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Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

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Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#121

Post by manquer »

thematrixturtle wrote: post #72
lanstin wrote: post #32

Earlier quoted context omitted.

The Rajapaksa family gave out jobs based on nepotism not expertise, and weren’t the sharpest knives in the drawer. It is completely insane policy, as was flatly running out of currency before doing anything about it. It will be a long road to recovery. At least they have kicked out the family from the government, and have a pretty solid plan to reverse the authoritarian sections of the constitution put in place by th…

The immediate problem is that the entire legal order of succession (PM, president, Speaker etc) are Rajapaksa cronies who are busily getting the hell out of Dodge^W Colombo, so it's not at all sure who is going to form or lead the next government. There are also a lot of unresolved tensions left over from the vicious civil war that devastated the island for decades, so it's sadly possible that things take a turn for…

not just cronies, relatives , even the Speaker is family member.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#122

Post by JetAlone »

blackoil wrote: post #107
itsbits wrote: post #49

Earlier quoted context omitted.

Lol.. Islamophobia started after bombings. These leaders were there way before. Don't just link all political issues to Islamophobia.

2019 elections are won post Easter bombings. They were there before but the super majority they were able to get is because of Islamophobia.

Right, the explosive event where the "easter worshippers" (so-called because the media was allergic to calling them Christians) became un-alived; Muslims most effected.

Maybe churches will need to install the kind of security fixtures commonly found furnishing synagogues in Europe. It generally does the job of keeping pathetic misanthropes who think it's good to bomb religious communities out on the curb where they belong, to issue empty threats and get carried away to a nice new home.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#123

Post by croes »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

Seems like the switch wasn't about chemical fertilizer vs organic fertilizier but imported fertilizer vs local fertilizer.

"When Sri Lanka's foreign currency shortages became a serious problem in early 2021, the government tried to limit them by banning imports of chemical fertiliser.

It told farmers to use locally sourced organic fertilisers instead."

https://www.bbc.com/news/world-61028138

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#124

Post by tbrownaw »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

> Any level headed person, forget a politician, would want to

Maybe this is just a result of things being filtered for newsiness, but a lot of our politicians seem to be not so level headed a lot of the time.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#125

Post by lottin »

bradleybuda wrote: post #100
ktaylora wrote: post #39

Earlier quoted context omitted.

There's a premium that can be exacted from switching to organic agriculture that isn't be discussed in this article. Sri Lanka has a limited land mass available for food production and they mostly export commodities to other countries. We're talking ~25,000 sq-mi. For context, the US state of Kansas is ~82,000 sq-mi. If you cannot physically expand the footprint of agriculture in Sri Lanka to boost revenues, the thin…

That's the nice thing about free trade and free markets - everyone is running a decentralized version of that experiment and incrementally updating the data live. If you make both paths available (organic vs fertilizer) and let the farmers whose livelihoods are on the line choose, then they are very likely to make the best choice.

The best choice for farmers isn't necessarily the best choice for society as a whole.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#126

Post by wesleywt »

nostromo wrote: post #40
kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

This is a common feature of dictatorships: a boneheaded decision from a central government wreaks havoc on the people in the field that would know better. It reminds me of Mao ordering all sparrows be killed because they eat agriculture seeds. This of course caused a much bigger crisis with insects destroying crops - because everyone knows sparrows also eat lots of insects.

This was populalism with a dose of nationalism. Not a dictatorship, more in vain of Trumpism.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#127

Post by lanstin »

yunohn wrote: post #102
lanstin wrote: post #14

Earlier quoted context omitted.

As the article notes the government forced the food production to go all organic in one year with no plan, yields crashed, and now they have to import even rice. It sustained itself thru tourism and local food production. They have sold tea overseas since being a British colony. Also, another factor is they have to import all their medicines and oil, which is also dependent on foreign reserves. So now not enough food…

> Dilmah tea to help, Hand made Batik shirts In my experience, exported goods provide very little profit to the original manufacturer. The middle layers greedily absorb all the profit. In fact, in the west, labor costs to stock/sell it in the supermarket are significantly higher than what the manufacturer made for their effort. Instead, I’d really recommend donating the money to an action group or trusted charity, id…

It is hard to do from the US. I can donate directly to my family and have them give to local aid groups but have not been able to donate directly except to groups that have a US presence (and no doubt much higher aid overhead).

But longer term, having Sri Lanka goods be valued on the world market will help the island. Dilmah employs a lot of people on the island.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#128

Post by anu7df »

lkrubner wrote: post #87
nostromo wrote: post #30

Earlier quoted context omitted.

> The US is actually lucky to understand this at the deepest levels of policy and law making, with massive aid packages to prevent total collapse. The current inflation crisis suggests that even the US economy can reach its limit with endless money printing and stimulus. With the cost of borrowing going up, the executive and congress are going to start feeling pressure to cut spending or dramatically raise taxes.

The current spike in inflation is a world-wide phenomena, effecting every country on Earth, and therefore it seems unlikely to have much to do with the USA's creation of new money. The USA printed trillions of dollars of new money after 2008 and yet inflation remained very low for the next decade. If, now, the USA's printing of money is having some new effect, you have to explain why Argentina, South Africa, India, V…

The current spike did not happen by chance or out of the blue. This is the result of worldwide efforts to limit the fallout of the 2008 financial crisis. To the extent that it was possible a lot of the countries followed the US in enacting liberal low cost lending. US of course with the mighty dollar was able to print a far more and pump far more into their economy than other countries. But many other countries followed with similar efforts. Also the newly minted dollars don't just sit in the US. I would say a lot of inflation in India is driven also by cheap VC money that flooded the Indian market in the last decade. Turns out if you dump a super duper amount of money into the economy inflation goes up. Who knew!!? As for the delay of a decade for this to kick in, my theory is that the supply took that time to really hot the market because only a few uber rich made the most of this liberal printing frenzy and the bottleneck delayed the eventual overheating of the market.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#129

Post by drdeca »

krainboltgreene wrote: post #86
ethbr0 wrote: post #78

Earlier quoted context omitted.

Sometimes I think a huge percent of communism's economic overhead is simply everyone having to remember another dictionary's worth of current communist truths. To the extent they have less mental free space to actually do work. Even in abridged form... that's a lot. https://campbellmgold.co.uk/archive_definitive/red_book_chai...

it's two words man

Huh?

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#130

Post by hahaitsfunny »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

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