The Next Century Foundation has been closely monitoring the crisis developing in Sri Lanka. NCF calls for the international community to aid in the relief of such a terrible situation that impacts the country’s population of nearly 22 million.

As the country’s economic situation worsened, Sri Lankans have had to suffer through shortages of essentials such as food, medicine and fuel. Additionally, students have not been able to go to school as all schools have been closed since the 4th of July, lines stretch out miles from fuel stations in the hopes of fuelling their vehicles.

Over the past weekend, both Sri Lankan President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe agreed to resign after protestors occupied both of their residences and even set fire to the Prime Minister’s home. However, Rajapaksa fled the country mere hours before his planned resignation. He and his family left aboard an Air Force plane to Malé, Maldives after being blocked by airport staff at least twice for flights to Dubai and Abu Dhabi. He was recently reported on Thursday, 14 July 2022, to have left Maldives for Singapore and has sent a letter of resignation via email to the Sri Lankan Speaker of Parliament.

Who are the Rajapaksas?

The Rajapaksa family’s rise to power began in 2004 when Mahinda Rajapaksa was elected Prime Minister. He then went on to win the presidency in 2005 and once in power, began to pack his government with family members. His brother Gotabaya was elected Defence Secretary and together, they launched a brutal war against the Liberation Tigers of Tamil Eelam (LTTE). The LTTE were a militant separatist group who were fighting for Hindu Tamils in the Northeast region of the island.

Their campaign prompted numerous accusations of war crimes, including United Nations inquiries. However, the duo ascended to God-like figures for the country’s majority population of Sinhala-Buddhists despite the thousands of Hindu Tamils who have been reported to be killed, or disappeared.

The Rajapaksas then held power until 2015 when they were ousted from politics for gross economic mismanagement, resulting from a borrowing spree from countries such as China and Japan. Unfortunately, due to a nationalistic uproar following the terrorist attacks coordinated on Easter Sunday, the Rajapaksas were voted back into power in 2019.

Once again, they packed the government with their family members with Gotabaya as President and Mahinda as Prime Minister. Their other brothers Basil and Chamal were elected as the Minister of Finance and Minister of Irrigation, respectively. Their sons were also given positions within key ministries of agriculture, youth and sport, to name but a few.

How did the economic situation become so dire?

Despite the family entrenching itself within the cabinet and occupying senior positions, many of the family members had limited experience and understanding of their roles and quickly made terrible decisions for the country. While attempting to fix the economy, they implemented a series of tax cuts. This, coupled with the pandemic that served a major blow to the tourism industry, had a catastrophic result to the country’s dire economic situation. Foreign reserves quickly dried up which led to a curtail in imports of fuel, food and medicine.

In addition, the government has banned the sale of petrol for non-essential vehicles, the first country to do so since the 1970s oil crisis that resulted in fuel being rationed in Europe and America. Since the sale of fuel is extremely restricted, this has resulted in people stuck waiting in long queues for petrol.

Neither medical staff nor medicines are able to get to hospitals where Sri Lankans are being admitted, many of whom have no access to food. Food prices itself have also increased exponentially due to the combination of the Rajapaksas deciding to ban all chemical fertilisers last year which impacted farmers’ crop outputs and the invasion of Ukraine by Russia which has resulted in the blockage of grain and other commodities.

Inflation in the country has also risen drastically. When measured in March, inflation was at less than 20% but recent reports released in June by the nation’s central bank indicates that inflation has quickly increased to a ghastly 54.6%. This suggests that Sri Lankans’ life savings have lost more than half of its value which no doubt puts a strain on households across the island.

What can be done? 

As the government has failed to honour foreign debt, the IMF has offered a bailout with a key condition to raise taxes and combat corruption. Up until recently, the Rajapaksas have been at the helm and have been scrutinised for their gross economic mismanagement and widespread corruption which has led to President Gotabaya absconding.

With Gotabaya gone, a new unity government must be formed to negotiate agreements with other countries and international organisations in order to stabilise the country. However, all assistance that is coming into the country must come with strict conditions to ensure that the aid cannot be mismanaged.

As of now, Sri Lanka owes an amount of $51 billion in foreign debt, $6.5 billion of which must be paid to China. Once Sri Lanka’s unity government is formed, the Chinese and Sri Lankans must work on restructuring the debt through an appropriate payment plan. Loud calls must be made to the G7 countries, all of whom are industrial leaders that could certainly help the struggling nation.

At NCF, we pray for the situation to find stability soon and that the international community comes together to aid the Sri Lankans in this time of plight.