Sri Lanka: Amid deepening economic crisis, Lankans escape to India for survival

The Indian Coast Guard on Tuesday took into custody six Sri Lankan nationals including three children, all residents of Jaffna and Kokupadaiyan in the northern region of the island nation, from an island near Rameshwaram in Tamil Nadu, media reports said.

The apprehended individuals were reportedly escaping unemployment and food shortage, said the reports.

Fuel shortage has peaked to the extent that the Sri Lankan government ordered troops to petrol station on Tuesday as  protests erupted in several places where thousands of motorists had been lining up daily for scarce fuel, news agency AFP reported.

According to the report, three elderly people have died while waiting in queues for the fuel ince Saturday, police have said.

As the country's foreign exchange reserves nosedived, deepening, causing inflation and a shortage of essential supplies.

The AFP report stated that soldiers were deployed after angry crowds blocked a main road in Colombo venting their anger as they were unable to buy kerosene on Monday, government spokesman Ramesh Pathirana said.

A group of angry women blocked a tourist coach to protest shortages of kerosene needed for cooking stoves, social media videos have showed.

"We saw tourists being held up, we are also hearing that some people may be hoarding oil and that is why the government decided to deploy the military," Pathirana told reporters in the capital, the report stated.

Tourism accounts for 10 percent of Sri Lanka’s GDP and is a significant source of foreign exchange. More than 200,000 people lost their livelihoods in the travel and tourism sectors, according to the World Travel and Tourism Council.

The 2019 serial bomb blast across Colombo during Easter had already hit the country's tourism sector hard, directly affecting the economy and forex reserves. The pandemic only worsened the crisis.

The forex reserves fell to $ 2.8bn in July of 2021 from over $7.5bn in 2019, which further caused the erosion of the value of the Sri Lankan rupee by 8 percent in 2021.

Sri Lanka owes $ 5 billion in loans to China while it had only $1.58 billion worth of forex reserves available in November. Last year, it took an additional $1 billion loan from China to meet its immediate financial needs. It owes money to many other countries and organisations, including India and Japan. This year, the South Asian nation has to pay back $6.9 billion.

China refused to assist Sri Lanka which appealed to reschedule its huge Chinese debt burden in the face of the COVID-19 outbreak that has adversely affected the tourism sector, the Hong Kong post has reported.

India had on March 17 announced a USD 1 billion line of credit to Sri Lanka for procurement of food, medicines and other essential items during Sri Lankan Finance Minister Basil Rajapaksha's two-day visit to India.

Last month, India extended $500 million credit line to Sri Lanka to buy fuel as the island nation grapples to tide over its worst financial criss in decades.

President Gotabaya Rajapaksa has said that Sri Lanka will seek an International Monetary Fund bailout to battle the crisis.

He said last week that IMF help was needed to secure "a new method" to repay external debt and sovereign bonds this year with around $6.9 billion needed this year for debt servicing, news agency AFP reported.