Results for “sri lanka”
48 found

The fall of Sri Lanka

After the end of a devastating 26-year civil war in 2009, the island of 22mn had the makings of an Asian economic success story. Under governments run by the powerful Rajapaksa family, annual economic growth peaked at 9 per cent. By 2019, the World Bank had classified the island as an upper-middle income country. Sri Lankans enjoyed a per capita income double that of neighbours such as India, along with longer lifespans thanks to strong social services such as healthcare and education. The country tapped international debt lenders to rebuild, becoming a key private Asian bond issuer and participant in China’s Belt and Road Initiative.

And yet now everything is in tatters (that passage is from a very good FT piece).  Here is one bit:

Sri Lanka’s reserves have fallen from $7.5bn in November 2019 to the point where finding $1mn is “a challenge”, Wickremesinghe, the new prime minister, said in an address last week. This has meant shortages of not only fuel but food and medicine, with hospitals forced to postpone surgeries. The country has the worst inflation in Asia at about 30 per cent in April and the currency has almost halved in value since it was floated in March. The UN Development Programme says that nearly half the population is in danger of falling below the poverty line, and warns of a looming humanitarian crisis as the urban poor and former middle class begin to cut back on meals.

And:

“Most people are down to one meal a day”, says her neighbour, Mohammad Akram, “but are embarrassed to admit it.”

I believe we have not yet internalized how rapidly a middle income country can fall from grace and into utter chaos.

Is Sri Lanka becoming a failed state?

The economic crisis is a result of mismanagement by the Rajapaksa administration (and its predecessors) as well as Sri Lanka’s vulnerability to external shocks. The pandemic and Russia’s invasion of Ukraine have had a devastating impact. The Rajapaksas pursued populist economic policies — including unaffordable fuel and food subsidies and printing money to finance them — that spurred inflation. The president was heavily criticized for a disastrous “100% organic” policy that aimed to reduce the strain on foreign currency reserves by banning the import of chemical fertilizers. The policy resulted in slashed agricultural output at a time when food supplies were already running low and prices were soaring.

Meanwhile, foreign tourism — a key source of jobs, economic growth, and foreign currency — fell after the 2019 Easter bombings and then collapsed during the pandemic. The spike in international commodity prices, which has been exacerbated by Russia’s invasion of Ukraine, has piled further economic pressure on Sri Lanka. The country relies heavily on imports of food, fuel, and other essential goods to feed the people and keep the lights on.

Here is more from GZero.

Update on the Sri Lanka Organic Farming Disaster

In Organic Disaster I wrote:

Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

Here is the latest update:

Sri Lanka has announced compensation for more than a million rice farmers whose crops failed under a botched scheme to establish the world’s first 100-percent organic farming nation.

…The government will pay 40,000 million rupees ($200m) to farmers whose harvests were affected by the chemical fertiliser ban, agriculture minister Mahindananda Aluthgamage said on Tuesday.

“We are providing compensation to rice farmers whose crops were destroyed,” he told reporters. “We will also compensate those whose yields suffered without proper fertiliser.”

The government will spend another $149m on a price subsidy for rice farmers, he added.

About a third of Sri Lanka’s agricultural land was left dormant last year because of the import ban.

A good example of central planning in action.

What will Austro-Sri Lankan business cycle theory look like?

The world’s poorest countries face a $10.9bn surge in debt repayments this year after many rebuffed an international relief effort and instead turned to the capital markets to fund their responses to the coronavirus pandemic.

A group of 74 low-income nations will have to repay an estimated $35bn to official bilateral and private-sector lenders during 2022, according to the World Bank, up 45 per cent from 2020, the most recent data available.

One of the most vulnerable countries is Sri Lanka, where the rating agency S&P Global last week warned of a possible default this year as it downgraded the country’s sovereign bonds. Investors are also concerned about Ghana, El Salvador and Tunisia, among others.

Here is more from the FT.  Not surprisingly, China is warning against rapid Fed rate hikes.

Model this for Sri Lanka Indian Coasean spite value

  • India is buying Sri Lanka’s second-largest airport, despite it only handling a dozen passengers a day.
  • China recently took control of a nearby port that opens up significant trade routes, and India is worried about China’s growing role in the Indian Ocean.
  • Experts say the $300 million investment by India is an attempt to limit China’s ability to operate its port as a naval site.

Here is the story, via the excellent Samir Varma.  India/China remains one of the world’s big stories…

Sri Lanka notes

If you go to cross the street, cars actually will stop for you.

