Economic crisis tightens grip on Sri Lanka’s hinterland

As Sri Lanka’s economic crisis grabs global headlines, farmhand B. Sundararajan watches it manifest in his cup of tea.

In recent weeks, he has cut his habit, two cups of tea a day for one. “Milk powder is not readily available. When it is available, it is not affordable. There is no choice but to reduce our tea,” said the resident of Doloswala village in Ratnapura district in southern Sri Lanka. Besides the irony of a tea plantation worker, producing the famous ‘Ceylon tea’, rationing his own tea consumption, Mr Sundararajan’s reality lays bare the seriousness of Sri Lanka’s current economic collapse. Lanka.

Rise in inflation

The country’s rapidly depleting foreign exchange reserves – $3.1 billion at the end of 2021 – have pushed the Rajapaksa administration into a corner. The government needs dollars to import basic foodstuffs, fuel and medicine, which have often been in short supply in recent months. So does powdered milk, which Sri Lanka mainly imports and consumes widely in place of fresh milk.

Dozens of consumers are struggling to afford staples such as rice, pulses, vegetables, fish and meat with skyrocketing prices amid import restrictions imposed to save currency. Consumer price inflation hit 14% last week. Finding LPG cylinders, in short supply, remains a challenge.

And if the consumer is a daily salaried worker like Mr. Sundararajan, where his hard-earned salary of LKR1,000 (₹366) is tied to tedious production targets, giving up a cup of tea or even a meal, as in the case of many poor families, is the only option.

The story of Sri Lanka’s economic crisis has come to the fore amid the pandemic, which has dealt a severe blow to the country’s crucial foreign exchange earning sectors. Colombo has external debt obligations totaling nearly $7 billion this year, and Sri Lanka is “trying all options” to avoid default, Finance Minister Basil Rajapaksa recently told the FinancialTimes.

India and China have given emergency aid in the form of loans and currency swaps, but Sri Lanka is still on the edge. National politics, policymakers and think tanks are debating whether the country should opt for an IMF bailout. Some analysts even argue that Sri Lanka needs to prepare to default and then restructure its debt, although the government is determined to maintain the country’s spotless record on external debt servicing.

Meanwhile, plantation workers in Sri Lanka, like the nearly 900 employees at the tea and rubber plantations in the village of Doloswala, did not have to wait for the pandemic to experience deprivation.

“For the past few years, the struggle for the Rs. 1,000 salary of our workers has been the focus of attention. They earned the salary, but there are 1,000 other problems that the community has been facing for decades,” said Anthony Masilamani, who works at the local administrative authority. He was speaking at a recent event organized by the village Catholic Church, in remembrance of local heroes who died fighting for community rights.

“Our people are still living in overcrowded housing, regardless of family size. Our schools do not have math and science teachers for the upper grades. We don’t have enough toilets. This is our reality,” he said, pointing out that the country’s recent economic downturn has deepened the misery of workers, not created it.

Several young people who worked in shops and restaurants in the capital Colombo returned to the village without jobs after the pandemic hit, the father said. Jeewantha Peiris, who organized the event. “Physical distancing is impossible in their online accommodation. Many children were already malnourished. The situation has only worsened due to current shortages. Speaking about the event, he said it was “just to remember our local personalities” who have asserted community rights in the past. “They weren’t part of the big movements, so they’re not usually commemorated in the same way,” he added.

Even otherwise, rubber plantation workers in Sri Lanka receive far less attention than their counterparts working on tea plantations, mainly in the central highlands. This, despite rubber being the third largest product in Sri Lanka’s export basket, after clothing and tea, and bringing in almost $1 billion in exports last year.

Lourde Manila works at a local rubber factory and says she has to work three people to earn the maximum wage. “I have three children, and their education and their future depend on what I am able to spend today,” she said. “But when the cost of living is so high and wages are stagnant, how are we supposed to feed our children and pay for their education?”

Workers also spoke of land rights long denied to the community, which left them economically vulnerable for generations. “If we had land of our own, we could build a small house, grow vegetables, apply for a bank loan by showing our documents to start a small business. Without property, we can’t do any of this. We cannot even cut branches from a tree in front of our house to make a roof,” said A. Anton.

Most NGOs working on rights in the plantation sector tend to focus on tea plantations in the hinterland districts, according to Masilamani. “We live here in the south, surrounded by a majority Sinhalese. Sometimes even our own people elsewhere don’t consider us Malaiyaha [hill country] Tamils. It’s like we’re invisible,” he said.

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