Takshashila Research Note - Sri Lanka & the Russia-Ukraine War

Executive Summary

Due to its long-standing political, economic and military ties with Russia, Sri Lanka has maintained its neutrality in the Ukraine crisis. However, it has also given political space for Ukrainians in Sri Lanka to protest the Russian invasion and has sought to reassure the overstaying tourists of their safety. Nonetheless, the Russian invasion of Ukraine occurred at a particularly testing time for Sri Lanka. The Sri Lankan economy, already facing a looming balance of payment crisis since 2020, suffered heavily with the Russian invasion. The war disrupted the Sri Lankan tea exports due to Western sanctions on Russia while also halting recovery in the tourism sector. Ultimately, the inflation hikes due to the rising prices of fuel and food items became a significant factor in undermining the government’s legitimacy and led to massive economic and political instability in the country.

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