packed up, so with a crisis being held by the public and a crisis of confidence being felt by the government. what will become of the 22000000 residents and this bankrupt nation will discuss all that and more coming up. all right, let's get into the ammo me after a series of tax cuts issued by a former president, go to buy a raj, a pox and 2019 followed by allegations of rampant corruption in this political dynasty family. this south asian nation is now facing a crisis. food insecurity is rising. fuel prices are rising, household staples, food products like flour and grain are increasingly difficult to obtain. so to dig a little deeper into this humanitarian issue, facing the island, we are being joined by tomorrow. selah,

coo dean. she is the director of south asia programs at the us institute of peace tomorrow. thank you for being with us. come on a 1st. what is happening in sri lanka, what sort of price increases? are you seeing or are people out of work? i mean, what is day to day life in sri long like since the economy went bust? i mean, i think you're seeing for a middle income country, the economic impact on people is astronomical. they're experiencing inflation, food inflation like they've never seen before. so these are people who are used to being able to find the food. first of all, you aren't able to find it and then it's so expensive, it's very hard to purchase food in stores. second of all, you saw, especially earlier this summer, we saw the long, long lines for petrol, for gasoline. there's restrictions on who could get it and even if people waited

all day, they weren't able to get it. and then on cooking gas. so these are 3 very important things, you know, food insulation was touching 90 percent where people just couldn't afford anything . people couldn't buy patrol, couldn't go to work, couldn't go to school because they couldn't put, you know, gas in their cars or rickshaw drivers. public transport wasn't moving. so you know, this is something that she long and haven't experienced before at this level. so there's really was a dire economic crisis. the country inflation had a staggering 39 point one percent back in may, which led to throngs of protesters taking to the streets. and later the presidential palace forcing out roger pox or who fled overseas, reportedly to singapore. now in 2016, the american ambassador to the un, samantha power, called sri lanka, quote, a global champion of human rights and democratic accountability. how do you find

her comments now after president roger pox was ousted for corruption? i think her comments reflect the shrimp and people and civil society really does champion human rights. i think after the end of the civil war, you've seen complains about civil rights, human rights since 2009 and even before that because of treatment of minorities during the war. now, successive governments, i think you had a unity government at the time when it was trying to have good governance. but since then, the roger boxes, when they've come into power, you know, it's been plagued with cronyism, nepotism, the military taking over most you know, having some military presence or former military officials in almost every role in the civilian government. and so it's been plagued by that sort of corruption. and that is really, i think, remarkable why you saw sri lumpkins of all stripes. stand up, you know,

it's academic crisis, but it's also the political crisis. stand up and demand for go to buy raj asa and his government to leave. and so let's not forget the remarkable nature of the protests to sustain non violent protests that really removed. roger pox says administration while protest have since quelled the new president. renelle rec, my sing, huh. is now in talks with the i m f for a bailout package after the island ran out of foreign reserve currency to pay back its debts. a move, a lot of people have criticized as to opaque and with too many strings attached primarily to the west. the i m. f, visited sri lanka and made promises to restore macro economic stability and debt sustainability while protecting the poor, the vulnerable safeguarding financial stability. and even stepping up structural

reforms to address corruption and those vulnerabilities and unlocks for a long goes growth for potential or potential growth. so for example, food insecurity is rising in the country units that says one out of 4 kids under age 6 in sri lanka are now norrish. now they expect that number to grow as inflation begins to skyrocket. what organizations or countries even are helping the starving children in that country? exactly. this is a country that is not used to this is a middle income country. i think one of the most important things we can do as, as, as i m f, loans and other things come in is think about what other countries can give food, aid and assistance. japan, india. and you know, these are some of the largest countries that can bring assistance. united states has pledged and bite and over the summer pledge, the systems especially for children who we need

a unity of action around the world. this is not going to be only in sri lanka, this high loans, high inflation disruption of world grain production because of the warranty. korean is affecting lots of countries and i think sri lanka is the canary in the coal mine . it is showing you that middle income countries can fall to a place where children are experiencing so much malnourishment. and i think we really need to think about how the world you and especially donor countries can go beyond just loans, but really help in terms of food assistance. sri lanka is also facing an energy crisis. what's causing that and, and how do we put an end to it? i mean, this is a global energy crisis. so you have high energy prices globally because of the war in ukraine. and it is really affecting countries like sure luck of that are ex, important dependent that they have to import and energy and fuel. i think there are

