With no fuel and no cash, Sri Lanka grinds to a halt(aljazeera.com)
aljazeera.com
With no fuel and no cash, Sri Lanka grinds to a halt
https://www.aljazeera.com/news/2022/7/4/with-no-fuel-and-no-cash-sri-lanka-grinds-to-a-halt
50 comments
Using informal channels for a sizeable part of the economy is not going to make the government less corrupt but more. Any gouvernement needs money to work, and that money is raised by taxes. If a huge part of money is not taxed, it will have 3 effects: 1/ the taxes will increase on the rest 2/ the unelected people controlling the informal channels will have a lot of power 3/ the government will not be able to works properly, meaning that corruption will be used more to compensate
I assumed it refers to the need for recipients to convert the foreign currency into local currency, thereby providing the national bank with that currency to use in international transactions. So it's not theft, it's supply and demand.
If they receive $600million USD from foreign remittances but have a fuel bill thats a billion USD, where are they going to get that extra currency from?
If they receive $600million USD from foreign remittances but have a fuel bill thats a billion USD, where are they going to get that extra currency from?
"It's supply and demand" is frequently code for "I'm coercing you, what are you going to do about it?" Classic example, when you ask why rent in town is so high, "it just supply and demand." Then one day you start seeing the same NIMBYs in the same objections to constructions, like "they tried building a cheaper home for me, and these NIMBYs objected, why" and it's shills for landlords, so not really that in love with "supply and demand" when it's not to their benefit.
That's not my experience with NIMBY coalitions. They're usually saying things like "more supply increases prices". I know it's a bit of a baptist-and-bootleggers dynamic, between self-interested homeowners and dumb but sympathetic activists. But the idea that undersupply contributes to high prices runs directly counter to NIMBY goals or strategy.
I talked to one NIMBY into becoming a YIMBY by telling her more construction--ultimately--brings down prices. Telling her about Santiago, people pay $100 rent here, no problem, and it's for basically the same thing, a lock on a door in a megacity, near public transport, an elevator, everything. Everything.
Just need to get the word out.
Just need to get the word out.
I'm only discussing the macroeconomic operation if foreign account balances and why the inflow of international currency is vital for most countries that have their own domestic currency.
If we want to discuss the role of speculators in a real estate bubble I'm happy to switch topics!
If we want to discuss the role of speculators in a real estate bubble I'm happy to switch topics!
We burned through all the money that you gave us before, so please send more.
Sincerely,
GovSri Lanka had the worst government possible. They are corrupt to the core who won elections because they capitalised on minority-majority conflicts first against Tamils and now against Muslims. Rajapaksas had a complete capture on the government which allowed them to both loot it and make stupid decisions.
For some perspective, Sri Lanka is about the same size and population as the greater Los Angeles area. I can't begin to imagine Los Angeles grinding to a halt with no fuel, intermittent electricity and many essentials in a precarious state. It would be chaos.
Sri Lankan's can live off the land and the sea. I asked one of them about the upcoming crisis. He showed me his very modest house on a relatively small plot of land and said: "See: there are coconut trees on my land. We will not starve."
He'd better be close to the sea-- there's this infamous coconut-only dieter who basically starved to death:
https://en.m.wikipedia.org/wiki/August_Engelhardt
https://en.m.wikipedia.org/wiki/August_Engelhardt
After 15 years...
This is a very naive view of how the food economy works. It's not some Edenic paradise where everyone maintains a homestead. It's an Asian country in 2022. There are plenty of people in the countryside; though it's questionable that they can automatically feed themselves off the land).
But 25% of the population lives in Colombo alone, in a population density double that of New York City's.
But 25% of the population lives in Colombo alone, in a population density double that of New York City's.
> I can't begin to imagine Los Angeles grinding to a halt with no fuel, intermittent electricity and many essentials in a precarious state.
I don’t know about LA but in the Bay Area we call this “fire season” and it happens every year towards the end of summer.
I don’t know about LA but in the Bay Area we call this “fire season” and it happens every year towards the end of summer.
