new Delhi: Sri Lanka is currently reeling from the worst economic crisis in the last few decades. The island nation, battling a severe foreign exchange crunch, has struggled to pay for essential imports, including fuel, to President Gotabaya Rajapaksa’s government, leading to a 13-hour power outage.
The crisis led to violent clashes between protesters and the police force last week, leading the government to declare a nationwide state of emergency.
Boom to bust: how Sri Lanka slipped deep into economic boom
According to a section of critics, the current gloomy scenario is the result of economic mismanagement by successive governments, which has triggered and sustained a double deficit budget deficit along with the current account deficit.
The 2019 Asian Development Bank Working Paper read, “Sri Lanka is a classic twin deficit economy … Twin deficits indicate that a country’s national expenditure exceeds its national income, and that the production of tradable goods and services is inadequate “
However, the current crisis can be traced back to Rajapaksa’s promise of deep tax cuts during the 2019 election campaign, which was implemented months before the Covid-19 pandemic hit parts of the country’s economy. As a result, Sri Lanka’s debt management program got derailed and foreign exchange reserves fell by nearly 70 per cent in two years.
Also, the government’s call to ban all chemical fertilisers in 2021 had a severe impact on the agriculture sector and resulted in a decline in the rice crop, despite the government later retracting the move.
Another major reason behind the grim picture of the country could be the vicious cycle of Sri Lanka borrowing money from China for its infrastructure projects and being unable to pay it back. As a result, the island nation either had to relinquish control of its projects or take out loans to repay China.
The most infamous example of this is the port of Hambantota. In early 2010, the then President of Sri Lanka Mahinda Rajapaksa, now the country’s prime minister, wanted to build a port in his home region of Hambantota. However, his request for funds was turned down by several organizations citing commercial non-viability of the port. It was China that showed interest in the project and invested more than $1 billion in loans. But Rajapaksa was defeated in the following elections in 2015, and the new government, to avoid having to pay back the money, decided on a debt-equity swap, leasing the port and its surrounding 15,000 acres to China for 99 years. went.
Sri Lanka economic crisis | full coverage
refugees infiltrating into india
On 22 March this year, 16 Sri Lankan nationals, including women and children, from the Jaffna and Mannar regions of the island arrived in Tamil Nadu in two batches by boat.
As per reports, he paid Rs 50,000 to the fishermen for their transit. One of these groups was also trapped near the coast and was later rescued by the Indian Coast Guard.
According to Mandapam officials, if the current crisis continues, around 2,000 to 4,000 refugees are expected to land in Tamil Nadu in the coming weeks.
A Hindustan Times report quoted Tamil Nadu’s Minority and Non-Resident Tamils Welfare Minister KS Mastan as saying, “They have entered illegally due to economic crisis and on humanitarian grounds we are offering them accommodation and food.” “
He added: “They are under police protection. Based on the decision taken by the central government, we can take the next step.
Notably, all these 16 have been kept in the Mandapam special camp in Rameswaram.
India’s helping hand
Reiterating that ‘timing’ is a key factor for Sri Lanka as it tries to tackle the dire economic crisis, the Indian system is “working overtime” to expedite its aid to the island nation, External Affairs Minister S Jaishankar said. Said on 30 March. Ending his visit to the troubled country.
“In a situation like this, things cannot be done at the normal pace. Everything should be fast tracked. Our system is working overtime. What would have happened weeks ago now takes days, Jaishankar said, adding that the recent $1 billion Indian credit line for essential imports will be made operational “very soon”.
After meeting President Rajapaksa, Jaishankar tweeted that he has assured the country of “India’s continued cooperation and understanding”.
Glad to meet the President @GotabayaR of Sri Lanka.
Reviewed various dimensions of our close neighborly relations.
Assured him of India’s continued cooperation and understanding. pic.twitter.com/xAvCEuxhYV
— Dr. S. Jaishankar (@DrSJaishankar) 28 March 2022
Apart from economic issues, Jaishankar’s official discussions also included the ongoing talks between the Tamil National Alliance (TNA) and the Sri Lankan government.
During his visit, Jaishankar also met Sri Lanka’s Finance Minister Basil Rajapaksa and discussed the current economic crisis and India’s supportive response.
Neighborhood first. India stands with Sri Lanka.
A line of credit of US$ 1 billion was signed for the supply of essential commodities.
A key element of the package of support given by India. pic.twitter.com/Fbzu5WFE3n
— Dr. S. Jaishankar (@DrSJaishankar) 17 March 2022
Earlier, during Basil’s visit to India, Prime Minister Narendra Modi had assured Sri Lanka of standing with the country, describing Sri Lanka as a “friendly neighbour”.