It’s a lovely country to visit.  It is exotic, quite safe (these days), and it’s much cleaner than I had been expecting.  Both of my guidebooks claim the food is mediocre, but you can find excellent Sri Lankan dishes by going to small restaurants and paying less than a dollar (the actual restaurant scene does seem underdeveloped, though the places in the Cinnamon Grand are quite good).  Just look for places where everyone is eating with their hands.

Order any vegetarian dish with cashews or a cashew sauce.

The place feels like an odd mix of Thailand and, of all places, Curacao.  The old capital, Kandy, is vaguely reminiscent of Nara, Japan in its overall presentation and its feel of Buddhist classicism.

Interior design seems to be their area of greatest accomplishment.  The relevant sites are numerous but spread out.

The literacy rate is about 92%.  A visit to Sri Lanka will increase your opinion of “water transport” theories of high social indicators.

Here is an update on where ethnic tensions stand.

The Chinese are trying to buy them off with infrastructure, most of all port facilities.

The coconuts are orange.

I thank Yana for useful conversations related to this post.

My favorite things Sri Lanka

This is a tough one, and I admit failure in advance, and yes I will call upon the diaspora in this case.  But even that doesn’t much help me.  Here goes:

1. Popular music: M.I.A., with Arular and then Kala being my favorite works by her.

2. Science fiction writer, lived in: Arthur C. Clarke lived there for over fifty years.

3. Author: Michael Ondaatje was born in Sri Lanka, I like but do not love his work.  Two quite recent Sri Lankan novels are Michelle de Kretser, Questions of Travel, and Ru Freeman, On Sal Mal Lane, both noteworthy.

4. Movie, set in: I can’t think of one.  Bridge on the River Kwai was filmed here.

5. Architect: Geoffrey Bawa, some images are here.

Is Lal Jayawardena the most famous Sri Lankan economist?  And I have had excellent Sri Lankan food in Germany, most of all in Berlin.  There is a takeaways Sri Lankan place in Derwood, Maryland, Spice Lanka, which I have yet to try.  When I was much younger, the Sri Lankan chess player Sunil Weeramantry was always very cordial to me.  And my grandmother had a Sri Lankan friend who, when I was a small boy, used to bring us cashews.  I liked him.  I think of the music — perhaps unfairly — as falling into the “raucous, influenced by cinema, good jolly fun but I’m not going to buy it” category, but I would gladly receive your better-informed recommendations in the comments.

Sorry people, I’ll try harder next time.  I don’t follow cricket and I know virtually nothing about cinema here, I hope to learn more.

China loan fact of the day

Three of the largest recipients of China’s rescue lending have been Pakistan, Sri Lanka and Argentina, which together have received as much as $32.83bn since 2017, according to data compiled by AidData, a research lab at William & Mary, a university in the US.

Other countries receiving rescue lending from Chinese state institutions included Kenya, Venezuela, Ecuador, Angola, Laos, Suriname, Belarus, Egypt, Mongolia and Ukraine, according to AidData, which did not provide details for these countries.

Here is more from the FT.  I don’t actually see this ending well.

Shopping in Russia

Finally, I offer a comment on the shuttered street level shops and mall tenants that have been gleefully reported by Western journalists:   yes, major Western branded stores have closed down, not all, but a great many.  Their loss is felt on the most prestigious shopping streets and malls, where they bought market share for their products by lavish spending on promotion, including prestige premises.  However, outside these limited addresses, one does not see gaps in the street level stores in Petersburg.  I see more empty store fronts in shopping streets in Brussels than here.

And more specifically:

This store chain [Azbuka Vkusa] puts the previous tenant to shame. The sheer variety and luxury of the present offering in fresh produce, cheeses, meats, fish, tinned conserves of all varieties is stunning. The fresh fish section offers swordfish from Sri Lanka, wild salmon from the Faroe Islands (presumably Russian caught), some unidentified white sea fish from Egypt, and dorade from Turkey. In a tank, there is a two kilogram live Kamchatka King Crab waiting for a buyer at 200 euros.  Live oysters in another tank are brought from both Crimea (large) and from the Far East (very large).  Farmed mussels are brought in from Crimea.

Here is the full story from Gilbert Doctorow, via Anecdotal.

Organic Disaster

Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

According to major Sri Lankan tea conglomerate Herman Gunaratne, one of 46 experts picked by President Rajapaksa to spearhead the organic shift, the move’s consequences for the country are unimaginable.

“The ban has drawn the tea industry into complete disarray… If we go completely organic, we will lose 50 per cent of the crop, (but) we are not going to get 50 per cent higher prices,” he reportedly said.

…Former central bank deputy governor W.A. Wijewardena reportedly termed the organic plan as a “dream with unimaginable social, political and economic costs”. He said Sri Lanka’s food security had been “compromised” and without foreign currency, it’s “worsening day by day”.

