Crisis in Sri Lanka

Sri Lanka is facing an economic crisis with long queues in front of petrol stations, steep rise in prices of essential commodities and frequent blackouts. Although the COVID-19 pandemic precipitated a crisis of trade imbalance, the fundamentals of the Sri Lankan economy have always had serious issues. Debt, both domestic and foreign, has been a major problem. Even in February 2020, hardly a few months after Gotabaya Rajapaksa assumed office as President, his elder brother and Prime Minister Mahinda Rajapaksa, during his visit to New Delhi, wanted India to reschedule the loan. Over the last three months, India has provided assistance of $2.4 billion including a $500 million loan deferment and $1 billion credit line to enable the supply of essential commodities. Apart from approaching Beijing, Colombo has also sought help from the International Monetary Fund, shedding its earlier reservation of taking help from the agency. As soon as the shortage of certain essential commodities ends, which the government expects before the start of the Sinhala-Tamil New Year (which falls in the middle of April), steps should be taken for economic recovery. Compulsions of electoral politics should not come in the way of tough measures such as restructuring the administration of concessions and subsidies. Mr. Gotabaya Rajapaksa should also use the scheduled meeting with the Tamil political leadership to create a road map on the issue of political devolution and economic development of the war-affected northern and eastern provinces, among the areas badly hit by the current crisis.

Perhaps, Tamil Nadu has already started feeling the impact of the crisis with the reported arrival of 16 persons from Sri Lanka, including six women and seven children, through illegal means. Tamil Nadu was home to nearly three lakh refugees after the anti-Tamil pogrom of 1983. Regardless of the motive of those who have reached Tamil Nadu clandestinely, the authorities, both in India and Sri Lanka, should ensure that the present crisis is not used to step up smuggling activities and trafficking or whip up emotions in both countries. On the contrary, the crisis should be used as an opportunity for New Delhi and Colombo to thrash out a solution to the Palk Bay fisheries dispute, a longstanding irritant in bilateral ties.

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Printable version | Mar 25, 2022 1:33:19 am | https://www.thehindu.com/opinion/editorial/crisis-in-sri-lanka-the-hindu-editorial-on-the-economic-crisis/article65256846.ece