Sri Lanka descends into political chaos

Sri Lanka has descended into political chaos with millions of citizens waiting for the resignation of President Gotabaya Rajapaksa on Thursday. Rajapaksa fled to the Maldives to escape a popular uprising against an economic crisis blamed on his government’s mismanagement. He is expected to head next to Singapore though his final destination is still not clear. Even though Gotabaya Rajapaksa and other members of his family are out of the scene, the crisis in the island nation is far from over.

Sri Lanka is now a country effectively without a government. People are unwilling to follow the diktats of Ranil Wickremesinghe, the acting president. In fact the majority of the protesters believe Wickremesinghe to be an extension of the hated Rajapaksa clan and want him to vacate his seat. Wickremesinghe has declared a state of emergency (countrywide) and a curfew (western province) in an attempt to rein in the protesters. For their part, the people on the streets are in no mood to go back to their homes just yet. They want a total overhauling of the existing political order. Particularly they want the enormous executive powers of the president curtailed.

President Gotabaya Rajapaksa’s dramatic fall from grace marks a remarkable reversal of fortunes for a political family that has dominated Sri Lankan politics for almost two decades. Once revered as Civil War heroes the Rajapaksa clan have been forced to leave the country amid utter contempt from fellow citizens. Yet there was a time when they seemed unstoppable. Their immense popularity apparently instilled in them a sense of infallibility. And also led to a number of bad populist decisions that set in the rot. In 2019, the Rajapaksas implemented huge tax cuts, which hit government finances. And last year, the government decided to ban all chemical fertilizers, hurting domestic food production. There are widespread allegations of corruption and nepotism. As a matter of fact, observers say that in South Asia, no other political dynasty has been as confidently nepotistic as the Rajapaksa’s. During Mahinda Rajapaksa’s second term as President from 2010-15, there were said to be more than 40 Rajapaksa family members in government posts, apart from the cabinet.

It is crucial to note that Gotabaya Rajapaksa is yet to hand in his resignation. The president’s eventual resignation, and the formation of a government, will be an essential first step towards assuaging angry protesters and restoring the rule of law. Early elections will also be vital so that a government with a strong mandate is ushered in as quickly as possible.

However, there is a caveat. Many economists believe that the financially bankrupt country is currently in no position to hold a general election. Also forming a government by consensus, during these turbulent times is a difficult proposition.

Sri Lanka’s descent into unprecedented political turmoil comes on the heels of a complete economic meltdown. The country’s foreign exchange reserves have virtually run dry, and it has already missed debt interest payment according to media reports. The island nation doesn’t have enough fuel for essential services and it doesn’t have enough foreign currency to import more. Sri Lanka has more than $51bn in foreign debt, $6.5bn of which is owed to China, and the two countries are in negotiations about how to restructure the debt. The World Bank has agreed to lend Sri Lanka $600m, and India has offered at least $1.9bn. The Sri Lankan government had also been in talks with the International Monetary Fund (IMF) about a possible $3bn loan. The IMF said that the government would have to raise interest rates and taxes as a condition of any deal. However, any possible IMF bailout would require a stable government to be in place.

Sri Lanka’s future is uncertain and some more time is required to get a clearer picture. There are lessons to be learnt from the crisis in the South Asian nation. The current crisis in many ways is a failure of their political class in preventing social collapse. Facing an economic crisis, the inability to engage with opponents led Sri Lanka in the direction of half-baked measures that backfired.