An island-wide survey of farmers found out that 90 per cent use chemicals for farming and 85 per cent expected sizable reductions in their harvest if disallowed to use fertilisers. Moreover, the survey said that only 20 per cent farmers had the knowledge to transition to completely organic production.

It also found that 44 per cent farmers are experiencing a decline in harvests, and 85 per cent are expecting a fall in the future.

The survey also revealed that many key crops in Sri Lanka depend on heavy use of chemical input for cultivation, with the highest dependency in paddy at 94 per cent, followed by tea and rubber at 89 per cent each.

With the shift from chemical to organic cultivation, Sri Lanka needs a large domestic production of organic fertilisers and biofertilisers. However, the situation is very bleak.

The government has responded to the soaring prices not by reversing its decree but in the usual way by imposing price controls, attacking “hoarders” and seizing stocks of agricultural commodities like sugar.

Organic farming has its place but it takes a lot of human capital to make it work and overall it results in lower yield and thus more land used. Nor is organic farming less polluting per unit of output. See this piece from the Annual Review of Resource Economics.

Organic agriculture is often perceived as more sustainable than conventional farming. We review the literature on this topic from a global perspective. In terms of environmental and climate change effects, organic farming is less polluting than conventional farming when measured per unit of land but not when measured per unit of output. Organic farming, which currently accounts for only 1% of global agricultural land, is lower yielding on average. Due to higher knowledge requirements, observed yield gaps might further increase if a larger number of farmers would switch to organic practices. Widespread upscaling of organic agriculture would cause additional loss of natural habitats and also entail output price increases, making food less affordable for poor consumers in developing countries. Organic farming is not the paradigm for sustainable agriculture and food security, but smart combinations of organic and conventional methods could contribute toward sustainable productivity increases in global agriculture.

Saturday assorted links

1. Memos related to the hiring of the “radical” economists at U. Mass Amherst, way back when.  And Bobby Fischer video on what went wrong with chess.

2. The history of Earl Slick, sideman guitarist.

3. A Richmond series on how the guardianship process leaves vulnerable people unprotected.

4. What the commies think.

5. “This estimate implies that the amenity value of a government job [in India] is at least 81% of total compensation.

6. Columbus vs. Columbo (what!!??).  That’s the TV character, not Sri Lanka.

7. “Farmbake biscuits are smashed into crumbs, combined with milk and thrown in the microwave to create fluffy chocolate “jail cake”.”  Not the only thing they make in NZ prison, a new home for yogurt entrepreneurship.

What I’ve been reading

Roderick Floud, An Economic History of the English Garden.  Every page of this book does indeed have economics.  It just does not have interesting economics.  Which may mean that gardens are not so interesting from an economic point of view.  Which in turn would make this a good book.  But not an interesting book.

Ajantha Subramanian, The Caste of Merit: Engineering Education in India.  A critique of casteism and growing inequality, this book also doubles as a fascinating history of IIT.  Best read in Straussian fashion as a sympathetic story of origins.

Dana Thomas, Fashionopolis: The Price of Fast Fashion & The Future of Clothes.  Some parts of this book have bad economics and extreme mood affiliation, but in general it has more actual information than other books on the same topic and at times the author makes decent external cost arguments against the current system of clothes production.  So a qualified recommendation, at least I am glad I read it, even though some parts are obviously too sloppy.

Razeen Sally, Return to Sri Lanka: Travels in a Paradoxical Island.  People do not think enough about Sri Lanka, including in the social sciences!  It is a richer and nicer country than what most people are expecting, and it is good for studying both conflict and ethnic tensions.  This memoir — information rich rather than just blather — is one good place to get you started.

David Goldblatt, The Age of Football: The Global Game in the Twenty-First Century.  Football meaning soccer of course, this book covers how soccer interacts with politics in many particular countries, including Africa, and just how much the game has grown in global markets.  Mostly informative, good if you wish to read a book about this topic (I don’t).

Conversations with Zizek.  Maybe the best introduction to why Žižek is a richer thinker than his critics allege?  The book serves up insights on a consistent basis, and there is a minimum of jargon.  Marcus Pound had a good blurb: “Audacious and vertiginous, this book is everything one expects from him, a heady mix of psychoanalysis, politics, theology, philosophy, and cultural studies that will leave the reader both exhausted and exhilarated.”

Do Extreme Rituals Have Functional Benefits?

To show their devotion to Murugan, the Hindu God of War, devotees in South India and Sri Lanka (all males) are pierced with large hooks and then hung on a festival float, as if they were toys on a nightmarish baby mobile. It’s an amazing and horrifying display not unlike Christian devotees in the Philippines who are nailed to crosses.

