On August 31, the Sri Lankan government announced a state of economic emergency thanks to a sharp decline in the country’s currency value and a food crisis.
Long lines have queued at stores to purchase kerosene and cooking oil, among other essential goods. Reports by Indian Express suggest that Sri Lankans are buying food in the black market under worsening conditions.
President Gotabaya Rajapaksa appointed a commissioner of essential services to seize large stocks of essential food items that are being hoarded by traders, including rice and sugar, and to regulate prices for such items.
Still, the government has denied reports of a food shortage.
“Certain local and foreign media are carrying out media stories that there is a food shortage in the country,” the Sri Lanka director of information said September 2. “There is no basis to these reports.”
But based on the government’s own actions, that is misleading.
The statement added that the emergency measures, such as seizures of staples, were being taken simply to prevent traders from hoarding essentials. But there is more to the long food lines and high prices than just that.
A currency crisis and a global price hike – triggered by the COVID-19 pandemic – are major contributors. Sri Lanka’s private banks do not have sufficient foreign exchange to pay for imports, which the island nation relies on for many food items, fuel and other essentials.
Sri Lanka’s economy shrank by a record 3.6% last year under stress of the pandemic on tourism, which accounts for about 10 percent of the economy.
In response, according to the Indian news website Firstpost, Sri Lanka’s government banned the import of vehicles and other items, including edible oils and turmeric, an important spice in local cooking, to protect the rupee.
Sri Lanka’s central bank also raised interest rates in August, a move that helped push prices even higher. The government is setting prices for milk, rice and other goods seized under the emergency declaration.
Still, a 62-year-old man in the capital city, Colombo, expressed anxiety about being able to feed his family given scarce milk and sugar.
“ ‘There are small children in my family, we need about six kilos of sugar a month,’ ” the man said, according to Agence France-Presse.
The German public news service Deutsche Welle reported:
“Importers are no longer able to access the foreign currency they need to buy products from other countries — including food and medicine.
“As a result, many hospitals are struggling to buy essential drugs and equipment they need to treat patients, including those suffering from COVID-19, at a time when the country of 21 million is in the midst of another brutal wave of infections, killing over 200 people a day.
“In addition, Sri Lanka depends upon imports for gas and petrol, so an energy crisis may be lurking just around the corner. The government has asked people to use fuel sparingly and warned that it could be rationed.”
As part of an initiative to switch the country completely over to organic farming, President Rajapaksa banned chemical fertilizers earlier this year. However, the organic farming push is also having an adverse impact on Sri Lanka’s faltering economy and on food availability.
According to growers, crops, including staples like rice and pepper, could fail as early as October.
Rajapaksa took office in 2019 promising to subsidize foreign fertilizer, but he subsequently backtracked.
Al Jazeera quoted a grower saying he feared that the “average annual crop of 300 million kg (660 million pounds) will be slashed by half unless the government changes course.”
Farmers and vegetable growers have been staging protests over the fertilizer shortage. Meantime, Sri Lanka is under a 16-day lockdown following an unprecedented surge in COVID-19 cases that has tourism slumping.