numerous women in the island nation have changed their professions to eke out a living. Women are better survivors compared to men.
Women in the textile industry who lost their jobs became sex workers to support their families, according to Stand-up Movement Lanka (SUML), a group that works among sex workers.
Before the debt crisis, many sex workers were living with their partners, but due to the hard times, partners left many of the women who were pregnant. So, the flesh trade in Lanka is not running on a good return.
The unprecedented crisis has put 22 million Sri Lankans in a tough situation with daily struggles to procure food, fuel and essential items. One report says they are compelled to cut down on food consumption to cope with the economic downturn.
"People in semi-urban and rural areas have resorted to homegrown produce to satiate hunger"
Across Sri Lanka, the desperate rush and queuing up for food and fuel is no longer visible, but international aid bodies say that a large number of people in the country are on the verge of starvation.
Cutting down on food intake has brought forth the issue of nutrition as food and fuel prices are accelerating. Department stores and food outlets do not witness serpentine queues any longer, because people do not have the money, forcing families to reduce the quantum of purchases.
People in semi-urban and rural areas have resorted to homegrown produce to satiate hunger, while their counterparts in towns are not lucky enough to cultivate.
The International Federation of Red Cross and Red Crescent Societies (IFRC) said that the country is experiencing its worst crisis as “around 6.7 million people are now in urgent need of humanitarian assistance.”
In a report on Aug 11, the IFRC observed that 2.4 million people are already living below the poverty line. They are selling their assets and are being forced to cut down on food.
In its July 6 report, the World Food Programme (WFP) noted that food inflation in the country is alarmingly high at 57.4 percent and increasing food prices have crippled the population’s ability to put nutritious food on the table.
Farmers are finding it beyond their means to realize the usual average harvest of about 2 million tonnes in a season"
In its latest report, the World Bank has said that Sri Lanka was ranked 5th with the highest food price inflation in the world, behind only Zimbabwe, Venezuela, and Turkey, while the Mediterranean nation of Lebanon leads the pack.
The WFP further observed that the majority of households are regularly employing food-based coping strategies such as eating less.
Workers in the tea plantations of Kandy and Nuwara Eliya are reported to be the worst affected. The WFP further observed that more people will turn to coping strategies as the crisis lingers on.
However, international aid is not forthcoming for Sri Lanka. For the July-December 2022 period, the WFP has to shell out $63 million to address hunger in Sri Lanka. However, it has managed to mobilize only $18.14 million so far with contributions by Australia, Japan, and New Zealand, according to its website.
As the country does not have enough forex reserves, the import-reliant nation is in no position to buy chemical fertilizers to boost agricultural production. So, the yield per hectare has dropped, and farmers are finding it beyond their means to realize the usual average harvest of about 2 million tonnes in a season.
Due to the bad season, this year till July, Sri Lanka had to buy about 150,000 tonnes of rice thrice with its precious foreign exchange.
"Triggered by the acute shortage of foreign exchange, the government has slapped a ban on the import of 300 items like chocolate, perfume, and shampoo"
Some say China lured Sri Lanka into the debt trap, others say ill-timed social and corporate governance took the wind out of Sri Lanka's economic sail, but everyone blames the Rajapaksas, the political dynasty that ruled the nation until massive protests chased them out last month.
In mid-April, Sri Lanka defaulted on paying its foreign debt, which is pegged at $51 billion and the cash-starved nation has to pay $28 billion by 2027.
Japan and China are the largest holders of bilateral debt, which is $9.6 billion and China accounts for about $3.5 billion.
Triggered by the acute shortage of foreign exchange, the government has slapped a ban on the import of 300 items like chocolate, perfume, and shampoo. The ban came into effect on Aug 23.
The government was holding talks with an IMF delegation to finalize a bailout package including restructuring debt of about $29 billion. The delegation were to be in Colombo till Aug 31.
The IMF has extended loans to Sri Lanka 16 times, always with stringent conditions attached to them. This time, the austerity measures to be prescribed by the Washington-based lender on the hapless Sri Lankans are going to be serious.
Once the bailout package is ready, Sri Lankans will have to invent fresh survival tactics to stay afloat.
*The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.
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