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As rolling blackouts and food shortages continue, Sri Lanka weighs IMF bailout

AYESHA RASCOE, HOST:

People around the world are struggling with high gas prices and soaring inflation. Sri Lanka is one of the countries that has it worst. It's an Indian Ocean island nation where inflation now tops 60%. There are food and fuel shortages and rolling blackouts. And the economic crisis has spurred a political one - the resignation of a president and uncertainty about the future. NPR's Lauren Frayer is in Sri Lanka's capital, Colombo. We've reached her at a gas station where there are thousands of people lined up for fuel. Welcome to the program, Lauren.

LAUREN FRAYER, BYLINE: Thanks for having me.

RASCOE: Can you describe the scene where you are?

FRAYER: People are in line here, getting ready to spend yet another night in line for gas. It's kind of festive, though. Somebody's blasting their car radio behind me. A cheer went up through the crowd when the street lights came on because we're dealing with rolling blackouts here. So the power just came back on. People have been spending days in line here. I met a 12-year-old girl who should be in school but instead is guarding her parent's car in the fuel line - the members of the family are taking turns. And the line here is literally thousands and thousands of cars long. Earlier, I went up to the front of the line, and I spoke to the gas station owner, Mrs. S. Senaratne.

S SENARATNE: If we get petrol, it will be over within five, six hours. Whatever we have, we pump. That's all we can do.

FRAYER: And she's literally having to tell people sometimes who've been waiting in line for days - they get to the front of line, and she runs out of fuel. The whole country is rationing fuel. And they've just instituted a system where the digits on your license plate dictate what days you can get in line. It's actually similar to the system that some U.S. states followed in the 1970s oil crisis.

RASCOE: That's not good at all. I mean, how did Sri Lanka get to this point where it literally can't fuel its economy and just keep the lights on?

FRAYER: It's a mix of things. I mean, Sri Lanka's economy relies on tourism. That was hurt by the pandemic. But leaders here have really mismanaged their finances, and the country ran out of foreign currency to import fuel. And then, of course, fuel got more expensive because of the Ukraine war. So this is really a cautionary tale for all countries dealing with inflation and high gas prices. Food prices have almost doubled here. I told you about that 12-year-old girl in the gas line. Well, here's her father. His name is Christopher Michael, and he sums up the mood here.

CHRISTOPHER MICHAEL.: If the state cannot devise a system of distributing fuel, can they run a country?

FRAYER: The streets have filled with protesters here all spring and summer. That led to the resignation of the president. He fled to Singapore earlier this month.

RASCOE: So what happens next? I mean, you're describing a political crisis on top of this economic one.

FRAYER: Yeah. It's daunting. I mean, there is a new president. He's trying to negotiate a bailout from the International Monetary Fund. But meanwhile, there's another lender with deep pockets waiting in the wings, and that is China. China's already built a lot of infrastructure in Sri Lanka. It's poised to invest more, and that makes the West pretty nervous.

I just want to add one thing, though. With economic downturns as severe as this, we often worry about a surge of nationalism, of divisive populist politics, of a spike in racism. And Sri Lanka had a long civil war. It has a delicate balance of ethnic groups. There are worries that the ghosts of that civil war could re-emerge, but they actually haven't. And this fuel line is just like the great equalizer. Like, all ethnic groups are here - rich people, poor people. Like, I interviewed a central bank official who was in line here next to auto rickshaw drivers. And so that's what people cite when they talk about how they're going to get through this. They're going to do it with unity.

RASCOE: That's NPR's Lauren Frayer in the fuel line in Colombo, Sri Lanka. Thank you.

FRAYER: You're welcome.

(SOUNDBITE OF FREE THE ROBOTS' "DAKU (432 HZ)") Transcript provided by NPR, Copyright NPR.