How Putin is exploit­ing the crisis in Sri Lanka

Foto: Imago Images

In Sri Lanka, demon­stra­tors have taken over the pres­i­den­tial palace, partly because the prices of wheat and petrol have risen immea­sur­ably as a result of the war in Ukraine. Russia is now using the crisis to under­mine Western sanc­tions and to win new part­ners in Asia.

The pic­tures from Sri Lanka are shock­ing: People enthu­si­as­ti­cally jumping into the pool of the stormed pres­i­den­tial villa, street protests, and long queues outside shops and petrol sta­tions. The effects of the Ukraine war are par­tic­u­larly evident in this crisis. Rising wheat prices and expen­sive fuel are bur­den­ing the country’s already shaken economy. In Sri Lanka, the domino effect of a once eco­nom­i­cally and glob­ally inter­con­nected world, which is expe­ri­enc­ing supply short­ages due to war and thus polit­i­cal crises, is becom­ing appar­ent. Moscow, of all places, is now trying to act as a helper and con­sol­i­date its influ­ence in the region.

20 million tonnes of wheat are stuck in Ukraine. Part of it should also have been deliv­ered to Sri Lanka if there had been no war and Russia had not blocked exports. Russia and Ukraine together account for almost a third of the world’s wheat exports. The US sees Russia as indi­rectly respon­si­ble for the sit­u­a­tion in Sri Lanka. “We are seeing the impact of this Russian aggres­sion playing out every­where. It may have con­tributed to the sit­u­a­tion in Sri Lanka,” US Sec­re­tary of State Antony Blinken said on Sunday. He called on Russia to release wheat exports in order to avoid similar crises. “What we are seeing around the world is growing food inse­cu­rity that has been sig­nif­i­cantly exac­er­bated by the Russian aggres­sion against Ukraine.”

Chaos has already been looming in Sri Lanka since March. Protests against the gov­ern­ment have been taken place repeat­edly. The South Asian state is expe­ri­enc­ing its worst eco­nomic crisis in 70 years. A lack of tourism revenue due to coro­n­avirus, tax rebates for large com­pa­nies and a high national debt have led to the country being vir­tu­ally insol­vent today. Since the Russian inva­sion of Ukraine, wheat and energy prices have sky­rock­eted, hitting the Sri Lankan economy even harder. The pop­u­la­tion is Par­tic­u­larly affected by the sit­u­a­tion. The announce­ment of Pres­i­dent Gotabaya Rajapaksa’s res­ig­na­tion on Monday was cel­e­brated with fire­works in the capital Colombo. The day before, a mob had stormed the pres­i­den­tial palace and set the Prime Minister’s res­i­dence on fire.

For Russia, this self-gen­er­ated crisis now offers the oppor­tu­nity to expand its own influ­ence. The gov­ern­ment of the island state recently announced that it plans to buy cheap Russian oil. Thus, it is joining other coun­tries in the region that are already doing so. India, for example, bought Russian oil at a dis­count months ago. India‘s finance min­is­ter said that she was putting her country’s energy secu­rity first. In the UN Secu­rity Council, India, like Sri Lanka, has so far refrained from impos­ing sanc­tions, partly because it imports almost 70 per cent of its mil­i­tary equip­ment from Russia and is thus depen­dent on Moscow. China also buys cheap Russian oil. Chinese imports rose by 28 per cent in May com­pared to the pre­vi­ous month. This is not sur­pris­ing, as the Russian-Chinese friend­ship has strength­ened during the war and Russia is now con­sid­ered a “junior partner” of China by ana­lysts. Western sanc­tions are losing their impact due to these new major oil customers.

However, coun­tries buying Russian oil are in a dilemma. On the one hand, they need cheap oil for their pop­u­la­tions, which are far poorer than in Europe. On the other hand, they risk being dis­ap­proved by the West, which sup­ports Ukraine. “These coun­tries will be forced to take sides at the G20 summit to be held in Indone­sia in Novem­ber if they choose Russia and it loses the war,” Peter Timmer of Harvard Uni­ver­sity tells WELT.

But Russia is not only using oil to present itself as a helper in times of need. For example, accord­ing to the Prime Min­is­ter of Sri Lanka, Moscow offered to supply wheat.  Timmer, however, warns that this could lead to greater depen­dence on Moscow. Instead, he sug­gests: “There are enough rice stocks in Asia to get through the next 12 months without a food crisis,” says Timmer. India, China, and the ASEAN coun­tries have the poten­tial to replace 30 million tonnes of wheat with rice. This would slightly increase the price of rice, but the world would have more wheat avail­able, which could avoid famine, espe­cially in poorer coun­tries in North and Sub-Saharan Africa.

Both India and Russia have offered to supply Sri Lanka with wheat soon, accord­ing to the gov­ern­ment. India is doing so despite an export embargo.

 

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