By Jim Geraghty
Monday, July 11, 2022
Back in March, as the world was still watching the
Russian invasion of Ukraine, Reuters filed an ominous dispatch from Sri Lanka about the consequences
of its government’s attempt to ban the use of artificial fertilizers:
“I cannot recall any time in the
past when we had to struggle so much to get a decent harvest,” said [W. M.]
Seneviratne, a lean 65-year-old with a shock of silver hair, who has been
farming since he was a child.
“Last year, we got 60 bags from
these two acres. But this time it was just 10,” he added.
The dramatic fall in yields follows
a decision last April by President Gotabaya Rajapaksa to ban all chemical
fertilizers in Sri Lanka – a move that risks undermining support among rural
voters who are key to his family’s grip on Sri Lankan politics.
Although the ban was rolled back
after widespread protests, only a trickle of chemical fertilizers made it to
farms, which will likely lead to an annual drop of at least 30% in paddy yields
nationwide, according to agricultural experts.
A month later, the Guardian’s correspondent sent back a dispatch
with similarly grim warnings:
“We are a tropical country full of
rice paddies and banana plantations, but because of this stupid fertilizer ban,
now we don’t even have enough food to feed ourselves,” said Rajith Keerthi
Tennakoon, 52, former governor of the southern province. “We have had past
economic crises, security crises, but never in Sri Lanka’s history have we had
a food crisis.”
But the Guardian being the Guardian,
it had to add a paragraph insisting that a ban on artificial fertilizers was
good in theory:
On the face of it, a push to
organic farming would be seen as laudable, given concerns over the use of
chemical fertilizers. Yet it was the sudden and obtuse manner in which the ban
was introduced — imposed virtually overnight and with no prior warning or
training – and the questionable motives behind it, that have left even organic
farming advocates furious.
Sri Lanka is a small island nation off the coast of
India. When Hollywood needs a jungle, it films there. The
Bridge on the River Kwai, Indiana Jones and the Temple of Doom,
and one of the Jungle Book movies all included scenes shot on
the island. It is about as far as a country can get from the United States, and
when news about the country has reached Americans, it was usually bad news —
such as the government’s long battle against the Tamil Tigers terrorist group, or the devastating 2004 tsunami.
Yet with the Tamil insurgency defeated, in the past few
years, Sri Lanka had begun to look like a success story by the standards of the
region. As our Dominic Pino laid out:
By 2019 it had been elevated from a lower-middle-income country to an
upper-middle-income country by World Bank classifications. Its GDP per capita, adjusted for purchasing power, is about
double that of India, about the same as the poorer countries of Eastern Europe
such as Ukraine and Moldova, and only slightly behind Brazil. Its largest city
of Colombo had become a tourist destination. It’s not a wealthy country by any
stretch of the imagination, but it was doing well for its neighborhood, and its
22 million inhabitants saw a dramatic improvement in their quality of life in
the past decade.
But everything fell apart fast: Inflation is raging out
of control, the government defaulted on its debts, an energy crisis led to
rolling blackouts, and the food shortages spurred massive crowds of people to
storm into the houses of the country’s wealthy rulers and effectively topple
the government. Inflation in Sri Lanka has reached jaw-dropping levels:
“Consumer prices rose 54.6 percent in June from a year earlier, with transport
surging 128 percent from the previous month and food 80 percent.”
Back in May, I noted that the Russian invasion of Ukraine
meant that two of the world’s biggest grain exporters were effectively taken
out of the market, as well as Russian exports of fertilizer. I also said:
The global fertilizer shortage is
likely to reduce crop yields in a lot of places, which means we may be dealing
with a worse problem in the coming months and years. Using less fertilizer
usually translates into fewer crops. . . . Hungry people do things that
well-fed people do not. They protest and they riot. Hungry people move across
borders as refugees. They are more easily recruited into terrorist or extremist
groups. . . . Hungry populaces are more likely to turn to demagogues promising
an easy solution. Where there is hunger, there is conflict.
Back in early June, when very few Western minds were
paying much attention to Sri Lanka, Dominic wrote an unnervingly prescient
piece entitled, “Sri Lanka’s Collapse and the End of Globalization”:
Coming out of the pandemic, Sri
Lanka was counting on the return of tourism, a vital industry to the island
country with many beaches on the Indian Ocean. One problem: The
first- and third-largest tourism markets for Sri Lanka were Russia and Ukraine. Russia is also a major buyer of Sri
Lankan tea. The realities of the war and the sanctions on Russia have upended
that plan. . . .
