The boats should have been out on the water off Sri Lanka's northern coast, hauling in nets teeming with fish. Instead, on one bright, recent morning, they were spread on the beach at Mullaitivu, as waves lapped at the shore and a few people milled about under palm trees. The idyllic scenery masked, for a moment, the pain of a nation. In Mullaitivu, home to a large minority Tamil population, the country's extreme shortage of fuel has wiped out incomes and brought life to a standstill. While unrest boils in the commercial capital of Colombo -- where protesters over the weekend stormed the presidential residence and forced President Gotabaya Rajapaksa to announce his intention to resign -- daily life has become a fight for survival. Unable to find kerosene for their boats, nor afford it on the black market, fishermen have not ventured out for three weeks. Without their catches, families can only buy fish from the market at inflated prices -- $7 a kilogram in nearby Jaffna. Locals say they are skipping one or two meals a day. At the same time, Sri Lankan fishermen worry that their Indian rivals from the state of Tamil Nadu are exploiting their absence. These fears became more acute last Sunday, when the Sri Lankan Navy arrested 12 Indians and seized their boats for allegedly fishing illegally in Sri Lankan waters. Mullaitivu's plight is a microcosm of the larger woes plaguing the South Asian nation, which all but ran out of foreign reserves to import essentials and defaulted on its foreign debts earlier this year. It also highlights long-simmering friction with India, a country that has emerged as a critical benefactor in the crisis, extending billions of dollars in credit to its southern neighbor. "The economy is grinding to a halt and there are not many alternative job opportunities for people," said Ahilan Kadirgamar, a political economist and senior lecturer at the University of Jaffna. "The cost of living is rising while people's incomes are collapsing." Sri Lanka's overall inflation rate rose to 54.6% in June, a record level, compared to the previous high of 39.1% in May, the statistics office said. Food inflation hit 80.1%. The fisheries industry contributes around 2.7% to the country's gross domestic product, providing direct and indirect employment to more than 575,000 people. There are 50,000 fishing families in the four districts of Mullaitivu, Jaffna, Mannar and Kilinochchi, with roughly 15,000 operating fishing boats. Each boat needs at least 20 liters of kerosene to get out to sea and return the same day. Kerosene that once cost about 88 Sri Lankan rupees (24 cents) per liter was recently selling for 400 to 500 rupees a liter on the black market. In Mullaitivu, laborer Tirukunabalasingham Amrithathasan has earned nothing for two weeks. He lost one leg and injured the other during the country's brutal civil war. He is the sole breadwinner in his four-member family, normally making the equivalent of $4 to $5 a day mending fishing nets. But without fuel, the fishermen do not need his services. He compared the current crisis to wartime, and said the situation is worse now. "Though we lived with less money and had troubled lives back then, we never had to beg for food, unlike now," Amrithathasan said. Sri Lankans suffered enormously due to the ethnic conflict between the Tamils and the majority Sinhalese. The civil war, which lasted nearly two and a half decades, unleashed death and destruction, severely affecting Tamil communities in the north. Postwar, Mullaitivu, a heavily militarized town, had the highest poverty rate in the country at one point at 44.5%, against an average of 14.3%, according to the Department of Census and Statistics, Sri Lanka. "We don't have savings. We were struggling to rebuild our lives postwar, and the economic and fuel crisis made things worse now," said Kumar Selvamalar, a 57-year-old woman working in the fishing industry. Appeals to the government for fuel have had little effect. The last consignment came in the first week of June, when India sent 15,000 liters of kerosene. This was rationed out, with workers complaining that it was not enough to meet even one district's daily needs. Adding to the resentment, the Sri Lankan fishermen believe India is maneuvering to regain the rights to Katchatheevu, an uninhabited island that India ceded to Sri Lanka under a 1974 maritime agreement. The waters around the island are rich in prawns and other valuable seafood. M.K. Stalin, the chief minister of Tamil Nadu, in late May urged Prime Minister Narendra Modi to reacquire the island so that Indians could fish freely, according to media reports. "To solve the important issue faced by Tamil Nadu fishermen, Katchatheevu should be retrieved, [Tamil Nadu] fishermen should be able to exercise their rights in their traditional fishing zones," Stalin was quoted as saying by Indian media. "This is the right time to take action in this regard, I'm duty-bound to remind the prime minister about this." Modi has been quiet on the issue, but some Sri Lankans are wary of India applying pressure, potentially using economic assistance as leverage. The Indian High Commission in Colombo previously told Nikkei Asia that New Delhi had provided "unprecedented" economic and financial aid to Sri Lanka, worth around $3.5 billion, and would continue to assist. Sri Lankan Prime Minister Ranil Wickremesinghe has expressed "appreciation for the support India has extended during this difficult period." Others are not so sure. "Unfortunately, India wants to take advantage of the economic crisis in our country and reclaim Katchatheevu," said Vincent Paul Arulnathar, president of Mullaitivu's fisheries organization. "Ceding Katchatheevu would be a deathblow to Sri Lankan fishers." The text of the 1974 agreement states that "Indian fishermen and pilgrims will enjoy access to visit Kachchativu as hitherto," using an alternate spelling. It also says that "the vessels of Sri Lanka and India will enjoy in each other's waters such rights as they have traditionally enjoyed therein." A subsequent 1976 agreement on their maritime boundary, however, did not include such language. It merely stated that "each party shall have sovereignty over the historic waters and territorial sea, as well as over the islands" on its side of the line. It also says that each will have "exclusive jurisdiction over the continental shelf and the exclusive economic zone as well as their resources," while stating that they will respect "rights of navigation." Sri Lanka see this agreement as preserving only the right of vessels to pass through each other's waters, not fishing rights. Fishing in the area has been contentious ever since. Sri Lankans complain that trawlers from Tamil Nadu cross the maritime boundary to illegally fish their waters, while India believes the wording of the 1974 agreement allows their presence. Dwindling catches have exacerbated the tensions. B. Balamurugan, president of a fishermen's association in Tamil Nadu, said that reduced hauls had forced Indian fishermen to move up to 4 nautical miles (7.4 km) into Sri Lankan waters, where he said "fish stock is available in abundance." Speaking to Nikkei Asia, Douglas Devananda, Sri Lanka's fisheries minister, said it will take at least two more weeks to secure kerosene supplies. He also said he is talking with the Indian government, and has reached out to the prime minister's office, asking them not to prod Sri Lanka on the Katchatheevu issue. "At this hour of economic crisis, India should extend its support and not aggravate the problem for fishers by talking on Kachchatheevu," Devananda said. "Entering territorial waters is a long-standing issue that remains unresolved for years. All we can do for now is to arrest them." An email sent to Raakesh Natraj, India's consul general in Jaffna, about Katchatheevu and Indian fishing activity remained unanswered as of publication time. Source: Nikkei Asia