Exclusive | Sri Lanka and other developing countries count cost of Ukraine war
- Russia’s invasion and resulting sanctions are driving up fuel, cooking oil and food prices
- Tourism in many of these countries also looks to set to suffer, just as the sector was hoping for recovery after pandemic restrictions ease
Developing countries are feeling the effects of Russia’s invasion of Ukraine, with a noodle crisis in Indonesia, unsold tea piling up in Sri Lanka, and acute food shortages across much of Africa.
The Ukraine war is driving up the costs of fuel, cooking oil and food across the world through a combination of the impact of wide-ranging sanctions against Russia and a disruption of trade.
Russia is Sri Lanka’s third-largest market for its tea, after Iraq and Turkey, but exports have become difficult, according to Palitha Kohona, the Sri Lankan ambassador to Beijing.
“Even if you manage to get the tea across, we couldn’t get paid for it because Russia is now not part of the Swift system,” he said.
Seven Russian banks, including the country’s second-largest institution VTB, were blocked from the Swift global banking system last month as part of the European Union’s sanctions aimed at pressing Moscow to end the war.
Kohona said the trade blockage was exacerbating his country’s foreign reserves crisis. According to official figures, Sri Lanka exported 287 million kilograms (632 million pounds) of tea last year, worth about US$1.3 billion, with more than 10 per cent going to Russia.