While Tamil homeland in the Northeast of the island is being subjected to a full-scale war, the Sinhala south is facing a severe food shortage and the highest rate of inflation in the history of Sri Lanka.
An escalating war, recent heavy flooding and economic policies of President Mahinda Rajapakse’s administration are blamed for the spiraling inflation and severe shortage of food, specifically, rice, the staple food of Sri Lankans.
With the Sri Lankan government offensives against the Liberation Tigers of Tamil Eelma (LTTE) to capture Vanni yielding no results, the continuing war is putting a heavy burden on the island nation’s fragile economy.
According to the Colombo Consumer Price Index (CCPI), the current rate of inflation in Sri Lanka is a dizzying 24 per cent. Even the revised index (CCPIN) estimates it at 21.6 per cent. On both counts, it is significantly higher than in other countries in the region, where the rates of inflation vary between 5 per cent and 7 per cent.
Adding to that the rain came down heavily in March - a usually a dry month during which the rice is harvested. Tens of thousands of paddy land went under water with thousands of farmers becoming destitute overnight, unable to reap the harvest. This has created a severe shortage in supply and led to price hikes.
Spiraling Prices
According to The Island newspaper, the average increase in the price of rice varieties in Sri Lanka is 68 per cent. For example, the price of parboiled imported Indian rice has gone up from SLRs.40 to SLRs. 85 per kg in only a few weeks. Prices are expected to further rise because of an increasing local shortage due to bad weather, unwise import policies and increasing world prices.
One shopper said the kilo of local rice which she bought at Rs 80 last month was being sold at Rs 112. The imported Indian rice, which two months ago fetched, a price of Rs 60 a kilo in Colombo's retail markets is now sold at Rs 100 — and the stocks are fast vanishing.
The government is confident that it will not allow the situation to get out of hand. However traders are not so confident and predict that the prices will go up further in the coming weeks.
Government Mismanagement
Rice merchants blame the government for the current crisis. They say timely imports from neighboring India would have saved the country from the present plight.
According to them, the government should have placed orders with foreign suppliers (ideally from India) when prices were low and a rise was on the cards.
In a last minute attempt to take control of the situation, the government this week began forcing traders to sell at prices it had fixed.
Consumer Affairs Minister Bandula Gunawardena told the BBC that selling above the price limit is prohibited under the Consumer Protection Act.
However traders are not happy with the move and they shut down Colombo’s wholesale market on Thursday in protest against the new, uneconomical administered prices.
Interference in private trade by the Mahinda Rajapaksa government in recent times has harmed the economy and social welfare, traders added.
The controlled price of a 65-kg sack of “samba” rice is now SLRs.4030, but the purchase price is SLRs.5400, traders point out.
"The government has taken a hasty decision without consulting us," the president of the Old Moor Street Traders' Association, K Palaniandi Sunderam, said.
"We can't sell at the price that the government is imposing because we have bought the rice already at a higher price."
He also said the country's civil war was having an effect on supplies, with restrictions on movement meaning that the harvest from the north could not reach the south of the island.
Gunawardena rejected the suggestion that there was a rice shortage in Sri Lanka and said it was a propaganda campaign that was launched before the New Year by "groups with vested interests" to artificially increase rice prices.
Whilst Gunawardena added that traders were free to import any amount of rice, without tax, from any country, a desperate Sri Lankan government pleaded with India, Pakistan and Myanmar to sell some rice.
Hunger hotspot
The World Food Programme in a recent report listed Sri Lanka among eleven countries identified as "hunger's global hotspots". The other countries on the list are Afghanistan, Chad, Democratic Republic of Congo, Ethiopia, Iraq, Syria, Kenya, Somalia, Sudan and Zimbabwe.
Rise in food prices is worrying because food accounts for 80 per cent of household expenditure in Sri Lanka. An average family has to spend as much as SLRs.4,000 ($37) per month on rice alone, making it unaffordable.
Many may have to resort to cutting down on food, but this will only worsen the already worrying nutritional status of the population.
According to the Department of Census and Statistics, only half of Sri Lanka’s total population of 20 million receives the minimum daily intake of 2,030 calories. The actual intake is 1,696 calories per day in the case of the poor, and 2,194 in the case of others.
But according to the UNICEF, 14 per cent of children under the age of five show signs of wasting or acute undernourishment, and 29 per cent are underweight.
We need your support
Sri Lanka is one of the most dangerous places in the world to be a journalist. Tamil journalists are particularly at threat, with at least 41 media workers known to have been killed by the Sri Lankan state or its paramilitaries during and after the armed conflict.
Despite the risks, our team on the ground remain committed to providing detailed and accurate reporting of developments in the Tamil homeland, across the island and around the world, as well as providing expert analysis and insight from the Tamil point of view
We need your support in keeping our journalism going. Support our work today.