a couple of things. one, obviously is the global prices and inflation. and once you do all as sure, lunk i did, it makes it that much higher to get harder to get credit and to buy fuel and other things. india has come to their assistance in terms of that help them with immediate needs. i think longer term there's also internal problems that she longer has in terms of managing fuel and managing its dependence on external fuel. and so i think you have to do both at the same time, it's solving the economic crisis and helping countries that have are facing the shock of global energy prices. but also thinking about how to better manage internally issue of energy costs. the sri lankan government is also imposing a ban on numerous imports of common goods and products to the country. why are they

doing that? well, i mean, look, you have, you have very little in terms of a foreign reserve. so you have very little in terms of for reserves of dollars. and so a country like sure longer that is largely import dependent has to restrict some sort of of the imports so as not to spend all their dollars before their i am f loon and other loans, excuse me, come through. so this is really crucial that they are cutting back costs. you can see the president vicar missing as new budget is supposed to be cutting costs in terms of spending. that is one way to save reserves, but also you have to limit, especially in terms of luxury goods and other things really limit where you're spending those precious dollars in terms of importing things. so they have to save those that foreign reserve to important things like fuel, like energy, crucial food, stuff that you can't get into. i think in the long term they have to think about,

you know, the tax to g d p ratio but also exports. how can you restart exports in the country so that you actually do have more, a foreign reserves? i think for sure long that those are dependent really on t. it's a big export on tourism, which isn't doing great, and then on remittances. and with a pandemic, all of those things were affected. and of course, mismanagement by the roger. the country suffered a civil war and issues surrounding the tamil tigers. have those wounds healed, and do you think all parties can come together now to prevent and even greater humanitarian crisis from erupting? i, you know, the civil war and long lasted for decades and the wounds of that have not healed. i mean, we ostensibly had an end to wish along the civil war in 2009. but the way in which,

you know, the single is nationalist military really put down on the thomas tigers. and you know, others the terminal minority in general has left unhealed wounds across the country . and so while we're talking about people coming in to the streets that represent all sri lumpkins, let's not forget that the tunnel minority has been protesting and seeking justice and reconciliation for years even before this crisis. and i think while the sri lankan are united because of the economic crisis, the political crisis is just as important and the to reinforce each other. you know, with the as l p p, this is roger pock says supportive, they're political party, still dominating the government. and renew vicar missing of the new president being brought into power by them. you still have the political causes of the original

problems, right? so you haven't resolved this. you don't have a representative government that represents all interests. you don't have a pathway to reconciliation. i think that's really important, even though we're looking at the acute problem of the economic crisis, we can't forget that the larger problem of minority rates of reconciliation after the civil war of a more representative government is really important. and that's why you still see protesters coming out seeking new elections or more accountability, more credibility in the government. i think until and unless you repeal or change the executive presidency. and until and unless you have fresh elections that signal more legitimacy that you can have a more representative government, you're not going to start a pathway to healing the longstanding ones. sri lanka is a smaller country and both in geographic size and population. so in terms of geo

politics, why is sri lanka so important and, and why is there crisis so relevant to modern politics? i think she's like the 1st and foremost is emblematic of what a lot of similarly placed countries are going through. so it's not so much that she lungs in of itself is so important, but it's story a one where political cronyism, political elite or depending on borrowing have led have cause mismanagement corruption and have led their country to be overly dependent on foreign loans. and then come into default, so you see a lot of countries, not just in south asia, we're seeing problems in pakistan going to the i m f. but right now the world is focused on sam b. s. you have other similarly situated middle income countries, that in the last 1020 years have become far too dependent on international loans.

and while we talk about chinese diplomacy, our jet trap as one of the factors, i would say that is an exacerbating factor their loans to china. i think it is the whole mindset of countries that are more and more authoritarian, more populous for leaders are allowed to take these loans and then not be able to pay them back, hoping that they'll just go away. in the end, it causes a crisis for the people in the country. so 1st and foremost, i would say that it's a warning sign to similarly place countries. second of all, i mean if we're thinking about the us china, strategic competition than china, then sri lanka is a place where we see this playing out. so the, the largest countries that have lent money to sri lanka. obviously china is up there, but it's japan, india, these are countries, china, japan, and india that are in the quad alliance with australia and the united states. and so they have an interest in the, in the pacific you know, having

