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    Murder, deaths, runaway inflation – the litany of the common Sri Lankan

    GovernanceFinance and EconomyMurder, deaths, runaway inflation – the litany of the...
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    Murder, deaths, runaway inflation – the litany of the common Sri Lankan

    Minor scuffles, fist-fights, people dying in queues, heat strokes and cases of knife-stabbing are increasingly becoming a feature of Sri Lankan life in 2021.

    Three people died in their struggle to get fuel for their vehicles over the weekend alone. In the latest incident, a 29-year-old Colombo resident was stabbed to death following a dispute at a fuel station.

    The government is downplaying the deaths. In one case, the government said that the person who fainted and died awaiting his turn to fuel his vehicle was very old, and had had a history of high blood sugar and medication for cardiac issues.

    Arguments, quarrels and fistfights are now a common feature and social media is abuzz with posts circulating about people fainting in the heat waiting for gas, diesel and other essentials. The Minister for Energy has advised a limit to the number of fuel cans per person to combat the ongoing shortage.

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    Sri Lanka is currently facing a shortage of fuel and other essential commodities due to a forex crisis. This has been accompanied by high prices due to a sharp devaluation of the rupee following a decision to allow for the currency float.

    The resulting inflation is taking a huge toll as well. Food inflation spiked to 25.7 per cent in February – the highest in a decade. The shortages and spiking costs of essential items are being ascribed to the government enforcing import bans and raising fuel prices to shore up its currency reserves.

    Media reports quoted All Island Canteen Owners Association President saying that the price of a cup of tea was being increased taking into consideration rising prices of essential commodities including milk powder, sugar and fuel. This hike was provoked by an announcement by importers raising milk powder prices Saturday.

    Milk powder is widely consumed in Sri Lanka households, but the prevailing economic crisis had led to shortages in imported milk powder leading to long queues. Importers demanded the government to allow for a price hike in the face of the prevailing dollar shortage.

    China presses for FTA

    In the meanwhile, China is pushing Sri Lanka to complete a pending Free Trade Agreement (FTA). Talks on the FTA between China and Sri Lanka hit a hurdle in 2018 as Colombo demanded for a review of the agreement after 10 years.

    China is concerned about India wrapping up strategic energy deals in exchange for credit lines.

    Chinese Ambassador to Sri Lanka, Qi Zhenhong, discussed the ongoing FTA negotiations with Sri Lanka Foreign Minister G L Peiris, according to a statement released by the Sri Lankan foreign ministry on Sunday.

    China has invested billions of dollars in the construction of infrastructure like ports, airports, roads and power stations as part of its Belt and Road Initiative.

    But China’s concerns stem from India’s strategic investment and security interests as Sri Lanka faces a severe shortage of foreign currency and risk a sovereign debt default due to low interest rates enforced by money printing.

    India has agreed to extend a billion-dollar credit line to import food, medicines, and other essential items, a 500 million US dollar credit line to import fuel, a 400-million-dollar swap, and deferment of around 912 million US dollars until May.

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