I really don't understand all the hyperbole about California "fire season." Is it like other places where people develop their opinion about it through social media rather than actually being there outside?
I've lived in the Bay forever and was affected by being without electricity once. There have been maybe 10 actually smoky days in the past few years. People only seem to talk about it online. Definitely not much fretting over it or "grinding to a halt."
I've lived in the Bay forever and was affected by being without electricity once. There have been maybe 10 actually smoky days in the past few years. People only seem to talk about it online. Definitely not much fretting over it or "grinding to a halt."
I also live in the Bay Area (but in a rural area) and have experienced dozens of power outages over the past few years (some fire and some not). Plenty is smoky days.
I agree on the hyperbole on the internet, but your experience seems to be on the opposite end of the spectrum.
I agree on the hyperbole on the internet, but your experience seems to be on the opposite end of the spectrum.
It varies by area: in the hills, there have been several power shutoffs in the last few years. The big wildfires that PG&E got assigned liability for made them greatly widen the criteria they use to shut off power to prevent wildfires: Los Altos Hills claims it happens once or twice a year: https://www.losaltoshills.ca.gov/469/Public-Safety-Power-Shu...
After living in Solano county (That’s the bay as far as I checked) for 10 years and paying $500 a month for electricity to cool a 900 square foot house that would go out weekly between July and November, while repeatedly watching neighboring communities burn down due to ineffectual public services until I left for a more functional state with none of the same problems, yea, I think I’m pretty qualified to have an opinion.
With such a small house and that high of a cooling bill, why have you not invested in better insulation/more efficient air conditioning?
I tried to get a permission to work from Sri Lanka. I would have brought them taxes and currency. The officials could not understand what I was talking about. Some hanged up on me and some told that straight to my face.
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The only possible upside to this is that the poor Sri Lankans will breathe a little more easily for a while - I remember that the pollution in Colombo was pretty appalling (not that that's their fault). I really feel for them, as in my experience SL had some pretty drastic poverty in parts to begin with.
I'm aware of one more upside - ordinary poor Sri Lankans are starting to realize how disastrous racism and nationalism have been, and are starting to reject these ideas.
I recently saw a video where an agitator came up to a mob of mostly Sinhalese people (Sinhalese being the majority ethnic group) and said "The Muslims are coming after me with swords!" only to be told by the mob to take his racism and nationalism elsewhere. The current administration came to power on a racist and nationalistic platform, and it seems that racist and nationalist thinking is falling from grace right along with the ruling clan.
I couldn't find the video I mentioned above, so I am not able to cite it, but I can cite the following examples of more un-racist and un-nationalist behavior in Sri Lankans at present:
1. In the following article, you can see posters of murdered Tamil journalists (Tamil being the second biggest ethnic group in Sri Lanka, which historically had a great deal of ethnic conflict with the Sinhalese) being displayed right alongside pictures of murdered Sinhalese journalists - https://groundviews.org/2022/05/13/challenging-impunity-for-... . To me, this is groundbreaking - for a very long time, Sinhalese Sri Lankans would dismiss any atrocities against the Tamils out of hand. As part of the current protests against the president of Sri Lanka, I've heard more and more stories of atrocities performed against Tamils being discussed and elevated by Sinhalese people, and that is a powerful sign of positive change.
2. Sri Lankans are also becoming more open to LGBTQ people - in the past, Sri Lanka has been incredibly conservative, and profoundly dismissive and marginalizing of everyone who is not straight and cis. However, there was more openness and acceptance of LGBTQ folks during the protests against the president, and Sri Lankans even celebrated pride: https://www.themorning.lk/pride-in-colombo-past-present-and-...
Having said this, Sri Lanka is in a very tough spot indeed - being more open-minded and progressive is cold comfort when you are eating just one meal a day, or sleeping in your car while in line for fuel.
I recently saw a video where an agitator came up to a mob of mostly Sinhalese people (Sinhalese being the majority ethnic group) and said "The Muslims are coming after me with swords!" only to be told by the mob to take his racism and nationalism elsewhere. The current administration came to power on a racist and nationalistic platform, and it seems that racist and nationalist thinking is falling from grace right along with the ruling clan.
