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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

#181

Post by vishnugupta »

clarionbell wrote: post #169
InvertedRhodium wrote: post #143

Earlier quoted context omitted.

Are there any examples of western nations taking control of power grids, ports, etc, when those loans are defaulted on?

It used to be, mind you some decades ago, a normal policy for foreign government to keep what they have payed for. Take Panama or Suez canal. That being said, the practice is essentially colonialism and for various reasons it became taboo in the west. Publicly that is. If you are private company there is still a lot of things you can get away with, but you won't get gunboats to show up anymore. Simply put. China is d…

> West has....abandoned it as a policy.

Has it though? They don't do it overtly but through IMF. When a debt ridden country approaches IMF for help that help comes with heavy strings attached such as cutting down social spending, and privatisation. And IMF is controlled by ex-colonial nations. Even a developed nation like Greece got a taste of it. The funny thing is through a debt ridden country IMF is in fact helping debtors who are mostly western entities.

There are quite a few layers here to peel but safe to say west hasn't abandoned their policy just that they outsourced it to IMF.

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

#182

Post by pjc50 »

soldehierro wrote: post #22
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…

Believe me, the organic transition had nothing to do with agricultural practices and all to do with economics, with the logic being that fertilizer was an expensive import, and by banning fertilizer they could hemorrhage foreign exchange reserves a little less. Of course, they also earned a lot less because the bone-headed transition lead to a marked reduction in yield, only worsening the forex problem the ban of agr…

A phrase to remember: "Exports are made out of imports". Almost every export industry depends on an import in its production chain somewhere, which is why trade wars and sanctions are so destructive. Import-substitution planned economies have to be very clever about how they approach this to get it to work.

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

#183

Post by Simon321 »

oblak wrote: post #167

When an entity fails this hard and the internet I consume is suddenly flooded with articles about it, I can't help but think: ok, who fucked them over? Who are the biggest "friends" of Sri Lanka? The US, China? Who profits from a weaker Sri Lanka. That's the real question. I know this site has people from all over, so I'd love to read more from the people who are NOT on the other side of the world.

This is something i see a lot in conspiratorial thinking, you can't believe a government would be so incompetent, so somebody MUST be behind it and have caused this maliciously. Never attribute to malice that which is adequately explained by stupidity.

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

#184

Post by alams »

There are many countries who are next in line may be a bit more more self sufficient and with relatively less bigoted people.

Everything starts when people elect leaders based on hatred instead of good governance. Citizens of Srilanka or any of the countries that may follow the same step cannot just blame this cronies and escape. People needs to self realize their part.

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

#185

Post by thaumasiotes »

It seems weird to me to describe this as a "currency crisis". The post pretty plainly describes an actual crisis:

> Production of tea -- Sri Lanka's main cash crop -- fell by 18% in a year. Production of rice -- the main food crop -- fell by even more.

The problem isn't the currency.

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

#186

Post by sacrosancty »

hunglee2 wrote: post #151
nostromo wrote: post #40

Earlier quoted context omitted.

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.

'bad government must be authoritarian' meme is interesting to observe, as if it is impossible for bad governance to occur in democratic systems. Sri Lanka clearly is a democracy, albeit a degenerate one

No post body was provided.

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

#188

Post by pjc50 »

epistasis wrote: post #53
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…

I've been reading a lot of Soviet history lately and it provides a source of a huge number of similar agricultural disasters. Both Russian and Chinese attitudes towards agricultural peasants has been that they are dispensable humans, and it shows in how these countries have had disasters: * collectivitzation leading to the Holodomor in Ukraine, mass famine in Kazakhstan, and hunger throughout the USSR, killing millio…

> Both Russian and Chinese attitudes towards agricultural peasants has been that they are dispensable humans

You can see elements of this in the West as well: agricultural work is often done by precarious non-citizens, and every now and again an entire semi-trailer of these people being imported turn up dead.

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

#189

Post by trhway »

croes wrote: post #123
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

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

it is a bit moot point as organic fertilizer can't be practically transported/imported for any significant distance.

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

#190

Post by [deleted] »

socialdemocrat wrote: post #75
rlt wrote: post #55

Perhaps a dumb question: why does every little country need its own currency? Are they all just addicted to printing money? Ignoring the volatility and environmental concerns, why shouldn’t all these small to medium-sized countries standardize on a cryptocurrency?

Having your own currency is what lets you adjust the exchange between your country and another one. You should never use a currency you don’t control or cannot influence in any way. That sets you up for disaster.

[deleted]
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