Ukraine's post-war future, Sri Lanka's worst economic crisis

Even what should be the most straightforward matter in concluding a war - negotiating the terms of disengagement and military withdrawals - is guaranteed to be fiendishly complicated in the case of Ukraine.

This is why the Ukrainians will engage in a process of often frustrating and aimless potential withdrawal negotiations with the Russians - only if they can be sure that they can get security guarantees from the West, says global affairs correspondent Jonathan Eyal in his commentary.

The most straightforward security guarantee that can be offered to Ukraine is that of membership in Nato.

But this is also the least likely option, because Ukrainian membership of the alliance would mean an explicit Nato guarantee for the recovery of all of Ukraine's territory. This will put Nato on a direct and escalatory confrontation path with Russia.

For obvious reasons, therefore, the discussion now is about offering Ukraine other forms of security guarantees. Yet even these are ridden with complications.

Says Eyal: "An offer to include Ukraine in the European Union would grant the country a huge security boost... The problem here is that membership requires a high degree of bureaucratic and economic compatibility, something which will take at least a decade from now to fulfil."

With increasing frequency over the past few weeks, there have been harrowing stories about what Sri Lanka's worst-ever economic crisis looks like.

Thirteen-hour power cuts; people dying because life-saving drugs have run out; goods piled up at ports because importers cannot get dollars to pay for them; a currency crash; soaring prices of essentials, long queues for food, petrol and gas cylinders; the resignation of the entire Cabinet; and then last week, the first-ever default on foreign debt.

Populist measures such as hefty tax cuts decimated tax revenues by about one-quarter at a stroke - and this was before the pandemic, says associate editor Vikram Khanna in his commentary.

After the pandemic arrived, more revenue-eroding measures were adopted. "The government exempted many industries, including IT services and hotels, from tax, extended tax payment deadlines, announced forbearance on tax arrears for firms and lavished spending on vaccination and health schemes as well as cash transfers," he writes.

"With revenues at rock bottom, the government had no choice but to step up borrowing to keep its spending going."

He notes how, repeatedly during its short tenure, the government ignored the advice of experts, ranging from agronomists to business leaders to economists.

External funding by itself, which is not new to Sri Lanka, will be no magic bullet. To achieve sustainable growth, Sri Lanka also needs deep reforms, including a more robust rule of law, a less centralised decision-making process in government, an overhaul of state-owned enterprises, new policies on technology and education and stronger minority rights.

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