\u00a0<\/a>of its foreign debt and warned that it may default.<\/p>\n\n\n\nThe country’s ruling dynasty \u2014 led by President Gotabaya Rajapaksa and his brother, Prime Minister (and former president) Mahinda Rajapaksa \u2014 have lost most of their cabinet and parliamentary majority. Earlier this month, a newly appointed finance minister tried to\u00a0resign\u00a0after less than 24 hours, saying the pressure was too much for him. (He was replacing Basil Rajapaksa, another brother.)<\/p>\n\n\n\n
Suffering is widespread. The country cannot pay for imports, so food and fuel are running short, leading to 13-hour blackouts and rationing. Inflation is running at nearly 19% and the central bank has just doubled interest rates.<\/p>\n\n\n\n
How\u00a0did this tiny Indian Ocean nation end up in such straits? Yes, structural factors played a role. China-financed infrastructure follies soaked up scarce capital. Profligate politicians cut taxes unwisely. The pandemic battered the tourism sector and, of course, Russia’s invasion of Ukraine has made everything worse.<\/p>\n\n\n\n
But the deeper problem is that the Rajapaksas turned Sri Lanka’s policymaking over to cranks, especially in two crucial fields \u2014 agriculture and monetary policy.<\/p>\n\n\n\n
Last April, the government followed through on a campaign promise to transition Sri Lanka to organic farming by\u00a0banning\u00a0the import and use of synthetic fertilizers. More than two-thirds of Sri Lanka’s people are directly or indirectly dependent on agriculture; economists and agronomists warned that a transition to organic farming on that scale would destroy productivity and cause incomes to crash.<\/p>\n\n\n\n
Nevertheless, the irrigation minister, Chamal Rajapaksa (yes, yet another brother)\u00a0insisted that the country should not listen to the “chemical fertilizer mafia.” Pro-organic activists also received crucial support from the\u00a0health minister, a hardline Sinhala nationalist named Channa Jayasumana who has also\u00a0argued\u00a0that, unlike in “Western” medicine, local religious figures could cure cancer and kidney diseases because they could “communicate with invisible spirits and gain knowledge.”<\/p>\n\n\n\n
Unsurprisingly, the cranks were wrong. The production of rice \u2014 the basic component of Sri Lankans’ diet \u2014 and of tea \u2014 the country’s main export \u2014 sank precipitously. That didn’t just reduce purchasing power and cause food insecurity, it seriously harmed the country’s balance of payments. Sri Lanka had to start importing rice, even as export earnings from tea dried up. Enter the second set of cranks. The central bank governor at the time, Weligamage Don Lakshman,\u00a0informed\u00a0the public during the pandemic that nobody need worry about debt<\/p>\n","protected":false},"excerpt":{"rendered":"
Promoting organic farming and heedlessly printing money, the country’s ruling clan has conclusively demonstrated why some ideas should remain on the shelf. By Mihir Sharma Cranks are considered cranks for a reason. That is the lesson from Sri Lanka, which has\u00a0halted payments\u00a0of its foreign debt and warned that it may default. The country’s ruling dynasty […]<\/p>\n","protected":false},"author":1,"featured_media":323,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-322","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/posts\/322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=322"}],"version-history":[{"count":2,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/posts\/322\/revisions"}],"predecessor-version":[{"id":325,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/posts\/322\/revisions\/325"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=\/wp\/v2\/media\/323"}],"wp:attachment":[{"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sustainability-handbook.alive2green.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}