a rules based in the pacific and sri lanka is a very important place in the, in the pacific. it is right in india's backyard. i think it's notable here to see that while many of the loans that show on guy's facing default on our, from china, the aid that they've received is largely from india. and so this is a place where you're seeing that she has strategic competition. we just side the other day with the chinese and indian embassies in colombo, getting into a bit of a public twitter spat over a chinese vessel being port at the port in hm. and taught us so you, you are seeing in real time that friction in terms of inner pacific competition, competition with china and here very clearly. india and japan on one side with china on the other to mana celica, dean. thank you so much for being with us. today now as inflation skyrockets,

amid the political crisis in sri lanka, there are non governmental locals who are helping their neighbors. moses a cash they, silva, a voice for the voiceless foundation has been on the ground helping the needy during this crisis. he says it's not just a matter of food shortages that the island is facing. the fuel shortage is making it difficult for locals to cook the food that they do have listen cb saturday. so concept got community key chair on the 1st of june, beth the most recent, a situation that we say is we used to receive it right, a chance to be brought back. then we came across with certain families who are not able to cope with us. if you look at the last 3 months we've out of courtesy mind the loud to fly and as to the size of a picture that you guys have are that people who are not able to cook at home and

very specifically those. and so therefore, the crises right now, i see not even a, so i need to lease, i would say for this, these people who are company in tamaqua, vicky chance this is my only one with which the provide them on daily basis. so i am seeing very much the law in government that middle income people, i see be affected, the side foundation at this lack of essentials. and next, when we return, we'll look into who and what agencies are attempting to help sri lanka. will these agencies actually help or harm the still developing nation? don't go anywhere. the ammo will be right back out. ah

ah . the joggers archipelago told them that she goes to san diego garcia, the largest island in the archipelago is now the location of a very large u. s. military base. you get given met, div our i to the us go. that meant to make a military base and just deported all of the chunk of some people from their country. so big caught returned back on the island. no, but we are fighting. that's why i'm fat. we'll fighting for the right. so

i, we do not consider the right to self determination actually applies to the juggle. since i don't the question, no self determination of the legal advice we have received is actually that should go, since we're not at all, not a people. for me, it's time to move on and see what we can do. a full agenda said committee to return back home. there is no support from the nomination type mission, african united mish. i don't care about cognition people. oh, i think the overall majority, all you probably should reconcile, reconcile to do so to piece i do because this is them being held hostage by then and also to russia. mm hm. i thought i would try to do a resist, any kind of cover wash, any pressure, any, any untoward, you know,

to rhetoric mostly sma reminds me to mix up. we'll succeed with ah. all right, we now know where this island nation stands today, but how exactly did sri lanka get here and who's really trying to help which countries are stepping in to stop the financial bleeding? this nation of some 22000000 is suffering for that. we are joined by carlos desousa. he is the director of vantage bell asset management in zurich, switzerland before joining bought about carlos was actually the lead emerging markets economist at oxford economics and organization specializing in global forecasting and quantitative analysis. carlos,

thank you for being with us. carlos right now, sri lanka is in the process of debt restructuring after it failed to pay some of its bilateral debts for the 1st time in the country's history. at the start of may 2022. and they've been meeting with the i m f, the international monetary fund to sort out a new loan program and find a new path to pay back its creditors. many people criticize this as a debt trap that will further send island deeper into debt. how do you read this forthcoming? i am loan. i do qualify, and the program is trapped in any way i am. if lending is done at concessional rates, i could not get or not borrow from any other credits or know what rates than it can from the i m. s. perhaps from multilaterals or similar interest rates. so i definitely will know why the 5 i think the government got itself in

a dead traps in the biggest years. and now it has to get out of it and going through the math to get a program of reforms and to be able to boast tony's deaths and to restructure including haircuts, falls against public net, it's just a normal procedure. does cell grands undertake whenever they get into the us state? department boasts of strong diplomatic ties with the island and, and launch the $2000000000.00 it has given the country. the problem is that is the total amount in a given since the country of independence from britain back in 1948. now for comparison, the u. s. department of defense gets an annual budget well over $700000000000.00. the u. s. with a new round of grants through usa id. now coming in with about $6000000.00 in humanitarian assistance, will provide cash assistance, short term jobs,

and agriculture supplies such as seeds directly to the crisis affected people to meet obviously their basic needs. now this new grant funding builds on $120000000.00 in new loans through the department, or excuse me, the development finance corporation, the d f. c. now for geo geopolitical purposes, it would actually be who the us to simply just give sri lanka this lump sum as a grant, not really alone. it's really not lot of money for the us. what sort of strings do you think will be attached to this us economic intervention? dfcs loans to my knowledge. there is not a lot of experience in general with the c loans business. a relatively new instrument that is being used by the united states. but they typically don't come attached with a lot of strings because they are proposed fully linked to your political interest

