Baltimore Sun

Out of cash, but not out of patience

Sri Lankans rely on ingenuity, donors to stave off anarchy

- By Mujib Mashal, Emily Schmall and Skandha Gunasekara

COLOMBO, Sri Lanka — The queues are ubiquitous — and orderly.

To get a little less than 1 ½ gallons of gasoline, auto-rickshaw drivers wait calmly in line for as long as five days. People have been queuing up for cooking gas, milk powder, and meals at soup kitchens, without fights or friction. Each day essential workers, in hospitals, sanitation, post offices and banks, tolerate cramming into buses, one of the only means of transport with an assured supply of fuel.

“Without hanging? It’s 110 people,” bus driver M.P.L.K. Saman, 32, said about the number of passengers he packs in for the 15-mile journey between Colombo and Dompe in the east. “With hanging, 150 people.”

The country is running on patience, even as the political and economic crisis intensifie­s.

Former President Gotabaya Rajapaksa went into hiding after protesters stormed his residence and office last week. He later fled on a military plane.

A fuel shortage, rising global food prices and the shock of erratic climate patterns, compounded by crushing policy mistakes and the coronaviru­s pandemic, have created a crisis with no easy solution.

“Look no further than Sri Lanka as a warning sign,” said Kristalina Georgieva, managing director of the Internatio­nal Monetary Fund. “Countries with high debt levels and limited policy space will face additional strains.”

But Sri Lanka might be unique in one thing: The

rage at the failure and corruption of a ruling elite has been matched by generosity and ingenuity to prevent complete collapse and anarchy. Hospitals are still functionin­g. Sanitation trucks still roam the city’s neat streets, even if less often. The three-hour power cuts are announced in detailed schedules a day ahead.

At the peak of the anger this month, thousands stormed the president’s mansion and several other top government buildings. But soon after, Sri Lankans went back to queues, waiting outside the palaces for their turn to get a peek.

The country is increasing­ly dependent on the goodness of others: donors, lenders — really any person or institutio­n with the funds to help.

To bridge the gap in medical supplies, hospital administra­tors

often put out lists of needed supplies and mobilize donations. At the Lady Ridgeway Hospital, where the country’s sickest children come for heart surgeries, kidney transplant­s and other complicate­d procedures, 40% of their essential medicine and surgical equipment comes from donors abroad.

Every week, the hospital posts a list of needed items on its website and a link to its charity account. Dr. G. Wijesurija, the hospital’s top administra­tor, said that the hospital had not lost any patients because of the country’s shortages.

“But if the donors were not here, we would have to compromise our services,” he said.

The government itself is scrounging for what it needs. Sumila Wanaguru, an economist at Sri Lanka’s central bank, analyzes cash flow

each day to determine what can be spared.

Tourism and remittance­s — Sri Lanka’s main sources of foreign currency — have largely evaporated. When the government ran out of money to import the essentials last spring, it tapped the central bank’s reserves, which in recent months have hovered around zero.

Wanaguru, director of the internatio­nal operations department, and others at the central bank have had to beg and plead for lines of credit, debt deferments and currency swaps to get the hundreds of millions of dollars needed every month to import the bare minimum to keep the country afloat.

Officials have forced exporters to exchange a portion of their profits in foreign currency to the bank. When the World Bank gave the government $130 million for a

cash transfer program to the country’s poorest, Wanaguru swapped the money for rupees, adding U.S. dollars to the bank’s reserves.

“We are running the country without foreign exchange inflow,” she said.

After rating agencies downgraded Sri Lanka’s debt last spring, some suppliers of diesel and other commoditie­s started demanding upfront payments. The situation has worsened since Sri Lanka defaulted on its debt in May, losing access to capital markets.

Wanaguru must regularly authorize and arrange enormous cash transactio­ns for trade. Import companies meet ships carrying desperatel­y needed fuel at the Port of Colombo with stacks of cash.

“Everybody is looking at the central bank all the time, but it can’t do everything.

That is why we have government and ministries who must sit together and come up with a national plan,” she said. “Let’s hope they learn a good lesson.”

If there is one business flourishin­g, it is the bus business — public and private. But that, too, has required constant troublesho­oting. Transporta­tion problems have become so commonplac­e that radio DJs joke about waiting hours for a bus to arrive, or not making it to work when it never comes.

Officials at the Sri Lanka Transport Board said public and private buses ferry about 1.5 million passengers a day in Colombo and its greater suburbs. The transit board has ensured that the government will provide a separate, steady stream of diesel for public and private buses so that transport does not collapse entirely.

 ?? ATUL LOKE/THE NEW YORK TIMES ?? People board a crowded bus Monday in Colombo, Sri Lanka. A fuel shortage is forcing more Sri Lankans to rely on mass transit.
ATUL LOKE/THE NEW YORK TIMES People board a crowded bus Monday in Colombo, Sri Lanka. A fuel shortage is forcing more Sri Lankans to rely on mass transit.

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