By Taimoor Ahmad Chaudry
In Sri Lanka, a tropical island nation just a few miles southeast of India, children never face a snow day. Neither do they have to contend with earthquakes nor sandstorms.
However, a new type of catastrophe now faces three million of its students because their schools seem unable to pay for ink and paper. Its largest province’s education administration announced on March 19 that all examinations for grades 9, 10, and 11 will be canceled for the very same reason. However, paper is the least of its concerns, as entire cities grind, to a dangerous and unprecedented halt.
Prices for necessities have doubled, quadrupled, and kept rising, including everything from food to fuel to medicine. That, combined with power outages lasting up to 15 hours a day, has Christians, Hindus, Muslims, and Buddhists, who just 10 years ago fought each other in a Civil War, all joined forces on the streets in protests. Tragically, the worst is presumably still to come. The present 15-20 hours of electricity and exorbitantly expensive groceries may eventually be viewed as the “good days” as the last of the supplies run out. Even the armed forces have been ordered to help farmers due to the severe food crisis. Three interrelated problems are having an impact on Sri Lanka currently. There just isn’t enough rice, paper, or fuel since the government has emptied dollar reserves, making it impossible to keep up with demand for imports. Second, people’s funds are suddenly worth a lot less than they did the day before. Years of laborious work vanished abruptly. Third, as the rupee is in rapid decline, no certainty exists about the exact “bottom”. To see the pattern, one doesn’t need to be an expert
However, experts warn that Sri Lanka is only the tip of the iceberg. Despite being a unique nation, many of its present issues have much too universal of a foundation. Sri Lanka, in other words, may simply be the first domino to fall this year. And understanding how it got here — unable to afford even paper — may offer a preview of what comes next. Without immediate international action, UN Secretary-General António Guterres warned on May 18 of “the threat of a worldwide food scarcity in the coming months.” and linger for years. According to U.N. estimates, global food costs increased by about a third in the last year, fertilizer prices increased by more than half, and oil prices increased by nearly a two-thirds. Owing to the increasing cost of basic provisions, the number of individuals who are doubtful whether they will have enough to eat has surpassed 1.6 billion. Hundreds of millions, if not billions more people might become impoverished if, as is expected, the war continues and supplies from Russia and Ukraine remain scarce. People will be famished, children will be severely malnourished, and political turmoil will worsen.
One can observe the cost and, more crucially, the volatility of wheat and maize, which, respectively, Russia and Ukraine produce 28 and 15 percent of the world’s supply. 400 million people were once nourished by just Ukrainian exports. Some nations obtain almost all of their wheat from either one or both. Just these locations get at least 80% of their wheat from Russia and Ukraine. In addition, Russia provides 15% of the world’s fertilizer as well as, more significantly, the fuel required to produce fertilizer. You probably don’t need to be warned that oil prices are off the charts if you drive a car and reside on Earth. Following Russia’s invasion of Ukraine, the price of wheat increased drastically. Grain and oilseed shipments from Ukraine have mostly ceased, and those from Russia are under risk. Together, the two nations provide 12% of the exchanged calories. Wheat prices, already up 55% since the beginning of the year, increased by 6% on May 16 when India announced it would halt shipments due to an extreme heat wave. Hundreds of millions more people might become impoverished if, as is expected, the war continues and supplies from Russia and Ukraine remain scarce. People will be famined, children stunted, and political turmoil will increase worldwide.
Several nations have already banned food exports or will do so in response, further exacerbating the situation for net importers like Sri Lanka. Commonly, organizations like the IMF and World Bank step in to solve the crisis like 2016, where Sri Lanka Sri Lanka last received a $1.6 billion bail-out from the IMF. But this time is different. Bail-outs are conditional on things like having a functional government and implementing often unpopular economic policies. The IMF doesn’t just write checks on a whim — it wants to know that the country won’t end up in the same situation 6 months later. These are conditions Sri Lanka simply can’t meet. While citizens are very justifiably angry at their government, the unfortunate truth is that political turmoil and social unrest will likely only discourage foreign assistance. Protestors are right that the country’s economic woes didn’t come from nowhere. The groundwork for the current crisis can be traced back decades when The World Bank had equated Sri Lanka’s practice of settling old loans with new ones to a “Pyramid Scheme”
Its leaders have been pursuing disastrous policies for years before any of the recent events. In 2019, it cut taxes precisely when it needed public revenue the most. Poor governance is not the only but it is an important ingredient to the cocktail of calamities it’s dealing with now. What’s surprising is not Sri Lanka’s poor leadership, but how quickly it all unraveled. In a matter of weeks, millions of Sri Lankans went from living a fairly middle-class lifestyle, cars, college education, and leisure to wondering whether they can eat dinner. This is how countries spiral out of control. A shock, or, in this case, a trifecta of shocks, exposes a nation’s weak governance. The severity of the situation can only increase from there.
It’s easy to connect the dots between an unprecedented global pandemic, global supply chain issues, fuel crisis and a sudden economic collapse. One can observe the last 15 years of agriculture, commodity, and grain prices. While high prices don’t guarantee social unrest, they tend to correlate and further exacerbate the situation. Take the Arab Spring for example. Debt repayment is financially infeasible for developing nations. This forces them to decide between paying off their debt and using their limited resources to save lives at home. Put simply: a global pandemic, a change in interest rates, and the largest armed conflict in Europe since the Cold War, would each, by themselves, be hugely significant. But all three at the same time? That’s why the UN calls this a “perfect storm”. The Russo-Ukraine war alone is expected to decrease global GDP growth by 1% this year.
Food Security is National Security. All of this portends a global food crisis and perhaps a famine. For which other country or countries will the confluence of the pandemic, financial tightening, and a drastic increase in commodity prices soon expose a weak foundation? What for the privileged world will be an inconvenience, high gas prices, inefficient supply chains, and, possibly, even recession, will, for the developing world, mean the undoing of decades worth of progress in healthcare, education, and general prosperity. Some experts are pointing to Pakistan, whose currency is currently in rapid decline, as a possible next domino to fall. This domino, however, is nuclear. Lebanon has been experiencing an economic crisis for more than a year. Yemen also continues to be one of the most severe humanitarian crises in the world with approximately 13 million children among the 23.7 million people in need of aid. What for the privileged world will be an inconvenience, high gas prices, inefficient supply chains, and, possibly, even recession, for the developing world, mean the undoing of decades worth of progress in healthcare, education, and general prosperity. It’s important to humanize what is, ultimately, statistics on a graph as what’s occurring in Sri Lanka is devastating, evident, and all too real.
Taimoor Ahmad Chaudry – Independent International Security and Global Affairs Analyst. He Holds BS Computer Science academic Credential with particular research direction of Artificial Intelligence and Modern Warfare & Global Security.
(The views expressed in this article belong only to the author and do not necessarily reflect the views of World Geostrategic Insights).