. so i don't think this particularly will come attached with a lot of strengths. to be honest, i would highlight that the reason why i have not received historically a lot of grams is because really, sorry, it's not a low income country, rather than country that got into bonds. the payment crisis in crisis recently. so, you know, it's not common for sure, lank out to not be able to cover it. it's a force of basic needs. this is just a temporary crisis situation, but it's different from say, many subsaharan africa countries that typically receive a lot of grants every year. and have done so for, for several decades. street in a different sort of situation. and structure is a different kind of country. so data that will justify wise rebecca has not received so many grams in the past. us treasury secretary janet yellen at

a g 20 meeting in bali and july singled out china as quote, dragging its feet when it came to discussions about that restructuring through the iron framework. now, china holds about 44 percent of the country's debt, totaling some $5000000000.00 us dollars. so other estimates put that dollar figure as double that japan is a far distance. second, creditor coming in at about 32 percent. the us holding just one percent of the countries $51000000000.00 total debt. do you foresee china stepping in aid this country? and what would that look like if it did? well, what the secretary yelling was referring to was about china. yeah. driving speed with respect with regards to the restructuring that and i think also in regards to yoga and chat the so the 3 nations that have requested to be part of the common

framework. this was the new setup that was created after the crisis to restructure. ready public that of low income countries in particular. so these framework doesn't apply in the exact same way. but it is well known that land, china typically doesn't want to take principles haircuts. and the way that they have in the past restructure that's bilateral debts, with, with their, with their partners is just postponing that maturities. in some cases, i believe there's been some good options in the interest rates. but to the public knowledge, at least there has been no haircuts. and what is known so far is that it is similar in the case of zombie. and so we would expect that's released in the, in the sense of lengthening maturities, but not so much in the sense of china taken at erica. this is probably going to be

similar in the case substrate lanka, and hopefully because of the economic situation is being so dire, more severe in some ways. it was the case in avia than china will probably move forward or hopefully move forward with the restructuring a bit faster than if davion jason'll zambia was quite a long time. and he's just been recently being finalized in the bilateral case. not yet on the commercial credits are case, which will happen in the next few months. carlos, this is a avant about asset management. thank you for being with us today. now at the time of this taping, sri lanka has yet to hash out a direct plan on how to shore up its finances or immediately bring down the inflation that's causing so much financial difficulty for the average sri lankan. and that is gonna do it for this weeks episode of modus operandi the show that digs

deep into foreign policy. i'm your host manila. chad. thank you for tuning in. we'll see you again next week to figure out the m o. ah, with i've actually found safety and embraces naziism as a juice. all of a sudden you're placed in a position where i can defend myself. now, i don't know to be afraid any more. on one hand, i'm terrifying that they're going to find that i'm jewish, but on the other, i think it's so far away. i distinctly remember my mom sitting me down one night

and her st. john, they're going to hurt. one guy hunched. me. hi my ear. when aren't somebody so now in the rest of the punch who started flying in, somebody shouted out, died, you boys died. and at that point i knew they're stuck back. remember i had an indian doctor. they came in and looked and said, there's no medical reason why you're you should be a lot. you to find something to believe. john story is a story of ho story, victory and whatever i can do to help him i would kill ah, with by the middle of the 19th century, practically the whole of india had been under the rule of the british empire. the

colonial authorities had imposed that heavy death bringing the people into poverty and were exporting natural resources. and moreover, these authorities absolutely had no consideration for the provisions of the local population, treating them like 2nd class citizens. the british were showing signs of disrespect even to those who cooperated with them. the fact of ignoring the religious beliefs of the hindus led to the mutiny of the sea boys mercenary soldiers serving under the british ground. 3000000000 began on the 10th of may 1857 in the garrison town of may river, north of india. in the form of a mutiny. the rebels quickly took over daily. the heroic resistance of the indian people lasted for one and a half years. however, the forces were not equal. the colonial authorities dealt with the rebels cruelly thin slaves. the boys were tied to the mouth of the cannon and were shot right through their bodies for the amusement of the public. these type of execution was

called the devils when the obliteration of the mutiny resulted in the death of 800000 inhabitants of india. however, the british empire never broke the free spirit of the indians and their will for resistance. in elementary school, the teachers call me back problem kids. so i was labeled early. i ended up getting kicked out of school. i was 1617 and a. those should have been my graduation high school years. but instead i'm on the streets selling crap gang, bang. and bacon that i was going to make to see 21.