Economic crisis in Sri Lanka triggers exodus to India

Chennai: Sri Lanka’s dire economic conditions, sparked by the covid-19 pandemic, are pushing its citizens off the cliff, forcing them to flee to Indian shores clandestinely to escape food shortages.

On March 22, up to 16 Sri Lankan nationals, including eight children, reached the southern Indian state of Tamil Nadu in two batches on fishing boats, according to The Indian Express newspaper. They hailed from Sri Lanka’s northern districts of Mannar and Jaffna. They were rescued by the Indian coast guard.

This, however, could only be the beginning. Intelligence officers in Tamil Nadu, the report said, have got information that “around 2,000 refugees” are likely to arrive over the next few weeks.

“Construction workers and daily wagers are struggling due to inflation across the country…More people are likely to leave the country unless the economy stabilizes,” said Suresh Premachandran, who heads Sri Lanka‘s political outfit Eelam People’s Revolutionary Liberation Front.

The meltdown highlights the poor policy response by the Sri Lankan government when its tourism sector took a beating due to the covid-19 pandemic two years ago.

State of the Sri Lankan economy

In 2020, the pandemic skewered tourism, one of Sri Lanka’s main foreign exchange-earners. This led to a dollar crisis in the Emerald Island.

Sri Lanka is heavily dependent on imports of essential items such as petroleum, food, paper, sugar, lentils, medicines, and transportation equipment. With the Central Bank of Sri Lanka’s foreign exchange reserves dwindling to around $2.3 billion now—nearly half of what it was a year ago—the country has barely any money to pay for these imports or to service its external debt.

Sri Lanka’s dollar-denominated debt repayments due this year amount to more than $6 billion, including a sovereign bond of $1 billion maturing in July.

Image courtesy of (Image Courtesy: Onmanorama)

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