Sri Lanka president, PM to resign after tumultuous protests

Gotta admit that I did not see this coming. Did not expect Rajapaksa to resign as President.

The crisis is much worse than it seems to be from the outside.

Now that the Lankans have rid themselves of Rajapaksa, they should unite and have patience while the new government (in whatever from that may be) negotiates with IMF.

But easier said than done because that will take months and people are suffering right now.

An entirely predictable failure by environmental radicals and corrupt politicians. Now the entire country is starving. Coming soon to a country near you.

https://foreignpolicy.com/2022/03/05/sri-lanka-organic-farming-crisis/

"Last April, Rajapaksa’s government made good on that promise, imposing a nationwide ban on the importation and use of synthetic fertilizers and pesticides and ordering the country’s 2 million farmers to go organic.

The result was brutal and swift. Against claims that organic methods can produce comparable yields to conventional farming, domestic rice production fell 20 percent in just the first six months. Sri Lanka, long self-sufficient in rice production, has been forced to import $450 million worth of rice even as domestic prices for this staple of the national diet surged by around 50 percent. The ban also devastated the nation’s tea crop, its primary export and source of foreign exchange"

cont'd

Human costs have been even greater. Prior to the pandemic’s outbreak, the country had proudly achieved upper-middle-income status. Today, half a million people have sunk back into poverty. Soaring inflation and a rapidly depreciating currency have forced Sri Lankans to cut down on food and fuel purchases as prices surge. The country’s economists have called on the government to default on its debt repayments to buy essential supplies for its people.

The farrago of magical thinking, technocratic hubris, ideological delusion, self-dealing, and sheer shortsightedness that produced the crisis in Sri Lanka implicates both the country’s political leadership and advocates of so-called sustainable agriculture: the former for seizing on the organic agriculture pledge as a shortsighted measure to slash fertilizer subsidies and imports and the latter for suggesting that such a transformation of the nation’s agricultural sector could ever possibly succeed.

shocking videos of thousands storming the Presidential Palace and the President himself fleeing on military ship, suitcase in hand.

I can think of a few other countries where similar scenes may play out...

If only that could happen back home.

Maybe they can ask the Chinese to bail them out as they were so keen to get a 99 year lease on a deep water port just off India's coast?

I am an environmental radical and if you knew the poisons that are being put on your food you would be too.. This instant nationwide ban was stupid and the transition to organic should have been done in stages over a few years but let's stick with the corrupt politicians and companies like Monsanto, Bayer, and Dow who are forcing dangerous chemicals into our bodies for their profits. Women in so-called developed countries now have over 200 synthetic chemicals in their breast milk--more than 40 of which are still being studied for the carcinogenic impact on the mother's and baby's health..

I am an environmental radical

I stopped reading after this introduction.

Owen Benjamin points out that unlike the fake January 6th narrative, what’s happening in Sri Lanka right now is a real insurrection:

Sri Lanka’s economy has collapsed. This is what an actual January 6th looks like not the fake one that America scripted. The IMF won’t bail them out either. 80% of the population currently can’t get daily meals. They had a middle class last year. This was the country that known pedophile, science fiction author, and inventor of frauds like the satellite, Arthur C Clark fled to to avoid arrest and openly live with young boys. The country has been morally broken for a long time. But now it’s financially broken. They also just ran out of all fossil fuels and no one will ship them any because their money is worthless. Imagine currently being on that island? And the news isn’t reporting it because it scares them. This is never far from any country functioning on a fiat currency. And no Bitcoin is not a solution, as Canada will tell you. Yesterday all of their digital banking shut down for a full day.

The collapse of the global economy has evidently begun. Stay out of debt, focus on purchasing material things that last rather than digital ephemera, build your arsenals and libraries, and get out of the cities. If you’re not married, get married. If you’re married, start having children.

Remember: the future belongs to those who show up for it and the strongest businesses are those that are founded during depressions and times of war.

