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Out of cash and out of fuel, Sri Lanka runs on patience

Former President Gotabaya Rajapaksa went into hiding after protesters stormed his residence and office last week, and then he fled the country on a military plane.

Residents wait for a bus in Colombo, Sri Lanka, on July 18, 2022. The demographic at the bus stops are changing, in a country where the middle class is on pause. (Atul Loke/The New York Times).

Written by Mujib Mashal, Emily Schmall and Skandha Gunasekara

The queues are ubiquitous — and orderly.

To get 5 liters 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.”

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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, and then he fled the country on a military plane. The Parliament will vote for a successor on Wednesday, and the country is closely watching whether the politicians can put aside their bickering to find a path to economic relief.

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 last week, thousands stormed the president’s mansion and several other top government buildings. But soon after, Sri Lankans went back to queues, patiently 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.

Antigovernment protesters march to demand the resignation of acting President Ranil Wickremesinghe in Colombo, Sri Lanka, on Tuesday, July 19, 2022. President Gotabaya Rajapaksa resigned last week and handed the reins to the deeply unpopular Wickremesinghe, who moved from his role as prime minister and had previously said he would resign. (Atul Loke/The New York Times)

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 open-heart surgeries, kidney transplants and other complicated procedures, 40% of their essential medicine and surgical equipment are 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 in the 1,600-bed facility 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 has to regularly authorize and arrange enormous cash transactions for trade. Import companies meet ships carrying desperately needed cargoes of 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.”

First published on: 20-07-2022 at 12:11 IST
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