Lanka is burning again
Current Affairs
The Sri Lankan government declared an economic emergency last week amidst rising food prices, a depreciating currency, and its rapidly depleting foreign exchange (forex) reserves. It has also been witnessing soaring prices of staples like sugar, rice and cooking oil, forcing people to queue up in long lines.
Languishing tourism
Tourism - which contributed to ~10% of the total GDP and bulk of the forex transactions - was ravaged by COVID-19, causing the economy to shrink by 3.6% (y-o-y). This led to forex reserves dropping from USD 7.5 billion in 2019 to USD 2.8 billion in July this year, and the Sri Lankan rupee depreciating by 8%.
Food shortage
Sri Lanka relies heavily on imports to meet even its basic food supplies, the prices of which have risen in tandem with its currency depreciation, making food items less viable to import and supply.
The food crisis has further been exacerbated by the dampened agricultural output, arising from the government’s ban on the use of chemical fertilisers in farming and increased drive for 100% organic farming.
The response
To tackle these problems, Gotabaya Rajapaksa’s government appointed Major General Niwunhella to run the General Essential Services. This empowered the Major to seize food stocks held in private warehouses and sell them at regulated prices.
Moreover, the central bank banned forward contracts and capped spot trading at USD 1= SLR 200.
Last year, the government had banned imports of cars, cooking oils and spices to conserve its forex reserves.
The backlash
The seizure of inventory and imposition of restrictions on hedging forex risk is expected to disincentivise traders from importing essential goods.
Moreover, these import restrictions have made hospitals reliant on the import of essential drugs and equipment - causing them to feel helpless amidst the outbreak of the 3rd wave of coronavirus in the country.
Heavy dependence on imports for gas and petrol suggest an energy crisis may be creeping up soon.
Sovereign default?
The drop in forex reserves has raised some eyebrows on Sri Lanka’s ability to service its USD 2 billion foreign debt obligation this year.
Whilst the government has reaffirmed confidence in its ability, rating agencies have downgraded the country’s credit rating, and a bailout from the International Monetary Fund or friendly nations seems inevitable.
Sri Lanka has previously already ceded control of the Hambantota port to China on a 99-year lease due to its failure to meet its debt obligations.
Impact on India
Exporters are worried about import restrictions and payment recoveries from shipped orders. Further, Indian banks are no longer discounting letters of credit for Sri Lankan exports. India’s goods trade balance with Sri Lanka currently prevails at USD 3.6 billion per annum.
India possesses several investments in development projects in the country including petroleum retail, tourism and hotel, manufacturing, real estate and financial services - all of which are equally susceptible to this crisis.
What is KL Rahul doing differently to be successful?
Sports
KL Rahul opened for India in 12 away Tests in 2018 and 2019 despite his constant failures. He averaged just 13 apart from his 149 at The Oval.
He was finally replaced by Rohit Sharma, another white-ball specialist, who has been averaging 60 as an opener, way above any other Indian batsman.
A cat has seven lives, but KL Rahul has more
With Mayank Agarwal and Shubman Gill injured, KL Rahul got another chance to prove himself. At Trent Bridge, he stood tall after the middle order collapsed, scoring 84.
He went on to score a century at Lord’s, getting his name on the honour board, and won the Man of the Match award in a historic win.
The change of fortunes is not just about luck, but certain changes in his batting technique that have enabled him to score consistently.
2018 vs 2021
These two pics demonstrate KL Rahul’s neutral position, often known as ‘shuffle’ or the trigger movement, before facing the ball from the England tour of 2018 and 2021. The two pics might look similar, but there is a difference.
Control over trigger movement
In 2018, he moved so much across the off stump, that he would get completely restricted when the ball nips back in, making him vulnerable to inswingers, and getting bowled or lbw in the process. He was bowled 5 times, and lbw thrice in his 10 innings in England in 2018.
Control over his trigger movement has enabled him to leave the balls outside off, rather than poking at them. He has also worked on his backlift, giving him sufficient time to bring his bat down for defending the ball.
Adjusted techniques
Rahul and Rohit are natural stroke masters, and they have adjusted their technique in similar ways to be successful in Test cricket, and are currently the most reliable batsmen in this Test batting lineup.
Similar adjustments to the game can make Prithvi Shaw and Mayank Agarwal very good Test players in the future.
"Strike rate is overrated"
KL Rahul was trolled for his “Strike rate is overrated” comment during the IPL, but anchoring the Punjab Kings batting lineup filled with attacking batsmen has helped Rahul work on his temperament and take some responsibility.
Looking forward to Rahul’s batting in the rest of the Test series.
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