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The Lessons to be Learned from the Sri Lankan-Ukraine Economic Crisis

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Last updated on May 4, 2022

For students across the United States, Advanced Placement tests are just around the corner. As you flip through the endless pages of test prep books, imagine this:

You go to take your AP exam, but hear that it has been canceled. Why? There isn’t enough paper to print your test. 

Right now, across Sri Lanka, schools have been closed for this very reason.

The crisis in Sri Lanka is not only an economic crisis, but also a humanitarian, authoritarian, and political one. With coverage on Ukraine filling headlines everywhere, the crisis’ lack of coverage is concerning.

Here is a summary of factors responsible for the economic collapse in Sri Lanka:

  • This crisis has been years in the making. From the government passing legislation which has damaged the agriculture sector to sweeping monsoons, Sri Lanka has suffered many losses in the past few years (CNN).
  • A large source of government corruption in Sri Lanka is the Rajapaksa Family, which has gained absurd influence in Sri Lankan politics. To put it into perspective, the Prime Minister and the President are both of the same family (The Indian Express).
  • Earlier, the government addressed the financial crisis by slashing taxes, amidst other measures, to promote spending. However, this backfired with the surge of Covid-19, as people began to spend less, worsening the economic situation (CNN).

The war in Ukraine is the feather that broke the camel’s back, as sanctions and war have cut off some of Sri Lanka’s key markets.

According to Southern Voice, as of 2020…

  • Russia and Ukraine purchases 18% of Sri Lankan black tea exports 
  • 45% of Sri Lankan wheat is from Russia and Ukraine
  • 50% of Sri Lankan soybeans, sunflower oil, seeds, and peas are from Ukraine

These markets, along with dozens of others cut off by the war, have driven protestors to the streets of Sri Lanka.

So, what can be learned?

First, the Rajapaksa Family’s corruption is both a history lesson as well as a warning. Since the dawn of time, government corruption has existed. However, it’s easy to say that this is a repetition of history. What is difficult to say is that this must be changed. 

In the United States and across the world, politics has been filled with lobbying, polarization, and manipulation. Furthermore, the vast majority of US politicians originate from wealthy backgrounds (Roll Call).

We must consider the consequences of trade sanctions. Oftentimes, politicians resort to sanctions as a way to take action without having to go to war. And yes, this is the best choice the vast majority of the time. While the US should not invade Russia due to mutually assured destruction, moving forward politicians ought to more deeply consider the impacts of their sanctions.

Global superpowers are oftentimes the ones who call the shots when it comes to global economic policy. However, how often do they take the well-being of smaller, less influential states such as Sri Lanka into account?

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