Tea in Sri Lanka
Researchers: Aleeshia Carman, Taimur Mumtaz, Maren Flemming
The Current State of Sri Lanka
Politically, Sri Lanka has a partially free press and a moderately free state. When President Maithripala Sirisena was elected in 2015, Sri Lanka experienced both political and civil improvements. Additionally, the President worked to repair relations with the Tamil minority post-war. Despite progress, the government has been slow to better the conditions brought on by the 30-year civil conflict with the Liberation Tiger of Tamil Eelam (LLTE); this war ended in 2009.[1] However, in 2017, Sri Lanka’s Constitutional Assembly created a draft constitution, which aimed to politically decentralize and stabilize peace throughout the country; the Office of Missing Persons became active again; and, the Ministry of Information passed the Right to Information Act.[2]
Despite the diplomatic efforts for stability in Sri Lanka, there is currently political unrest within the acting government. In October 2018, Parliament was suspended when Sirisena experienced tensions with former political ally, Rahil Wickremesinghe.[3] The dispute continues due to the tension caused by President Maithripala Sirisena’s alleged pro-Chinese orientation, and Rahil Wickremesinghe support of traditional Indian ties.[4] During the suspension of parliament, Mahinda Rajapaksa became de facto Prime Minster. The suspension has now escalated to the dissolving of Parliament, as Mahinda Rajapaksa failed to receive a majority.[5] This is problematic for Maithripala Sirisena, as the current President requires support from the de facto Prime Minster in the upcoming election against candidate Rahil Wickremesinghe.[6] The election will be held in January, therefore, the 225-member Parliament will remain suspended until then.[7]
Sri Lanka’s Economy
The Sri Lankan economy has experienced promising growth rates in recent years, and has a current GDP of 260.6 billion.[8] The country’s main economic focuses are tea exports, tourism, and the production of agricultural commodities such as rice, rubber, and tobacco (citation needed). Sri Lanka is heavily focused on trade, as imports and exports together amount to 51% of the country’s GDP.[9] The United States is Sri Lanka’s most important export market, and India is their largest supplier.
Sri Lanka gained independence from Britain in 1948, and their economy has been impacted heavily by natural disasters and the civil war since then. The civil war most prominently impacted economic growth, culminating in the country facing bankruptcy in 2001 as debt exceeded 101% of GDP.
The recent political turmoil regarding the suspension of Parliament and Prime Minister dispute could impact many sectors of the economy, but will particularly damage the tourism industry. This could cause significant harm to the tea industry as well, the Sri Lankan tea industry has been in practice for over 150 years, and became the world’s leading exporter of tea in 1995. However, the country is now the world’s third largest exporter, behind Kenya and China. Sri Lanka has recently struggled to keep up with the increasing global demand for tea, and the industry has experienced significant labour unrest.[10]
Political Stability
Sri Lanka’s internal security has stabilized proceeding its victory over a 30-year conflict with the Liberation Tiger of Tamil Eelam (LLTE). Nonetheless, the internal security situation remains vulnerable to volatility. While the World Bank Indicator for political stability showcases that Sri Lanka’s political stability has been gradually improved, its political environment is in constant flux.[11] Recent events in the nations politics forecasts the potentiality for future uncertainty.[12]
While the military conflict between the government and the LTTE ended in May 2009, the possibility for future attacks cannot be ruled out. Even though the State Emergency and the Emergency regulations were lifted in 2011, swaths of Sri Lanka still remain highly militarized. The heavy militarization of the countries North to prevent a renewed insurgency continues to be the subject of both domestic and international concern.[13] Evidence has revealed that the military has deep-rooted influence within the North’s civil affairs, controlling everything from large scale property development to running a chain of road-side café’s.[14]
2018 has been riddled with nation wide political protests. The transition of power from the authoritarian regime of Mahinda Rajapaksa to the current government of President Maithripala has brought with it a wave of civil liberties.[15] The government no longer meets civil strife with violent responses. As a result, the populace is constantly exercising its new-found ability to vocalize its disapproval with the current government. Recently, these protests have taken a violent tone. Sri Lanka witnessed the country’s worst ethnic violence in years; for four days extremist Sinhalese Buddhist mobs attacked and burned Muslim business, homes and Mosques in the central city of Kandy.[16][17]
While Sri Lanka shows immense potential for economic growth, the current civil unrest and political instability on the island remains a deterrence for foreign investment. As the island attempts to stabilize its economy, future parliamentary developments and post-war ethnic dynamics will likely determine the outcome for potential foreign investors in Sri Lanka’s tea industry.
[1] “Freedom in the World 2018,” Freedom House, 2018, https://freedomhouse.org/report/freedom-world/2018/sri-lanka.
[2] “Freedom in the World 2018,” 2018.
[3] “Sri Lanka country profile,” BBC NEWS (2018), https://www.bbc.com/news/world-south-asia-11999611.
[4] “Sri Lanka country profile,” (2018).
[5] Chaudhury, Dipanjan Roy. “Sri Lanken Parliament dissolved as Mahinda Rajapaksa fails to garner majority before November 14,” The Economic Times (2018), https://economictimes.indiatimes.com/news/international/world-news/sri-lanka-president-sacks-parliament-after-power-struggle-minister/articleshow/66560301.cms.
[6] “Sri Lanken Parliament dissolved as Mahinda Rajapaksa fails to garner majority before November 14,” (2018).
[7] Ibid.
[8] “Sri Lanka.” 2018 Index of Economic Freedom. 2018. Accessed November 6, 2018. https://www.heritage.org/index/country/srilanka
[9] Ibid.
[10] Interview. Talking Economics. April 03, 2018. Accessed November 7, 2018. http://www.ips.lk/talkingeconomics/2018/04/03/trouble-brewing-how-sri-lankas-tea-industry-can-prepare-for-future-challenges/.
[11] Sri Lanka, Political Stability. The Global Economy. https://www.theglobaleconomy.com/Sri-Lanka/wb_political_stability/
[12] Hewage, Kithmina. “Political Instability- The Achilles Heel of Sri Lanka’s Productivity”. Institute of Policy Studies of Sri Lanka. http://www.ips.lk/talkingeconomics/2016/09/29/policy-instability-the-achilles-heel-of-sri-lankas-productivity/
[13] Ganguly, Meenakshi. “Why Cant We go Home: Military Occupation of Land in Sri Lanka”. Human Rights Watch. https://www.hrw.org/report/2018/10/09/why-cant-we-go-home/military-occupation-land-sri-lanka
[14]Keenan, Alan. “Sri Lanka’s North: Recipe for Renewed Conflict”. Crisis International Group. https://www.crisisgroup.org/asia/south-asia/sri-lanka/sri-lanka-s-north-recipe-renewed-conflict
[15] Roth, Kenneth. “Sri Lanka, Events of 2017”. Human Right Watch. https://www.hrw.org/world-report/2018/country-chapters/sri-lanka
[16] Feltman, Jeffery. “ Sri Lanka: An Urgent Case for Conflict Prevention. Brookings Institution. https://www.brookings.edu/blog/order-from-chaos/2018/10/31/sri-lanka-an-urgent-case-for-conflict-prevention/
[17] Keenan, Alan. “Buddhist Militancy Rises Again in Sri Lanka. Crisis International Group. https://www.crisisgroup.org/asia/south-asia/sri-lanka/buddhist-militancy-rises-again-sri-lanka
