Sri Lanka has fallen. Protesters breached the official residences of Sri Lanka’s Prime Minister and President, who have fled to undisclosed locations out of fear of death.
The proximate reason is that the nation is bankrupt, suffering its worst financial crisis in decades.
Millions are struggling to purchase food, medicine, and fuel. Energy shortages and inflation were major factors behind the crisis. [bold, links added]
Inflation in June in Sri Lanka was over 50%. Food prices rose by 80%. And a half-million people fell into poverty over the last year.
But the underlying reason for the fall of Sri Lanka is that its leaders fell under the spell of Western green elites peddling organic agriculture and “ESG,” which refers to investments made following supposedly higher Environmental, Social, and Governance criteria.
Sri Lanka has a near-perfect ESG score (98), which is higher than Sweden (96) or the United States (51).
To be sure, there were other factors behind Sri Lanka’s fall. Covid lockdowns and a 2019 bombing hurt tourism, a $3 billion to 5 billion-per-year industry.
Sri Lanka’s leaders insisted on paying China back for various “Belt and Road” infrastructure projects when other nations refused to do so. Sri Lanka racked up a huge foreign debt. And higher oil prices meant transportation prices rose 128% since May.
But the biggest and main problem causing Sri Lanka’s fall was its ban on chemical fertilizers in April 2021.
Many other developing nations had to deal with similar challenges, including covid and high foreign debt, but have not collapsed.
The bottom line is this: over 90% of Sri Lanka’s farmers had used chemical fertilizers before they were banned. After they were banned, an astonishing 85% experienced crop losses.
The numbers are shocking. After the fertilizer ban, rice production fell 20% and prices skyrocketed 50 percent in just six months.
Sri Lanka had to import $450 million worth of rice despite having been self-sufficient in the grain just months earlier.
The price of carrots and tomatoes rose five-fold. And tea production, which had generated $1.3 billion in exports annually, declined 18% between November 2021 and February 2022, reaching its lowest level in 23 years, while undermining the nation’s ability to pay its debts.
While there are two million farmers in Sri Lanka, 70% of the nation’s 22 million people are directly or indirectly dependent on farming.
“We are furious!” said one rice farmer in May. “Angry! Not just me – but all the farmers who cultivated here are angry.”
At the end of August 2021, President Gotabaya Rajapaksa declared a state of emergency and two months later tried to reverse course.
But it was too late. “We don’t have enough chemical fertilizers,” Rajapaksa said, “because we didn’t import them. There is a shortage.”
What, exactly, were Rajapaksa and other Sri Lankan leaders thinking? Why did they engage in such a radical experiment?
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Here is hoping they set up Greenpeace Not Welcome Signs