The country, which has suffered its worst economic crisis since independence in 1948, is facing shortages of petrol, gas, medicine and food. But despite the challenges, the president is still in power.
Night has just fallen in Colombo, but the queues are getting longer. Hundreds of vehicles line the center of the Sri Lankan capital: taxis, scooters, small private cars or shiny German sedans. All social classes are thus united in the daily struggle of Sri Lankans: to get petrol.
With the roar of a diesel engine, Vajira Kumar’s white truck finally arrives at the pump. “I spend my days in these rows, blowing up this newspaper supplier, his eyes go dark under his gray hair. When I finally got the fuel, I left to deliver by 8am. Then I come back to the lineup. I used to do other things in the past, now it is not possible. He did not finish his sentence when a fight broke out at a nearby pump, where the best quality petrol was stored. Tuk-tuk, Just finished. One driver, angry, accused the manager of selling 20,000 rupees (ক 72 Canadian dollars) of petrol to the driver of a large car, more than double the maximum allowed. The manager denies it, but takes refuge in a corner of the station during the interrogation, next to the owner of a white Audi and his friend, two women wearing jewelry. They claim to be lined up and say they too are suffering from the crisis, in their own way: “When we meet friends, we now have to share the same car to save gas,” says Anita with a nervous smile. And for the first time, I was denied a visa to go to Europe. A
Sri Lanka entered the worst economic crisis since its independence in 1948 from the beginning of the year, with the cascading deficit and poverty of this emerging Asian country of 22 million inhabitants. The catastrophic combination and the catastrophic decision saving result: the attack on the churches in April 2019, followed by the COVID-19 epidemic, made the tourists disappear. The sector, which contributed 5.6% to GDP in 2018, is expected to decline to 0.8% in 2020. This has dried up an essential source of foreign exchange, and made it more difficult to repay the heavily indebted debt, mainly to Japan and China.
In December 2019, the new president, Gotabaya Rajapaksa, aggravated the situation by cutting taxes: the VAT rate has been halved, the level of income tax payments has dropped from 500,000 to 3 million rupees per year (15,000 euros at that time), resulting in an estimated 2% of GDP. There would be losses and the state treasury would be emptied. Sri Lankans, who enjoy twice as much per capita income as their Indian neighbors, saw their purchasing power decline: In March, the central bank began devaluing the rupee to encourage foreign investment and send remittances from expatriates to a cheaper country. This makes imports of essential commodities such as milk, wheat or oil more expensive, as well as foreign debt of 49 billion euros (66 66 billion).
“The hardest thing is the chicken.”
The government will not be able to repay its first loan at the end of May. For the first time in its history, Sri Lanka is in default, and the government no longer knows how to get out of it. “It simply came to our notice then. One day, we woke up and we couldn’t buy anything, “said Malthi Arulkumar, a 42-year-old housewife who lives in a small house in the popular Wanathamulla district of Colombo. In two months, the rupee has lost 80% of its value, and his family, who earn 50,000 rupees (241 Canadian dollars) a month, are feeling it, as most prices have doubled. So the family ration: “We can no longer buy powdered milk, cheese, cakes, and I can buy half vegetables and rice,” she explains, with tears in her eyes. The hardest thing is the chicken: we ate it regularly, and my kids ask for it. So I bought some exceptions, and I left them. In her compact kitchen, she shows us, embarrassed, three skinny chicken wings she’s about to prepare in a large pan.
You still have to be able to cook: the price of a 12.5kg gas cylinder used by most households has quadrupled in eight months, and it’s hard to find. In the next neighborhood, 62-year-old Mohammad Amuruddin waited five days outside a shop to refill his blue gas cylinder, but the curtain was drawn. And he’s not the only one waiting: beside him, a hundred canisters lined the sidewalk. To protect them from being stolen, they are chained, locked, and numbered. “We all have to pay someone to see them overnight,” he added. And at this point, we have to cook on the wood fire, or eat out, for which we have to pay a lot of price. One woman admitted that in order to save money, she stopped sending her children to school, so she did not have to pay for snacks or pencils.
This daily struggle, “Aragalaya” in Sinhala, has become even more important in recent weeks, as medicine has begun to run out. A 72-year-old white-haired man waits in the oncology ward of Apexa Hospital, east of Colombo. “It’s been two weeks since my wife was diagnosed with lung cancer,” he said. But we could not start the treatment because we did not have the necessary medicine. Apparently they have just arrived. India, a strong supporter of the country, has offered 3.3 billion euros ($ 4.4 billion) in credit as well as a plethora of drugs this year, but according to the Association of Public Health Professionals, there are fourteen important drugs needed to treat heart disease. Vaccines against problems, respiratory failure, cancer, or rabies, are still missing in recent days. Surgeon Bhasan Ratnasingam, a spokesman for the association, warned, “We have not recorded any deaths due to this shortage, but it will happen if they continue.” The United Nations echoed the warning on June 9, urging the international community to provide emergency humanitarian assistance worth 44 million euros ($ 59 million): .
“I have to leave the country”
Those facing this generalized poverty may leave the country. The Foreign Ministry is mingling with young Sri Lankans in a hurry to get a passport or certify their diploma. Thamal Rukhsa barely comes out, a little stunned. “I never imagined I would be living abroad,” said the 25-year-old civil engineer, who got a job in Dubai. But because of the crisis I have lost my job here. We are working on a public building project, but the state can no longer pay us. So I have no choice: I have to leave the country. A
At least 100,000 Sri Lankans went to work abroad between January and April, twice as fast as last year. And they are much more educated than before. “We are suffering from a brain drain,” admits Sujeeb Razakulendran, CEO of the company Esshva, which provides outsourced IT services. He has been trying for two months to recruit thirty young engineers, but has only found one, who is leaving for the UK on his own in December. The new technology sector employed 120,000 people last year and represented the fifth largest export item, bringing the currency to the country in demand these days. But in the face of economic instability and manpower shortages, companies are considering opening subsidiaries in India or the Philippines to facilitate growth.
From the slums to the Posh Club in Colombo, the vast majority of Sri Lankans are now demanding one thing: the departure of President Gotabhaya Rajapaksa, responsible for the crisis. In the bay, in front of the presidency’s office, is the center of protests since April 9, for the large camp “Gota Go” – “Gotabaya must leave” – still with hundreds of residents and hundreds more demonstrating regularly in the vicinity. “In a company, if a CEO can no longer pay his employees and sends them to beg, he is fired, an entrepreneur protests at a parade. We need to get these people out and change the system to restore investor confidence. The Rajapaksa dynasty, which until recently held the posts of president, prime minister and finance minister, has collapsed: the last two have left their posts, but the president still refuses to resign. The new prime minister, Ranil Wickremesinghe, is also in talks with the International Monetary Fund for a new loan, and an IMF team is expected in Colombo on June 20. The country needs 5.7 billion euros ($ 7.7 million) to stay afloat for the next six months. A huge sum, even for agencies. This will not be Sri Lanka’s first loan from the IMF, but certainly the largest loan in its history.