It doesn't sound good at all. Calling the vulture called IMF will only

increase the pain and anguish of the Sri Lanka people.

The crux of the problem in Sri Lanka are government subsidies on food and fuel. In a normal market economy firms buy products to sell with the funds earned from previous sales. They do not have to worry about how much foreign exchange their government may or may not have on hand. They are paying for goods with their own money, knowing they may recoup their costs plus a little profit by the income earned from the sales of their products at market driven prices.

In Sri Lanka the prices charged for food and fuel are set by the government. The government has to buy these from abroad using foreign exchanged earned from the sale of tea and from tourism. Local merchants buy these goods from the government at artificially low subsidized prices and then sell them to the public at artificially low prices set by the government.

The real cure is to let sellers set their price at market rates and let them buy directly from suppliers abroad with the money earned from their sales at market prices. Then the lack of foreign exchange owned by their government doesn't affect their business.

The collapse of the global economy has evidently begun.

I have been hearing this same tripe for all of my adult life, and I am at retirement age, though I have no immediate plans to retire yet. Based on books on my bookshelf the US should have been eclipsed economically by Japan (not China but Japan, China wasn't even on the radar in the 1980s when these books were written) no later than the early 1990s as many economic knowitalls were absolutely convinced the US days as the leading nation were finished. Japan supposedly had superior technology and a superior workforce. They had Kaizen! Are you old enough to remember that? Sages have been saying stuff like this predicting the end for decades. It is only in hindsight that we see just how ridiculous their claims were.

The current disruptions to supply chains that are driving prices up are temporary. Container shipping prices are falling right now. Shipping companies went on a spending binge ordering new mega container ships. The yards the build them are booked solid with orders. But with shipping prices falling I will bet more than a cold beer that in two years there will be a surplus of container ships, relatively new ships will be heading to the breakers to be scrapped and ships that sail will sail at less than capacity as container rates crash to their pre-pandemic levels. Oil prices are also falling. The pandemic and the Russian invasion of Ukraine stirred the pot and disrupted supply chains all over the world, exacerbated by China closing ports wholesale for weeks on end, backing ships up all across the globe. That won't go on forever. Companies are adjusting and logistics costs are falling. Consumer prices will follow in time.

Nemo:

Maybe they can ask the Chinese to bail them out as they were so keen to get a 99 year lease on a deep water port just off India's coast?

I hope you're not suggesting that other countries didn't try to get a lease on that port? Fun fact: before China got there, Canada tried to do the same but their plans went south. Had they succeeded, I doubt whether you'd be sitting here complaining how Canada is taking over the world. More fun facts:

Sri Lanka's foreign debt:

47% Market borrowings

13% Asian Development Bank

10% China

10% Japan

9% World Bank

2% India

9% Other

China is only 10%, same as Japan!!!! But it's always China bad bad bad.

By the way, Asian Development Bank is mainly western institutions and Japan.

People power of my Sri Lankans. We must now reclaim the money stolen from the people by the Rajapaksa family.

@Pukey2

Because Japan's 10% is trying to help Sri Lanka. China's 10% is trying destroy the country. Just look at the picture and see what China has done.

http://www.erd.gov.lk/index.php?option=com_content&view=article&id=102&Itemid=308&lang=en

When you take out a loan promising to pay monthly payments and then you lose your job and your aged mother falls ill and hospital bills keep piling up and your son suddenly rakes up college tuition bills, you can't really blame the banks. Sri Lanka can't blame China or Japan or ADB.

Back when SL was signing all these deals- SL was making $ 16 Billion a year in tourism revenue with nearly 60% of their Tourists coming from China.

The Loans were entirely suspended by China, Japan and India from 2020–2022 - so Sri Lanka has not paid ay interest to any of the above countries.

quercetum:

You need to be educated by western sources:

https://www.youtube.com/watch?v=U52tT5hgtSk