We were about to recover from the economic aftermath that Russia-Ukraine caused to our nation, we are facing yet another catastrophe in two of our neighbouring nations, Sri Lanka & Pakistan. While the former plunged into an economic crisis, the latter is facing political turmoil and there’s a new Prime Minister. We are yet to ascertain the macro impact it would have on our nation, but we all have our predictions. Fuel price in India has been on a record-breaking run, faster than Usain Bolt and the common man has no idea where and when will the end be. This article will talk about how such economic unrest and political drama are burning a massive hole in our pockets. It’s already late and we need to find a global economic extinguisher soon.
The Sri Lankan Situation
Sri Lankan economy was already in shambles when the pandemic hit their nation. When their condition was coupled with bad schemes and policies, the situation further worsened and hit their tourism and this eventually snowballed into a greater economic catastrophe.
Inflation in the country is in a pitiful state. According to a recent report, wheat and rice are priced at INR 220/kg and INR 190/kg respectively, in Colombo, while coconut oil currently stands at INR 850/litre. A single egg costs INR 30, and milk powder costs INR 1,900/kg. The inflation rate in Sri Lanka as of February 2022, was at 17.5% which is said to go even higher beyond 25%.
The Indian Stance
Not being a schadenfreude, the Indian garment units may benefit from the Sri Lankan crisis in a small way. While the production of hosiery items for exports in Sri Lanka has been affected due to several hours of a power cut, cotton traders in India are going the premium way, owing to the 11% import duty which, in turn, is intended to flourish the domestic garment units in the international markets.
On the other hand, India has been aiding the Sri Lankan government with a $400-million currency swap and a $500-million credit line for fuel purchases. The Sri Lankan government has also sought credit line aid of an additional $1.5 billion, over and above the $1 billion support that the Indian government extended to help pay for critical imports.
The Ceylon Cyclone waving at the Indian Economy
The Sri Lankan crisis can affect the Indian condition on various levels. Firstly, there would be a huge inflow of refugees from the nation in distress. This can also give rise to the formation of various rebel groups in the country. Secondly, the economic impact is already showing its impact with the rising prices of essential commodities. Lastly, on the humanitarian grounds, India unintentionally has to take up the role of a Big Brother and help Sri Lanka regardless of the problems that India is facing internally. This can cause a national outbreak and could result in nationwide protests, unrest and curfews, which is expected to happen anytime soon.
The pandemic might have taken a back seat for now, but the world is still in a miserable state. Russia and Ukraine are still battling it out in the boxing ring and there’s chaos unleashed here in Sri Lanka and Pakistan. We’d hate to quote Doctor Strange here, but it seems like – “We’re in the endgame now”!
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