But what are the effects of these practices on those who undergo them? Surprisingly, positive. In, Effects of Extreme Ritual Practices on Psychophysiological Well-Being, a group of anthropologists, biologists and religious studies scholars compared measures of physiological, psychological and social well being in a small group of devotees compared to a matched sample. The group performing the ritual had no long lasting health harms but did appear to benefit psychologically through feelings of euphoria and greater self-regard and socially through higher status.

Despite their potential risks, extreme rituals in many contexts are paradoxically associated with health and healing (Jilek 1982; Ward 1984). Our findings suggest that within those contexts, such rituals may indeed convey certain psychological benefits to their performers. Our physiological measurements show that the kavadi is very stressful and high in energetic demands (fig. 2C, 2D). But the ostensibly dangerous ordeal had no detectable persistent harmful effects on participants, who in fact showed signs of improvement in their perceived health and quality of life. We suggest that the effects of ritual participation on psychological well-being occur through two distinct but mutually compatible pathways: a bottom-up process triggered by neurological responses to the ordeal and a top-down process that relies on communicative elements of ritual performance (Hobson et al. 2017).

Specifically, the bottom-up pathway involves physical aspects of ritual performance related to emotional regulation. Ritual is a common behavioral response to stress (Lang et al. 2015; Sosis 2007), and anthropological evidence shows that in many cultures dysphoric rituals involving intense and prolonged exertion and/or altered states of consciousness are considered as efficient ways of dealing with various illnesses (Jilek 1982). In our study, those who suffered from chronic illnesses engaged in more painful forms of participation by enduring more piercings. Notably, higher levels of pain during the ritual were associated with improvements in self-assessed health post-ritual. Although the pain was relatively short-lived, there is evidence that the social and individual effects of participation can be long-lasting (Tewari et al. 2012; Whitehouse and Lanman 2014).

The sensory, physiological, and emotional hyperarousal involved in strenuous ordeals can produce feelings of euphoria and alleviation from pain and anxiety (Fischer et al. 2014; Xygalatas 2008), and there is evidence of a neurochemical basis for these effects via endocrine alterations in neurotransmitters such as endorphins (Boecker et al. 2008; Lang et al. 2017) or endocannabinoids (Fuss et al. 2015). These endocrine effects are amplified when performed collectively, as shown by studies of communal chanting, dancing, and other common aspects of ritual (Tarr et al. 2015). While it is uncertain how long-lasting these effects are, such euphoric experiences may become self-referential for future well-being assessment.

At the same time, a top-down pathway involves social-symbolic aspects of ritual. Cultural expectations and beliefs in the healing power of the ritual may act as a placebo (McClenon 1997), buffering stress-induced pressures on the immune system (Rabin 1999). In addition, social factors can interact with and amplify the low-level effects of physiological arousal (Konvalinka et al. 2011). Performed collectively, these rituals can provide additional comfort through forging communal bonds, providing a sense of community and belonging, and building social networks of support (Dunbar and Shultz 2010; Xygalatas et al. 2013). The Thaipusam is the most important collective event in the life of this community, and higher investments in this ritual are ostensibly perceived by other members as signs of allegiance to the group, consequently enhancing participants’ reputation (Watson-Jones and Legare 2016) and elevating their social status (Bulbulia 2004; Power 2017a). Multiple lines of research suggest that individuals are strongly motivated to engage in status-seeking efforts (Cheng, Tracy, and Henrich 2010; Willard and Legare 2017) and that there is a strong positive relationship between social rank and subjective well-being (Anderson et al. 2012; Barkow et al. 1975). Indeed, we found that individuals of lower socioeconomic status were more motivated to invest in the painful activities that can function as costly signals of commitment. Recent evidence from a field study in India shows that those who partake in these rituals indeed reap the cooperative benefits that result from increased status (Power 2017b).

In addition, the cost of participation can have important self-signaling functions. On the one hand, it can boost performers’ perceived fitness and self-esteem, which positively affects mental health (Barkow et al. 1975). On the other hand, through a process of effort justification, such costs can strengthen one’s attachment to the group and sense of belonging (Festinger 1962; Sosis 2003). This role of costly rituals in generating positive subjective states (Bastian et al. 2014b; Fischer et al. 2014; Wood 2016) and facilitating social bonding (Bastian, Jetten, and Ferris 2014a; Whitehouse and Lanman 2014) may offer insights into the functions of painful religious practices.

The mind has an amazing ability to turn what would be torture under some scenarios into something else.

Hat tip: Kevin Lewis.