Sri Lanka: The Current Situation
25 August 2022
"With innumerable charges of corruption and money laundering, the Rajapaksas began to control 75%....."
After all the agricultural flip, economic fluctuations, and food shortages that have happened in the island nation, the countrymen took to the streets to protest against the then-functioning President Rajapaksa demanding his resignation. And in the present world scenario as we all know the protests are less non-violent than violent. Now let us see what infuriating and explosive mindsets led to such a situation that the former president had to impose another emergency and ultimately had to fly off to a naval vessel at sea.
On 2nd April 2022, Rajapaksa declared a state of emergency, a day after vexed protestors demonstrated near his house demanding his resignation. Gotabaya Rajapaksa invoked sections of the Public Security Ordinance, which gave him the authority to make regulations that according to the article 155 of the constitution cannot be challenged in courts. Rajapaksa was blamed by the protestors for long power outages as the fuel present was not enough to operate generating plants, along with that the dry summer season eroded the hydropower capacity and shortage of essential goods which was caused by huge debt obligations, dwindling foreign reserves, and its struggle to pay for imports.
Sri Lanka's economic woes are blamed on successive governments not diversifying exports and relying on traditional cash sources like tea, garments, and tourism, and on a culture of consuming imported goods. Sri Lanka also has immense foreign debt after borrowing heavily on projects that don’t earn, a major project being china based.
From an indecisive fertilizer ban to an unconquerable debt situation, the government headed by the Rajapaksa brothers has put itself in the “no solution” situation. Relying until now on help from its two major backers- Bharat and China and pertinaciously refusing wider international aid, the country is now on the verge of default. The brothers were reluctant in seeking support from the international monetary fund which eventually softened. Sri Lanka has asked both Beijing and New Delhi to reconstruct its debt repayments after Bharat in January extended a $400 million swap line and deferred an Asian Clearing Union statement of $500 million. Meanwhile, on China’s side, the country is day by day falling deep into the debt trap. For the construction of the Hambantota port, Sri Lanka borrowed heavily and later couldn’t repay the loans which further led to a 99-year lease to china for debt relief.
In response to paying the debt back, the government responded that the immediate debt default was to ensure “fair and equitable treatment of all creditors.” Sri Lanka dollar bonds due July 2022 fell 3 cents on the dollar on 12th April to a fresh record low of 45.73 cents. With the overall default debt of $51 Billion, the delinquent country’s creditor’s only option is to renegotiate the conditions of the loan.
The Corrupt Rajapaksa Clan
Be it Sri Lanka’s politics, governance, or economy the Rajapaksas have had the charge for over a decade. Starting from the president Gotabaya Rajapaksa to the Prime Minister Mahinda Rajapaksa who earlier was the president, from Basil Rajapaksa being an American Sri Lankan, who was made the finance minister for which the Sri Lankan constitution was amended to Chamal Rajapaksa who took the charge as the irrigation minister, the Rajapaksas have run the government on their fingers.
With innumerable charges of corruption and money laundering, the Rajapaksas began to control 75%of the country’s budget. The top 9 ministers of the cabinet belonged to the Rajapaksa clan including the sons of fellow brothers. Sri Lanka’s politics is often termed a one-family dictatorship. Neither are the brothers accountable for any fraud nor is there anyone to question them.
Mahinda Rajapaksa laid a blind trust on China and with China’s Debt trap diplomacy, today Sri Lanka owns 10% of the total debt alone to China. It is safe to say that after the Rajapaksas it was China that put the country in such a severe situation. Beginning from the cutting of tax after the formation of government without consulting any economist to the agricultural shift without discussing a bit with agricultural scientists the mismanagement of the economy in the hands of Rajapaksas has shown how the government has failed both on an international and national level.
Protestors and the after-effects
On May 9th, 2022 the then-working Prime Minister Mahinda Rajapaksa resigned handing over his duties to Ranil Wickramasinghe. The current political situation of Sri Lanka is that the whole cabinet resigned including the prime minister and the president, after the Lankans entered the residence of Gotabaya Rajapaksa, leaving the country in a political vacuum in response to which the country’s command is left with the coalition of other political parties. Ranil Wickramasinghe was made the acting president on 13th July 2022 and Dinesh Chandra Rupasinghe Gunawardena is the current Prime Minister of Sri Lanka since 22nd July 2022.
The whole milieu of Sri Lanka is not an outcome of one or two years of economic turbulence instead it has been rooted deeply for about 4 to 5 decades and now has shown drastic economic changes. The government’s unthoughtful and unprogressively functioning and schemes have put the country and the countrymen in the arena of surging inflation, unemployment, and a battle for food and fuel. Sri Lanka and the Lankans are aging backward with the increase in political havoc and imbalance in the country.