I couldn't find the video I mentioned above, so I am not able to cite it, but I can cite the following examples of more un-racist and un-nationalist behavior in Sri Lankans at present:
1. In the following article, you can see posters of murdered Tamil journalists (Tamil being the second biggest ethnic group in Sri Lanka, which historically had a great deal of ethnic conflict with the Sinhalese) being displayed right alongside pictures of murdered Sinhalese journalists - https://groundviews.org/2022/05/13/challenging-impunity-for-... . To me, this is groundbreaking - for a very long time, Sinhalese Sri Lankans would dismiss any atrocities against the Tamils out of hand. As part of the current protests against the president of Sri Lanka, I've heard more and more stories of atrocities performed against Tamils being discussed and elevated by Sinhalese people, and that is a powerful sign of positive change.
2. Sri Lankans are also becoming more open to LGBTQ people - in the past, Sri Lanka has been incredibly conservative, and profoundly dismissive and marginalizing of everyone who is not straight and cis. However, there was more openness and acceptance of LGBTQ folks during the protests against the president, and Sri Lankans even celebrated pride: https://www.themorning.lk/pride-in-colombo-past-present-and-...
Having said this, Sri Lanka is in a very tough spot indeed - being more open-minded and progressive is cold comfort when you are eating just one meal a day, or sleeping in your car while in line for fuel.
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how long do you have to que for fuel before you use more fuel queuing than you actually get..
That’s a developed country view to assume people are queueing up in their vehicles.
People in developing countries just hand carry a tank.
People in developing countries just hand carry a tank.
Mostly it's TukTuk drivers who simply switch off their engine, and simply push their vehicle when it's time to move up.
A quick scour of Google seems to come up with about 0.2 gallons per hour (about 900ml) for an idling engine, so assuming you keep your engine running (and discounting extra fuel used moving forward in the line), let's say you have a 16 gallon tank, you'll be able to run the engine for about 80 hours before stalling. Plus or minus 20% bearing in mind size of engine, tank size, ratio of time spent idle vs. moving, how much fuel you start with (you wouldn't be at a fuel station with a full tank, I'd imagine?)
80 hours is a lot less than I thought it would be.
80 hours is a lot less than I thought it would be.
Would be a function of how long the line is not how long you have to wait since presumably the people in line aren't needlessly wasting gas while not moving.
They probably turn off their engines when queued.
So, infinite.
So, infinite.
This is the result of the govts incompetent attempt to "Go Green."
Your statement is not accurate and also misleading. There’s a number of factors that landed Sri Lanka where it is today for example over investing in domestic production for internal consumption vs. investing in a healthy export economy, deep tax cuts beginning in 2019 to gain support for the ruling party, and taking on massive amounts of debt to China to fund infrastructure projects. The country is 13 years removed from a civil war (which is not a long time) and has been mostly led by a dynastic family that implemented damaging policies to maintain popular support. All of this was exacerbated by the pandemic, accelerating the downfall of the country’s economy because of these disastrous policies.
And to address your “go green” comment directly, Sri Lanka banned the import of foreign fertilizers not because they were committed to being organic but because they had dire foreign exchange shortages beginning last year. This has commonly been misconstrued as the country trying to be organic because that’s how it was sold to the people of the country by that dynastic leadership to hide the failure of leadership’s economic policies.
I’m disappointed that you posted this comment to HN. We are a community that’s better than this historically but I see the same uniformed voices popping up here now that ruined Reddit years ago. Sri Lanka is a country of 22 million people who are currently in a crisis and actually starving. They deserved better than what you wrote.
And to address your “go green” comment directly, Sri Lanka banned the import of foreign fertilizers not because they were committed to being organic but because they had dire foreign exchange shortages beginning last year. This has commonly been misconstrued as the country trying to be organic because that’s how it was sold to the people of the country by that dynastic leadership to hide the failure of leadership’s economic policies.
I’m disappointed that you posted this comment to HN. We are a community that’s better than this historically but I see the same uniformed voices popping up here now that ruined Reddit years ago. Sri Lanka is a country of 22 million people who are currently in a crisis and actually starving. They deserved better than what you wrote.
