Sri Lanka declares emergency over food, forex crisis

ANKARA

Amid a hard-hitting economic crisis and worsening COVID-19 situation, Sri Lanka has declared a food emergency to deter hoarding and stabilize prices of essential items.

President Gotabaya Rajapaksa issued an order this week and appointed a major general to “oversee food distribution” in the island nation, which is currently under its third coronavirus lockdown.

“Authorized officers will be able to take steps to provide essential food items at a concessionary rate to the public by purchasing stocks of essential food items including paddy, rice, and sugar,” read a statement issued by the presidential office on Monday night.

Sri Lanka is currently struggling to muster up enough foreign exchange to finance critical imports.

The country’s foreign reserves plummeted to $2.8 billion by the end of July from $7.5 billion in November 2019, and the Sri Lankan rupee has lost almost 20% against the US dollar since the economy contracted by a record 3.6% in 2020.

Udaya Gammanpila, the country’s energy minister, recently called on citizens to control their use of fuel.

“The reality is that we are in a foreign currency crisis… Please use fuel economically to save foreign currency for much-needed medicine & vaccines,” he said on Twitter last month.

The situation has led to soaring prices of basic goods such as onions, potatoes, sugar, and rice, with the government accusing retailers of hoarding supplies and jacking up prices.

“The objective of these regulations is to prevent the activities such as hiding, interrupting the distribution, charging high prices of especial food bulks including rice and sugar and causing market irregularities which cause inconvenience to the consumers and the welfare of the people,” the presidential office statement added.

To shore up reserves, the central bank has hiked up interest rates in recent days and the government has reached out to China, Bangladesh, and the International Monetary Fund for assistance.

- Persisting problems

A business graduate in Sri Lanka told Anadolu Agency that the country has been struggling with an economic slowdown since last year due to the pandemic.

“Dollar rates are rising almost on a daily basis. Prices of essentials are also increasing due to hoarding by businesses,” said the man, who wished to remain anonymous due to fear of reprisals.

“The hardest hit are daily wagers and street vendors. Even going door-to-door to sell their wares and offer their services is not working for them,” he added.

Amid the COVID-19 lockdown, which will remain in place at least until Sept. 6, Sri Lanka’s daily virus figures remain alarmingly high.

The death toll swelled by 194 on Tuesday and now stands at 9,185, while the overall case count is over 440,300.

Despite the worrying virus situation, Ajith Nivard Cabraal, Sri Lanka’s state minister of money and capital markets, has advocated for resuming economic activities.

“People can’t pay their loans, rents, leases, etc. That’s why people must call for the opportunity to work without a lockdown while following health protocols,” he said in a Twitter post last week.