People throng President Gotabaya Rajapaksa's official residence. Photo / AP
People throng President Gotabaya Rajapaksa's official residence. Photo / AP
A first-generation Kiwi Sri Lankan watched in dismay as the country her family once called home plunged into bankruptcy.
While the economic ideas of debt and foreign reserves can often seem abstract, Chamanthie Sinhalage-Fonseka told the Front Page podcast the importance of these structures can beseen in the struggle of average Sri Lankans today.
Chamanthie Sinhalage-Fonseka is business professional working in Auckland. Photo / Supplied
"There are various estimates on how much Sir Lanka has left in its foreign reserves, and one I read recently was $50 million.
"To put that into context, that's a third of the cost of the Wellington Town Hall. So next to nothing."
Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies. When reserves become too low, countries can no longer repay their debt to other nations. In worst-case scenarios, this means the country will eventually not be able to import any further goods until the debt is renegotiated or paid in part.
Sri Lanka's reserves stood at $7.6 billion at the end of 2019 and fell to $1.9 billion by the end of March. The inability to bring the crisis under control has seen the country plunge to the brink of having nothing left in the coffers.
"What does it look like? It looks like the country owing $51 billion in debt. It looks like tourism having collapsed. And remittances having been lost," she says.
"You can't import fuel, which means you can't run the generators that turn the lights on. It also means that for a really car-reliant country of 20 million people, living on a piece of land a third of the size of the North Island, they're stuck not being able to move. People are dying waiting for fuel supplies.
"It also means that the country can't import rice and can't import paper – so exams have had to be stopped for a while."
Chamanthie Sinhalage-Fonseka (in red at the front) showing friends around Sri Lanka several years ago. Photo / Supplied
The people of Sri Lanka became furious at what was happening and eventually took to the streets in protest. After four months of public demonstration, President Gotabaya Rajapaksa resigned and after initially being stopped from leaving the country has escaped to the Maldives.
Sinhalage-Fonseka says that she can understand Kiwis feeling somewhat disconnected from the crisis, but this isn't the case for the community of Sri Lankans living here.
"Sri Lankans in New Zealand are saying that there are 16,000 of us here," she says.
"We are Kiwis and we are interested in what's happening over there. Regardless of whether Sri Lanka is a rich country or a poor country, the fact that 16,000 Kiwis are affected by something at once, should be for the New Zealand Government to care about it."
Sinhalage-Fonseka uses the example of the Christchurch earthquakes to explain that New Zealanders with Christchurch roots all around the country felt the weight of that tragedy even though it only affected part of the population.
"I think New Zealand's obligation to Sri Lanka doesn't come from a rich country, poor country perspective, but from the fact that there are 16,000 Kiwis who are directly affected by that."
Sri Lanka is currently in the process of appointing legal and financial advisers for negotiations on restructuring its foreign debt – which will be the first step on the long road back to economic stability.
Sinhalage-Fonseka says that while it's important for New Zealand to respect the democratic sovereignty of other countries, she does believe that Aotearoa can bring leadership and advice to the table to help Sri Lanka.
"Sri Lanka is at square one of rebuilding a country," says Sinhalage-Fonseka.
"I think countries like New Zealand that are quite advanced in their constitutional arrangements have a leadership role to play in advising on the next steps for the country. They'll need friends and they'll need advisers. I think that's where New Zealand can help."
• The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am.