"Sri Lanka banned the import of foreign fertilizers not because they were committed to being organic but because they had dire foreign exchange shortages"
In a free-market economy, the government is not in charge of importing things. It should make no difference whether the government has any foreign currency. Private actors can import things if they have the foreign currency to pay for them. Which they can get by exporting stuff.
I don't know what sort of deviations from a free-market economy are going on in Sri Lanka that led to this problem. But something is very wrong. Destroying your agricultural sector so the government can get more foreign currency is just obviously stupid. Unless, of course, you're benefiting from some corrupt scheme involving government control of foreign exchange...
In a free-market economy, the government is not in charge of importing things. It should make no difference whether the government has any foreign currency. Private actors can import things if they have the foreign currency to pay for them. Which they can get by exporting stuff.
I don't know what sort of deviations from a free-market economy are going on in Sri Lanka that led to this problem. But something is very wrong. Destroying your agricultural sector so the government can get more foreign currency is just obviously stupid. Unless, of course, you're benefiting from some corrupt scheme involving government control of foreign exchange...
Last paragraph unneeded.
If that would have been the only sentence or the first sentence, I would agree with you, and it would be against HN rules. But the commenter gave more context to what's happening in Sri Lanka than all of us provided together, so I respect his/her opinion. I still think just creating a new top comment would have been more productive though (and would be on the top of the page)
I would disagree.
On the contrary, very much needed.
> massive amounts of debt to China
China holds ~10% of Sri Lanka's external debt. Like the organic farming debacle, blaming China is a simplistic and misleading narrative
China holds ~10% of Sri Lanka's external debt. Like the organic farming debacle, blaming China is a simplistic and misleading narrative
10% of expensive debt built over a short period of time is pretty massive.
It’s, however, not the sole, or even one of the larger causes of Sri Lanka’s current issues.
That being said, if the same money was raised from the IMF, the IMF would work with Sri Lanka to help resolve their issues much better than what China does. And it would probably have prevented the govt from taking some Of the worst actions they took that did contribute to the problems Sri Lanka is facing by threatening to withold money during future funding rounds.
The reason a lot of authoritarian and corrupt governments have been opting for Chinese debt is because it comes with no strings attached. It’s expensive, and China is happy as long as they are paid (plus their companies and workers get work), and if they’re not paid they’re happy taking over whatever property the loan was secured with.
The IMF, OTOH, works with countries to instill better discipline, and while there are justifiable criticisms about it, it’s way overblown, because this is usually the alternative.
It’s, however, not the sole, or even one of the larger causes of Sri Lanka’s current issues.
That being said, if the same money was raised from the IMF, the IMF would work with Sri Lanka to help resolve their issues much better than what China does. And it would probably have prevented the govt from taking some Of the worst actions they took that did contribute to the problems Sri Lanka is facing by threatening to withold money during future funding rounds.
The reason a lot of authoritarian and corrupt governments have been opting for Chinese debt is because it comes with no strings attached. It’s expensive, and China is happy as long as they are paid (plus their companies and workers get work), and if they’re not paid they’re happy taking over whatever property the loan was secured with.
The IMF, OTOH, works with countries to instill better discipline, and while there are justifiable criticisms about it, it’s way overblown, because this is usually the alternative.
> The IMF, OTOH, works with countries to instill better discipline
India
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I guess you're referring to the hare-brained organic farming push and ban on importing fertilizer and pesticides? Sure, that made a bad situation worse but that isn't the root cause. The ban itself was motivated by dwindling forex reserves. High foreign debt, gross mismanagement and corruption, precipitous drop in tourism all contributed to the crisis.
Factually incorrect
Please do not post trite comments. This isn't reddit
Please do not post trite comments. This isn't reddit
This sentence demonstrates the huge disrespect for private property by the Sri Lankan government: those remitted dollars belong to the people, I hope they use the ,,informal channels’’, like cryptocurrencies (BTC or Monero), that’s the least violent way to get rid of the corrupt government.