What Is Happening in Sri Lanka?

Meanwhile, back in Sri Lanka… the country is falling apart. The people have mounted a real insurrection. The president has fled the country. Bad things are happening in Sri Lanka.

To understand why, we turn to Michael Shellenberger, writing at Common Sense via Maggie’s Farm. Evidently, Shellenberger is an activist journalist-- which journalist today is not?-- so if you are so inclined you may refer to this New York Times article, which places the blame in the Sri Lankan government’s embrace of the Green New Deal.

That is, it followed the dictates laid down be Western environmentalists, which promoted ESG, Environmental, Social and Governance investment.

As it happens, Sri Lanka scored very high on the ESG scale. As did Ghana, which current has the same problems with famine and blackouts as does Sri Lanka. European countries with high ESG scores are currently running out of energy, facing rolling blackouts and shutting down industry. Some of it surely has to do with the tough sanctions policy that Europeans placed on Russia, but some larger part has to do with replacing fossil fuels with more sustainable energy sources. Which means, as the people of Texas are currently discovering, shutting down energy production. 

Shellenberger writes:

The underlying reason for the fall of Sri Lanka is that its leaders—starting with former President Maithripala Sirisena and continuing with his successor, the recently deposed Gotabaya Rajapaksa—fell under the spell of Western green elites peddling organic agriculture and “ESG,” which refers to investments made following supposedly higher Environmental, Social, and Governance criteria. Sri Lanka has a near-perfect ESG score of 98—higher than Sweden (96) and the United States (51).

How do you get a high ESG score? Well, you stop using fertilizers and pesticides. Unfortunately, these policies destroy your agricultural production, causing people to starve:

What does having such a high ESG score mean? In short, it meant that Sri Lanka’s two million farmers were forced to stop using fertilizers and pesticides, laying waste to its critical agricultural sector.…

For your edification, I quote the New York Times report:

One of the president’s next moves, in 2021, was to ban foreign-made fertilizer. Mr. Rajapaksa argued that the policy — billed as a push toward organic farming — was better for human and environmental health. Critics pointed out that stopping those imports would help shore up the country’s foreign-exchange reserves.

The policy was disastrous: Farmers were ill prepared for the change, and crop yields plummeted. That led to soaring food prices, which were already rising because of the pandemic, and led to worries about shortages. The fertilizer ban was lifted before the end of the year, but the reversal was too late to save the next harvest.

Soon, for many Sri Lankans, food and fuel were either impossible to find or too expensive to buy. The country was moving from a debt crisis to an all-out economic collapse. Daily life was upended with rolling power cuts, people waiting in lines for hours to buy fuel and cooking gas, and abrupt halts to public transportation.

Shellenberger notes that other factors entered the equation:

To be sure, there were other factors behind Sri Lanka’s fall. Covid lockdowns and a 2019 bombing hurt tourism—an industry that usually generates between $3 billion and $5 billion a year. Sri Lanka racked up huge foreign debt, with China lending the country billions of dollars as part of its Belt and Road initiative. Transportation costs have rocketed 128 percent since May due to rising oil prices. And overall trends have not helped: Since 2012, growth has been declining.

But the biggest problem was Sri Lanka’s chemical fertilizer ban, which passed last year and was central to the country’s effort to comply with ESG.

The numbers are shocking.

 

One-third of Sri Lanka’s farm lands were dormant in 2021 due to the fertilizer ban. Over 90 percent of Sri Lanka’s farmers had used chemical fertilizers before they were banned. After they were banned, an astonishing 85 percent experienced crop losses. Rice production fell 20 percent  and prices skyrocketed 50 percent in just six months. Sri Lanka had to import $450 million worth of rice despite having been self-sufficient just months earlier. The price of carrots and tomatoes rose fivefold. All this had a dramatic impact on the more than 15 million people of the country’s 22 million people who are directly or indirectly dependent on farming. 

Things were worse for smaller farmers. In the Rajanganaya region, where the majority of farmers operate two-and-a-half-acre lots, families reported 50 percent to 60 percent reductions in their harvest. “Before the ban, this was one of the biggest markets in the country, with tons and tons of rice and vegetables,” one farmer said earlier this year. “But after the ban, it became almost zero. If you talk to the rice mills, they don’t have any stock because people’s harvest dropped so much. The income of this whole community has dropped to an extremely low level.”

But the damage to tea was the key to Sri Lanka’s ruin. Before 2021, tea production generated $1.3 billion in exports annually. Tea exports paid for 71 percent of the nation’s food imports before 2021. 

The fertilizer ban, starting in April 2021, changed everything. Four months after the ban took effect, the president, realizing that things were not going according to plan, lifted the ban on the import of chemical fertilizers—and then, two days later, reinstated it. 

The results have been devastating and widely predicted by tea farmers, with exports crashing 18 percent between November 2021 and February 2022—reaching their lowest level in more than two decades.

“We don’t have enough chemical fertilizers,” Rajapaksa admitted in December 2021, “because we didn’t import them. There is a shortage.” 

In May 2022, Sri Lanka failed to pay $77 million on its foreign debt repayments. That may seem like a small sum in the bigger scheme of things, but the default made it hard for Sri Lanka to borrow money. So, it devalued its currency, inflation rose 30 percent, and the government ran out of the cash it needed to import fuel, food and medicines.

It makes you think twice about environmentally friendly policies. And yet, the great minds of the West, enamored with ESG, and having launched a crusade to save the planet, do not seem to care about what happens to countries that follow their policy prescriptions:

Progressive economists, along with the World Bank, the World Economic Forum, and other globalizing institutions, have since promoted “sustainable” agriculture and tourism for poor and developing nations like Sri Lanka. “Given its education levels,” wrote progressive economist Joseph Stiglitz for the World Economic Forum in 2016, “Sri Lanka may be able to move directly into more technologically advanced sectors, high-productivity organic farming, and higher-end tourism.”

It was into this context that Sri Lanka went organic. 

In 2015, then-President Sirisena announced plans for a “toxin-free nation.” President Rajapaksa, who came to power in 2019, built on this theme. He called for a return to the pre-Green Revolution days—demanding the use of biofertilizers and drawing on superstitious claims that farm chemicals caused kidney disease.

Rajapaksa was elected on a platform to transition the nation to organic agriculture over a 10-year year period. “Sustainable food systems are part of Sri Lanka’s rich sociocultural and economic heritage,” he told a U.N. summit. 

In December 2020, Sri Lanka’s environment minister announced a government program to save the planet from “our own geoengineering misuse, greed and selfishness” before a conference on cutting nitrogen fertilizer waste. It was part of a broader effort by the Sri Lanka government to seek the blessing of Western banks and the UN under so-called ESG goals. 

Then, in April 2021, the government made good on its pledge by banning chemical fertilizers. 

Clear enough? Hopefully, other nations will learn the lesson. One suspects that they are not. After all, they bow down to the authority of a Swedish schoolgirl, so when it comes to saving the environment, starving people do not count.