Sri Lanka has begun to pay off an old oil debt owed to Iran with shipments of tea. This was revealed this Wednesday in Colombo by the Foreign Minister of the Asian island, Ali Sabry, flanked by his Iranian counterpart, Hosein Amirabdollahian.
Although the original agreement dates back to December 2021, it was never implemented, because Sri Lanka soon entered a chaotic spiral, both political and financial, which led to the suspension of payments and the resounding fall of Gotabaya Rajapaksa’s government. and his brother Mahinda.
That agreement between the Sinhalese Ministry of Plantations and the Iranian Ministry of Industry has been declared “satisfactory” by Amirabdollahian – on a two-day official visit – and revalidated by both parties. Originally it provided for monthly payment in kind amounting to 5 million dollars, until the debt of 251 million was satisfied. The first amount paid would be equivalent to five million dollars.
It could be said that hunger has combined with the desire to eat. Colombo, with its foreign exchange reserves at a minimum, can draw on its annual production of three hundred thousand tons of tea. The same can be said by Iran, which, although a tea-producing country, is also one of its biggest addicts, only behind Turkey and the British Isles in per capita consumption. Almost half of its imports come, in fact, from Sri Lanka, although the best customer for Ceylon’s excellent tea remains Iraq by far.
Sinhalese authorities emphasize that tea is a food product, which is why it is exempt from US trade sanctions against Iran. Likewise, this type of barter also avoids the participation of any sanctioned bank. Given the acute financial crisis that Sri Lanka is going through, it is not like there are many alternatives. It should be noted that last year Colombo had to resort to a loan from the International Monetary Fund to avoid bankruptcy.
The arrangement does not make Sri Lankan tea exporters entirely happy, accustomed to being paid in foreign currency but who, for this particular deal, are being paid in Sinhalese rupees by the government.
Tea cultivation was introduced to ancient Ceylon by British settlers more than a century and a half ago, after a plague wiped out coffee plantations. To collect it, they encouraged the immigration of tens of thousands of Tamil (Hindu) laborers from southern India. Although Sri Lanka’s current foreign minister, Ali Sabry, also has Tamil as his mother tongue, he belongs to the country’s Muslim minority.
The civil war that bloodied the island for more than twenty years was not led by any of these Tamil groups – as opposed to the Sinhalese Buddhist majority – but by the Hindu Tamil communities settled in the north and the east coast of the island for many centuries. . The so-called Tamil Tigers have not raised their heads since their military defeat in 2009. Something that, this week, has allowed the Supreme Court of Sri Lanka to give its approval to a softening of anti-terrorist legislation, still pending parliamentary ratification.
On the other hand, this week a Chinese scientific exploration ship has returned to anchor in the neighboring archipelago of the Maldives “to resupply”, for the first time in a long time. The last time it happened, India protested and managed to delay its arrival, citing possible espionage activities.
Following the election in September of a new Maldivian president, Mohammed Muizzu, it is now New Delhi that is on the defensive. The new government in Malé has replaced the previous motto, “India First”, with “India Out”. Indian Prime Minister Narendra Modi had agreed with the previous Maldivian executive on the presence in the archipelago of a contingent of seventy Indian soldiers, in charge of a twin-engine plane and two helicopters, “to collaborate in patrol work.” Muizzu, for its part, after a lengthy negotiation, has given the Indian army two months – between March 10 and May 10 – to complete its withdrawal.