Had a good meeting with the Finance Minister of Sri Lanka @RealBRajapaksa, Glad to see that our economic partnership has strengthened and investments from India are increasing. pic.twitter.com/HxXbs65LQy
— Narendra Modi (@narendramodi) 16 March 2022
Later, a statement issued by the Sri Lankan High Commission in Delhi said, “Finance Minister Rajapaksa thanked Prime Minister Modi for all the assistance provided by India to Sri Lanka at this critical time.”
How Sri Lankan refugees are being treated
In the wake of the exodus, surveillance has been increased on the coast of Ramanathapuram, especially in Rameswaram, to prevent illegal flow of refugees into Tamil Nadu due to its proximity to Sri Lanka. The 16 refugees who came here earlier have been quarantined at the Mandapam camp.
According to a report in news agency IANS, the Coast Guard and the Coastal Police will increase their patrols to prevent Indian fishermen from crossing the International Maritime Boundary Line (IMBL) and Sri Lankan fishermen into Indian waters.
The crossing of Indian fishermen into IMBL in their territorial waters has been a matter of dispute between the two countries, with fishermen organizations protesting against the arrest of Indian fishermen by the Sri Lankan Navy. At present, 92 Indian fishermen are in the custody of Sri Lankan authorities.
Tamil Nadu Chief Minister MK Stalin had brought to the notice of PM Modi and External Affairs Minister S Jaishankar about the arrest of Indian fishermen by Sri Lankan authorities.
According to Ramanathapuram SP E Karthik, several enforcement agencies are part of the vigilance programme.
Karthik said the Indian Coast Guard and Navy personnel would be the first to get information about migration by sea and the refugees would be picked up by hovercraft.
He said the Sri Lankans were not being treated as prisoners and the enforcement agency would conduct antecedent verification with those without official ‘refugee status’, adding that the government would soon decide on the future course of action.
Notably, Jacintha Lazarus, Commissioner for Rehabilitation and Welfare of Non-Resident Tamils, wrote in a letter dated March 23, “Sri Lankan Tamils have started entering India illegally through waterways. 16 people entered India due to economic crisis and lack of food in their country. Reports suggest that many more will flee their country to Tamil Nadu. In such a situation, it is advisable to get tested as per the extant government norms and accommodate them in the Mandapam camp.”
The letter further asked the local administration to take steps to ensure basic amenities in the camp and asked the officials to submit proposals for any requirement including housing, drinking water and electricity.
Lazarus told federal: “We will temporarily accommodate all Sri Lankan Tamils arriving in Tamil Nadu until the central government takes a final decision on the issue. We have already submitted the report to the government and a decision will be taken soon.
In a recent meeting between Tamil Nadu CM Stalin and PM Modi, the former sought the Centre’s approval for the state government to provide humanitarian aid to Sri Lankan Tamils in light of the economic crisis in that country.
During the meeting, Stalin gave a detailed memorandum to Modi on various issues, including those related to the economic crisis in the island nation.
Referring to the adversities being faced by Sri Lankan Tamils, Stalin said many of them embarked on a ‘dangerous journey’ to Tamil Nadu due to cheap prices of essential commodities in the beleaguered nation and are staying in a transit camp in the southern . state.
The memorandum also stated that due to the deteriorating economic situation in Sri Lanka, more people may come to the state.
At this time, the memorandum said, the Tamil Nadu government stands ready to provide essential commodities and life-saving medicines to Sri Lankan Tamils living in the northern and eastern parts of that country as well as those working in the plantation sector. Severe food crisis as a life-saving measure, and to help vulnerable groups of them, especially women and children.
“Necessary permission is requested to start this charitable activity,” the memorandum was quoted as saying by news agency PTI.
history of lankai floods
The arrival of Sri Lankan refugees in India is not new. This happened in the 19th and 20th centuries as well. During British rule, many Sri Lankan Tamils, mostly from Jaffna, came to India mostly for education and employment. He also established business here.
According to a report in The Indian Express, the migration of Sri Lankan refugees to India happened in four waves.
The first wave, which occurred during 1983–87, saw an influx of about 1.34 lakh Sri Lankan Tamils into India. However, between 1987-89, about 25,600 of them returned to the island nation, the report said.
The next wave started in 1990 with about 122,000 Tamils reaching India.
However, on 20 January 1992, after the assassination of Rajiv Gandhi, around 54,000 people were voluntarily deported back to Sri Lanka as they were facing pressure in the southern state following Gandhi’s death.
The third wave, which began in 1995 with Eelam War III, lasted until 2002. As of 12 April 2002, around 23,356 refugees had arrived in Tamil Nadu.
The fourth wave began in 2008–09 when the Sri Lankan Civil War entered its final years. By 2008-09, the exodus to Lanka had turned into a flood and the refugees continued to arrive till 2013.