Coming after a year-long lockdown of the global economy, as the healthcare sector struggled to contain the more harmful effects of SARS-CoV-2 (the virus that causes COVID-19), Russia’s invasion of Ukraine earlier this year was always going to be fraught. In the end, by cutting off access to major supplies of wheat, grains and some commodities from the region, it has piled on price pressures globally.
The World Bank has warned of a growing threat of access to food for hundreds of thousands of vulnerable people across the world, but especially in emerging economies. Beyond that, the global response, although not as coordinated as that to the pandemic, has hurt. Across economies, central banks have hiked their benchmark rates precipitously as most try to deal with unprecedented levels of inflation.
Again, emerging and frontier economies have been at the wrong end of tightening monetary conditions. Rising yields on dollar-denominated assets have diverted investment away from them, the same way as it has exerted downward pressure on their currencies, while raising the cost of their debts. It was to be expected, in these circumstances, that a number of countries would tread deep waters.
In Sri Lanka, however, the crisis that has had thousands of protesters invade and occupy major public office and residential spaces is largely of a local vintage. Gotabaya Rajapaksa’s (president until he fled the country on a military plane) decision to ban fertiliser imports for…