Thread by @ChayuDamsinghe

Detailing out another story of corruption and theft, this time of consumers and farmers, these stories add credibility to #GoHomeGota #GoHomeGota2022 protests over vague claims.

#SriLankaEconomicCrisis

(1/14)

Sri Lanka consumed around 2 mn MT of rice on average each year since 2000. That comes to around 42mn MT total consumption.

Of this, we've imported a bit more than 6 mn.

Leaving around 36 mn produced locally.

(2/14)

Let's take the imports first.

With average cost per MT of rice around 400 USD, that's a real cost of around 2.4 bn USD over 21 years.

However, there's around a 50% tax on this (a little less, but given the actual import is higher than 6mn, I'm keeping this at 50%).

(3/14)

So there's a 1.2 bn USD extra paid by consumers over 21 years. Let's take that as loss #1.

Then let's look at the local consumption, where the real issue is.

(4/14)

Local rice prices have instead averaged around 600 USD per MT (or more accurately 0.6 USD per kg). This means the local production of 36 mn MT comes to around 21.8 bn USD in consumer costs.

But of course, this is for rice, an essential, so it's fine right?

(5/14)

Compare the alternative. If we imported this 36mn, it would cost only 14.4 bn USD.

There's a total wastage to the consumer of around the same 7.5bn USD - around 350 mn USD a year.

(6/14)

So if this extra money the consumer spends just went to the farmers of Sri Lanka, that's excusable in my view.

But it doesn't. They get paid even less than the import price of rice for paddy!

Where does this 350mn USD every year go to?

(7/14)

It goes to the rice oligarchy.

They get rich off profiting from the labour of our farmers, who get denied opportunity to upskill themselves, and off the Sri Lankan consumer, which spends an extra 350mn USD every year directly (and another 50-60mn a year in tariffs)

(8/14)

What could be done with around 400 mn USD a year? We could fund massive upskilling of our farmers, we could massively grow their technical competence, we could absolutely modernize our agriculture.

There's so much we could have done with the 8-9 bn dollars we wasted.

(9/14)

This should change - but realistically, I don't think it will. It needs a huge reallocation of resources to make sure the current system being dismantled doesn't harm the farmers who've been forced to become dependent on it.

(10/14)

Sri Lanka feels too corrupt and buddy buddy with these oligarchs to really fight against them.

However, I think there are 2 things we can do as individuals and those outside the state.

(11/14)

1 - learn about the truth of what's happening and spread the message. It's a lie that Sri Lankans can't understand these things, we can. And if the recent protests show, it's that we can act on knowledge as well.

(12/14)

2 - Do what we can to improve the skills of the public. This can be through private money if the state doesn't do it, it can be through community engagement, but upskilling and improving the lives of the public, especially the poor, is a critical TOOL against corruption.

(13/14)

One day, I'm confident that enough of this will get done. It won't be perfect, it'll still have lots of flaws.

But the story of Sri Lanka HAS been of fixing our mistakes, even if we take time to do it. So we'll do it this time too.

The protests prove it.

(14/14)

Caveat - these are approximate numbers and approximate calculations. There are more moving parts here. Some years are worse than others (I think now, the wastage is closer to 1bn rather than 400mn).

But broad message remains the same

As many said, sources - central bank, stats dept, customs dept, agri dept, and global price indices