The United Nations says high food prices in 2022 led to a crisis of affordability that has pushed millions more people into hunger. VOA U.N. Correspondent Margaret Besheer talks to experts about the situation and what to expect in 2023.
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During the past decade, China funded the construction of massive infrastructure projects in Sri Lanka meant to boost the island nation’s economy. However, after the economic collapse of the tiny Indian Ocean country earlier this year, there were questions whether these projects had contributed to the worst crisis it has ever faced.

A port city that dominates Colombo’s seafront was built on a 269-hectare patch of land reclaimed from the sea. It was to become a thriving business and financial hub, but it is virtually deserted. An international airport commissioned nearly a decade ago at Mattala city is called the “emptiest airport in the world.” Both the Chinese-funded projects are seen as “white elephants” that have added to Sri Lanka’s debt.

“The airport is not functioning. The Colombo port city was supposed to attract international investors, but there is not a single investor right now,” said Asanga Abeyagoonasekera, a Sri Lankan security and geopolitics analyst. “There is a question over the revenue model of all these projects because they are not financially viable. They were built with unsustainable large amounts of borrowings with high interest rates.”

The focus zeroed in on the Chinese projects when Sri Lanka ran out of foreign exchange to import food, fuel and medicines earlier this year. The catastrophic economic downturn has pushed many in the nation of 22 million people into poverty. In what was once a middle-income country, living standards have plummeted as inflation rages. The World Food Program estimates that nearly 6 million people need food assistance.

The country’s crisis is blamed on economic mismanagement by the previous government led by former president Mahinda Rajapaksa and the COVID-19 pandemic that led to a loss of vital tourism earnings in the scenic Indian Ocean country.

Analysts say the billions of dollars spent on Chinese-funded projects deepened Sri Lanka’s woes. Estimates are that the share of Chinese loans in Sri Lanka’s $40 billion debt range from 10% to 20%.

“China is known for working out arrangements that often turn out much costlier than just looking at the paper would tell you,” said Harsh Pant, vice president for studies and foreign policy at the Observer Research Foundation in New Delhi. “The inability of the Sri Lankan political class to understand the long-term consequences of the kind of short-term gains that they were making from China has allowed this to happen.”

Sri Lanka was one of the countries to sign onto China’s Belt and Road initiative under which Beijing extends loans to developing countries to build roads, airports, seaports and other infrastructure.

Sri Lanka’s debt to China could make it harder to push back against Beijing, according to analysts. In August, Sri Lankan authorities initially refused permission to a Chinese navy ship, Yuan Wang 5, to dock at the Chinese-built Hambantota port following objections by India and the United States, but later allowed it to come.

China has called the ship a scientific and research vessel, but security analysts said India was concerned because it was a surveillance ship packed with space and satellite-tracking electronics that can monitor rocket and missile launches.

The incident reinforced worries that the Chinese projects are linked to its strategic ambitions in the Indian Ocean. The Hambantota port was leased to China for 99 years in 2017 when Sri Lanka was unable to pay back the money borrowed to build it. That raised fears in India and Western countries that the port could be used by China’s navy to project power in the Indian Ocean, a vital seaway for global commerce.

“From my findings I found that these projects are more than a civil operation in Sri Lanka. There could be a military operation that they would introduce in the future such as from Hambantota,” according to Abeyagoonasekera.

China strongly rejects such concerns. At a foreign ministry briefing last month, Chinese foreign ministry spokesperson Zhao Lijian said that “China has never attached any political strings to its aid to Sri Lanka or sought any political interests from its investment and financing in that country.” Saying that Beijing empathizes with Sri Lanka’s difficulties, he said that “China has also been offering assistance to the economic and social development in Sri Lanka within its capacity.”

Sri Lanka is now hoping to hold early talks with China to restructure its debt, which is crucial to secure a $2.9 billion bailout from the International Monetary Fund.

Colombo reached a staff-level agreement with the IMF in September for getting the loan, but it is contingent on assurances from its creditors, including China, India and Japan, that the debts will be restructured.
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Across the globe, people are on the move as a hectic Christmas and New Year’s holiday travel season is in full swing. December and January are among the busiest months for global aviation, with passenger traffic this year expected to be the highest since travel restrictions were imposed because of the pandemic.

“This is the first time visiting my relatives for the holidays in three years,” Lyla Singh of Aldie, Virginia, told VOA. She arrived at Dulles International Airport outside Washington nearly four hours before her flight to New Delhi. “With so many people traveling and fewer airline staff means you really have to be patient.”

Like other countries, air travel to and from India has picked up since COVID-19 restrictions eased.

“I was going to avoid the crowds and travel overseas in March but wanted to see my family when they all gather,” Singh said.

In other parts of Asia, tens of millions of people are traveling by air, road and rail. China is expecting a surge in domestic travel after the country relaxed its zero-COVID pandemic control measures earlier in December.

The government eliminated many requirements, including frequent virus testing, and relaxed quarantine rules. The moves came as China prepares for Lunar New Year festivities in January, the country’s busiest travel season.

