Sri Lanka Economic Emergency: Sri Lankan President Gotabaya Rajapaksa recently declared an economic emergency in the country.
- The emergency was declared to contain soaring inflation after a steep fall in the value of the South Asian country’s currency caused a spike in food prices.
- The state of emergency was declared under the public security ordinance to prevent the hoarding of essential items, including rice and sugar.
- The Sri Lankan Government has also increased penalties for food hoarding.
- The president promulgated emergency regulations under the Public Security Ordinance on the supply of essential goods.
- The wide-ranging measure is also aimed at recovering credit owed to state banks by importers.
- But shortages of food come as Sri Lanka battles a fierce coronavirus wave, claiming more than 200 lives a day.
What is the reason for rising prices?
- The Sri Lankan rupee has fallen by 7.5 percent against the US dollar this year.
- The increase in the foreign exchange rate.
- The country, which is a net importer of food and other commodities, is witnessing a surge in coronavirus cases and deaths which has hit tourism, one of the country’s main foreign currency earners.
- President also named a top army officer as “Commissioner General of Essential Services to coordinate the supply of paddy, rice, sugar and other consumer goods”.
- This move followed sharp price rises for sugar, rice, onions and potatoes.
- The price rise was supplemented by long queues outside stores because of shortages of milk powder, cooking gas, and kerosene oil.
- A presidential aide has warned that fuel rationing may also be introduced by the end of the year unless consumption was reduced.
About Sri Lanka:
- Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka, is an island country in South Asia.
- It is located in the Indian Ocean to the southwest of the Bay of Bengal and to the southeast of the Arabian Sea.
- The capitals of Srilanka are Colombo and Sri Jayawardenepura Kotte.
- Sri Jayawardenepura Kotte is the legislative capital while Colombo is the largest city and center of commerce.
- The currency used here is the Sri Lankan rupee.
- The current President and Prime Minister of Srilanka are Gotabaya Rajapaksa and Mahinda Rajapaksa respectively.