Sri Lanka-A Cautionary Tale

Sri Lanka is an island nation of 22 million people located just off of the southeastern area of India.

It is colored in green in the map below.

 

It was previously known as Ceylon before the name was changed to Sri Lanka in 1972.

Right now Sri Lanka is a cautionary tale of what can happen to a nation when you have too much political corruption, too much debt, too much inflation, not enough foreign reserves, not enough energy, not enough food production and your government is overly enamored with currying favor with Western green globalist elites by following an ESG (Environmental, Social, Governance) agenda.

Sri Lanka was given a near-perfect ESG emissions score of 98 recently. That is higher than even Sweden's 96. The United States score is 59.

However, being environmentally green and socially responsible does little to help people when they have life to live. and they can't live it.

Haven't we human been here before? 

As I have mentioned in these pages before, people get a little testy when they have no energy and no food.

That is what has occurred in Sri Lanka in recent days.

The people had enough and rose up in a real insurrection.

Protestors stormed the President's mansion and caused him to flee the country this weekend.

By the end, they were swimming in the President's pool.

The protestors also set the Prime Minister's house on fire. He had only been in office one month.

How did Sri Lanka get here?

Years of political turmoil and corruption.

Too much debt and foreign borrowings.

A heavy reliance on imports.

Covid exacerbated problems in the local economy which resulted in taking on more debt.

The Sri Lanka Central Bank printed a lot of new currency in the last three years.

Does any of this sound familiar?

Foreign reserves were quickly dissipated for imported goods making it harder and harder to buy essential imports like fuel.

Prices of fuel and other essentials started rising.

The ESG crowd convinced the government to ban imported chemical fertilizers and required farmers to farm organically. Crop yields plummeted over two consecutive growing seasons. 

The argument was that it would help the foreign reserve situation and also be environmentally smart.

However, one oberver points to that decision as the most critical error Sri Lanka made.

But the biggest and main problem causing Sri Lanka’s fall was its ban on chemical fertilizers in April 2021. Many other developing nations had to deal with similar challenges, including covid and high foreign debt, but have not collapsed. The bottom line is this: over 90% of Sri Lanka’s farmers had used chemical fertilizers before they were banned. After they were banned, an astonishing 85% experienced crop losses.

The numbers are shocking. After the fertilizer ban, rice production fell 20% and prices skyrocketed 50 percent in just six months. Sri Lanka had to import $450 million worth of rice despite having been self-sufficient in the grain just months earlier. The price of carrots and tomatoes rose five-fold. Tea, the nation’s main export, Domestic rice production fell by 14 per cent from 2021 to 2022, thereby undermining the nation’s foreign currency and ability to purchase products from abroad.

While there are 2 million farmers in Sri Lanka, 70% of the nation’s 22 million people are directly or indirectly dependent on farming. “We are furious!” said one rice farmer in May. “Angry! Not just me - but all the farmers who cultivated here are angry.”

In November 2021, Sri Lanka tried to reverse course, but it was too late. Rajapaksa said, “we don’t have enough chemical fertilizers in the country because we didn’t import them. There is a shortage.” By the end of last August, President Gotabaya Rajapaksa had declared a state of emergency.

What, exactly, were Sri Lanka’s leaders thinking? Why did they engage in such a radical experiment?

With food in short supply, inflation rose even higher if you could get the food at all.

When you have little energy, little food, you have printed a lot of money and the music starts slowing down this is what you get.

Two weeks ago the Prime Minister admitted that Sri Lanka's economy had completely collapsed.

Source: https://www.washingtonpost.com/world/2022/06/23/sri-lanka-economy-collapse/

What good is that ESG score of 98 worth right now?

Is it any wonder that people took to the streets and are in the Presidential Palace pool doing the backstroke?

How many times might this scenario play out around the world in the coming months?

Look around and see what is already going on in countries like Panama, Albania not to mention the farming protest in the Netherlands right now.

Source: https://theconservativetreehouse.com/blog/2022/07/10/if-they-lose-you-will-eat-bugs-dutch-farmer-spokesperson-explains-how-eu-climate-change-goals-will-reduce-farm-production/

Sri Lanka should be a cautionary tale to everyone in the world right now.