Economic boost

Analysts believe a surge in vacationing will help China’s ailing economy. Chinese state media quoted Chen Linan, a spokesperson for China-based online travel site Ctrip, as saying, “The increase in travel New Year’s Day and during the Spring Festival could be the biggest turning point in China’s tourism sector in three years.”

In Europe, travel experts foresee the busiest Christmas travel season in years after a protracted period of disruptions because of COVID-19 lockdowns.

“There’s a strong demand for Christmas travel, with ticket revenue up 18%,” Johan Lundgren, CEO of British airline easyJet, told Reuters. The airline also expects more passengers will take to the skies in the first part of 2023.

London’s Heathrow Airport lifted its 100,000 daily passenger limit to avoid major disruptions at the end of October and said it would not cap passenger numbers for the Christmas peak travel time.

Industry observers still warn travelers to prepare for potential labor disputes by transportation workers and staff shortages at European airports and rail stations that could cause cancellations. Two of Air France’s cabin crew unions that failed to reach a contract agreement last October filed to take strike action at any time from Thursday to January 2. The French air carrier issued a statement pledging to maintain a full schedule, adding it hoped to avoid cancelations or delays.

US holiday travel

More than 112 million Americans will travel during the Christmas and New Year’s holidays, according to AAA, a travel services company. Of those, more than 7 million will fly.

“I’m glad to be flying out to Atlanta before the bad weather arrives,” said Washington resident Todd Brunson, who booked his flight several days before the Christmas holiday. “I find the closer you get to Christmas, chances increase you won’t get to your destination on time.”

According to AAA, 2022 is shaping up to be the third-busiest year for holiday travel in the United States since it began tracking numbers in 2000.

The trepidations that holiday travel could get worse grew as weather forecasters predicted disruptions stemming from a fierce winter storm sweeping across the country, affecting 180 million people in 40 states. The storm brought treacherous road conditions and caused thousands of flights to be canceled.

“There’s snow in Kansas City waiting for us, so we are little bit nervous about getting there, but I think we are going to beat it, so we’ll be OK,” Lindsay Bittfield, who was flying from New York City, told WABC-TV.

Chicago, a major airline hub, is bracing for high winds, subzero temperatures and possibly 30 centimeters of snow before Christmas.

“We prepared well in advance for whatever weather conditions come, whether it’s snow, rain or wind,” said Karen Pride, director of media relations for the Chicago Department of Aviation. “We have 350 pieces of snow removal equipment that’s ready to clear snow on runways and around the airport.”

In anticipation of the storm, airlines rerouted flights and issued weather waivers that allow passengers to reschedule their flights without incurring fees.

“I’m keeping my fingers crossed,” Brunson said. “I just hope the joy of the season won’t be spoiled by any travel headaches.”
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The Central Bank of Nigeria has raised the maximum weekly limit for cash withdrawals after a public uproar over the caps it announced two weeks ago. The new limit is five times higher than the initial cap for individuals and ten times more for companies. The bank announced the limits to rein in excess cash and promote cashless payments, but critics say it could stifle millions of small businesses. 

The revised Central Bank withdrawal limits were announced in a circular released by the bank Wednesday.

The limit for individual withdrawals was raised from $225 to $1,125, while the limit for corporate entities was raised from $1,100 to $11,000.

Under the directive, any withdrawal above the set limits must be approved in advance in writing by the financial institution from where the withdrawal is to be made.

The CBN also lowered its processing fee for withdrawals above set limits.

But many people like Salisu Umar Garu, a former chairman of the Abuja Zone 4 traders association, say even the new limits will be difficult for businesses yet to be fully integrated into the online banking system.

“The minimum amount, it cannot buy anything for anybody,” he said. “Maybe the CBN should have come to ask us for advice, like if I do this how will it affect the country and the economy.” 

The new cash withdrawal limits take effect January 9. 

The central bank unveiled newly designed 200-, 500- and 1,000-naira bills in late November in a bid to combat counterfeiting, hoarding, corruption and other crimes.  

Authorities also said the action will promote more online-based transactions.

Citizens also have until the end of this month to exchange old bills for the new tender.

Isaac Botti, a finance analyst at the Centre for Social Action, said the policy, if properly implemented, will help stabilize Nigeria’s economy and prevent vote-buying during the February elections. 

“Issues around corruption, insecurity, election manipulation and vote-buying, will all be addressed,” he said. “It is important that we recognize that when policies are developed to put the economy in the right direction, it could be painstaking but it needs consistency.”

This week, the Nigerian House of Representatives summoned CBN governor Godwin Emefiele after initially asking the CBN to suspend the cash withdrawal limits.

Botti was skeptical of the lawmakers’ claims to be protecting small and medium-sized enterprises, or SMEs. He thinks the lawmakers want the limits withdrawn so they can access large amounts of money they’ve stashed away. 

“I’m beginning to wonder why some persons, including the lawmakers, are saying it will affect SMEs,” he said. They’re crying for themselves. This sudden love and protection for SMEs is borne out of their own selfish interests”. 

The CBN says it’s working with money agents in rural areas to help pull in old notes before their expiration date.

But citizens say the changeover time for the newly unveiled bank notes is too short and that unless authorities extend the deadline, up to 40% of Nigerian citizens without access to banks could lose their savings.
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