Earlier this month, the Rajapaksa government imposed a state of emergency in Sri Lanka after its bungled response to a brewing foreign exchange crisis cascaded into food shortages. An army general has been put in charge of catching both hoarders of food and holders of foreign currency. Like a Greek tragedy, we know how things will unfold, but well-wishers of the Sri Lankan people are powerless to stop the avoidable suffering that lies ahead.
Running out of foreign exchange amid an economic downturn and with looming debt-servicing obligations, the Sri Lankan government imposed a slew of import controls earlier this year. Banning the import of automobiles, toilet fixtures, Venetian blinds, toothbrush handles and turmeric is one thing, but a complete ban on fertilizers is entirely another. Domestic production is critical for any food-importing country facing a foreign exchange crisis. In Sri Lanka’s case, it is even more important because it is a major exporter of tea. The fertilizer ban has left Sri Lanka both short of food and US dollars.
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