Protesters are in the streets, some of them setting
politicians’ homes on fire, and police used tear gas to disperse them. Parkin
writes that there are miles-long lines for gasoline, and some people are only
eating one meal per day.
Sri Lanka’s default may just be the
start of a wider financial crisis in the developing world as a result of
worsening global economic conditions. The country had the disadvantage of
exceptionally poor leadership and bad timing of the pandemic and the war in
Ukraine. But poor leadership is common in the developing world, and less robust
economies are especially susceptible to bad luck.
Countries are economically
connected in strange ways. In many cases, those connections only become widely
known in hindsight, after a crisis has made them obvious. It would be an
overstatement to say that fewer Russians and Ukrainians going on vacation
plunged Sri Lanka into crisis, but that seemingly innocuous fact was one of
many contributing factors. Those in the prosperous West who are cheering for
the end of globalization should be careful what they wish for.
And as the Wall Street Journal warns this
morning, there are other debt-ridden countries that are probably not too
far from Sri Lanka’s dire position:
Countries such as Zambia and
Lebanon are already in the grip of crises and are seeking international help to
provide loans or restructure their debts, while Pakistan’s new government,
which came to power in April, says that it narrowly averted a debt default in recent weeks,
driven by a soaring fuel-import bill. Foreign-exchange reserves held by the
central bank dwindled to cover less than two months’ worth of exports, largely
closing off Pakistan’s prospects of tapping international financial markets.
China, a close ally, provided a $2.3 billion loan in June to shore up the
foreign-currency reserves.
Bloomberg News adds El Salvador, Ghana, Egypt, and Tunisia to
the troubled list.
But Pakistan stands out, as that country has an estimated 165
nuclear weapons. One Indian business publication’s assessment of the Pakistani
economy reads like a horror show, and it explicitly compares that country
to Sri Lanka: runaway foreign debt; skyrocketing cost of foreign imports; a
collapsing currency; falling exports; shortages of food, fuel, and medicines;
hoping for rescue from the International Monetary Fund but having no
negotiating leverage; and a recovery plan that relies on people drinking less
tea and exporting donkeys to China.
You would like to think that a country with a large
nuclear arsenal would also know how to manage its borrowing, pay its debts, and
keep its economy running smoothly. Then again, there’s probably some Pakistani
out there wondering how an American could have the nerve to make that
criticism.
Meanwhile, Down in Georgia . . .
It is hard to shake the feeling that Herschel Walker is
going to be a disappointing nominee for Republicans in the Georgia Senate race.
No one expected that a former college- and pro-football superstar to be a
policy wonk fluent in the details of every federal-government decision, but Walker’s
answers to policy questions are generic at best, and there are ominous indications that even his own staff is exasperated with
him.
The Data for Progress survey released last week that
found Walker two points ahead of incumbent Democrat Raphael Warnock was
the first poll to put Walker ahead since April.
But if you’re looking for a reason to dismiss or pooh-pooh the
Quinnipiac poll from late June that had Warnock ahead by ten . . .
look back at the 2020 Senate race in next-door South Carolina. Back then, both
Georgia and South Carolina were heavily Republican southern states, but
Democrats thought that they had a perfect challenger for long-time incumbent
Lindsey Graham in former state-party chair Jamie Harrison. A bunch of polls gave Graham a modest lead of a few percentage
points, but Quinnipiac showed a tie three times — in July, in early September,
and in late September.
On Election Day 2020, Graham won by more than ten
percentage points. Either Graham enjoyed a late surge, or Quinnipiac’s sense of
the electorate was way off. (Quinnipiac’s last presidential-race poll had Trump
leading in South Carolina by just a percentage point, 48 percent to 47 percent.
On Election Day, Trump won, 55 percent to 43 percent.)
It’s not a perfect comparison — Warnock is an incumbent,
Harrison was a challenger — but it does suggest that Quinnipiac consistently
includes too many Democrats in their samples. The Georgia Senate race is not a
slam-dunk for Republicans, but it isn’t likely that Walker is trailing by
double digits.
The Civiqs poll currently puts Joe Biden’s approval rating in
the state of Georgia at 25 percent, with 63 percent of respondents
disapproving.
Asking a Senate Democratic incumbent to run 20-some
percentage points ahead of the approval rating of the current Democratic
president is a really tall order.
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