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Sri Lanka’s multiple crises just came to a head

The pandemic and past war debts have left the economy in tatters

- July 22, 2022

Sri Lanka’s legislators named Ranil Wickremesinghe to complete the term of President Gotabaya Rajapaksa after protesters stormed the presidential palace last week. On Friday, police launched a surprise raid to clear a protester camp in the capital, Colombo, a move that may deepen popular distrust of the new government.

Political unrest in Sri Lanka has escalated sharply following months of economic crisis — and inflation surpassing 50 percent. The government declared bankruptcy in early July as the country ran short of fuel. On July 8, protesters clashed with soldiers, then allegedly torched the prime minister’s home and took over the presidential palace. As protesters swam in the presidential pool, Rajapaksa left for the Maldives and is reportedly now in Singapore. His brother Mahinda, who had resigned as prime minister in May, reportedly took refuge on a military base.

What just happened, and what’s likely to unfold in the weeks and months ahead? Our research explains how multiple crises — historic and contemporary, national and global, as well as political and economic — came to a head.

Sri Lanka’s constitution calls for parliament to select a new president — and that’s what happened on Wednesday. But there’s little consensus among protesters about the way forward: Some are calling for patience and following constitutional guidelines, others are calling for revolution.

Worried about the state of democracy? Here are some reasons to be optimistic instead.

Sri Lanka’s war brought it close to bankruptcy before

Unlike its South Asian neighbors, Sri Lanka has a unique system with both an executive president and a prime minister. For over a decade, the Rajapaksa brothers dominated the country’s politics. Sinhala Buddhist nationalism guided their regime, which was determined to decimate the separatist “Tamil Tigers,” or LTTE. Western advocates of the War on Terror hailed the Rajapaksas’ approach as a model for defeating insurgencies.

To fight the Tamil insurgency, Mahinda, who was president at the time, with Gotabaya serving as defense minister, borrowed heavily to purchase weapons. Between 2005, when Mahinda was elected, and 2009, when the war ended, Sri Lanka’s military spending more than doubled.

But this helped push the country’s finances to the brink. A $2.5 billion IMF emergency loan bailed out the government, despite protestations from Tamil and human rights activists who criticized the Rajapaksas’ devastation of the country’s northern region. Having stoked the flames of Buddhist ethnonationalism, Mahinda called for an early election in 2010, which he won in a landslide.

When Mahinda ran for a third time in 2015, he lost to a coalition government that promised to root out corruption and promote ethnic reconciliation. With Wickremesinghe serving as prime minister, the new government did little to bring the Rajapaksa regime to account for its wartime atrocities or economic mismanagement, out of fear of angering Buddhist nationalists.

Then, just days after Gotabaya returned to Sri Lanka to compete in the 2019 presidential election, a series of bombings on Easter Sunday rocked the country, killing over 200 people. Police arrested several Muslims for the attacks. Gotabaya promptly mounted a national security campaign, stoking fears of further violence to secure the presidency. Subsequent investigations revealed that members of the security forces were aware of the potential attack but did not take action; nor were there any connections to the Islamic State, which the Rajapaksas had widely asserted.

Economic pressures deepened

After the election, Sri Lanka’s economic problems continued. These escalated rapidly with the pandemic’s onset, prompting months of farmer protests and teacher strikes.

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Similar to Sudan, Lebanon and other countries facing popular uprisings, the spark behind Sri Lanka’s latest conflagration might seem mundane — an increase in food and fuel prices. Shortages forced the closure of hospitals and schools. United under slogans like “GotaGoGama” (roughly, “Gotabaya Go Home” in English) or simply “Aragalaya” (Sinhalese for “struggle”), thousands have protested since April. Protesters have now forced the resignations of both Rajapaksa brothers, as well as pressuring their political successors.

In April, Sri Lanka defaulted on its payments toward an estimated $52 billion in foreign debt. While loans from China received much of the attention, the country’s largest creditors are international financial institutions as well as the United States, India and Japan.

Once the government halted payments, Sri Lanka’s creditors refused to extend additional loans. In May, as inflation drove up the cost of food and fuel — and medicine shortages became rampant — large demonstrations demanded the president’s resignation.

The Rajapaksa family had long relied on support from the Sinhala poor and middle classes, courting their votes with promises to end the threat of terrorism. That no longer seems to work. Ultimately, it wasn’t the war crimes against Tamils nor their stoking of hatred against Muslims that ousted Sri Lanka’s ruling family, but foreign debt and a collapsing economy.

What happens now?

While Wickremesinghe, a six-time prime minister who has never completed a full term in office, enjoys support among Western politicians, many Sri Lankans are unconvinced, and point out his inaction against the Rajapaksas. And some protesters likely blame the economic crisis on his liberalization policies, like his long-standing support for pro-market reforms.

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There’s little chance for a quick resolution to Sri Lanka’s compounding crises. The country’s ruling elites have shown little interest in heeding the protesters’ demands. With the economy in tatters and foreign creditors wary of Sri Lanka’s ability to repay its debts, there’s little relief in sight for ordinary Sri Lankans.

Nor has the protest movement meaningfully addressed the matter of Sinhala Buddhist majoritarianism. That’s not an unrelated issue — conflicts over national identity have long plagued Sri Lanka, but also boosted the debt that has now brought the government to its knees.

Will Sri Lanka’s protesters accept Wickremesinghe as president, and go home? And can Wickremesinghe broker a bottom-up process of reconciliation and power-sharing between the country’s various ethnic communities — as well as restructure the country’s external debts and jump-start the economy? Anything else seems likely to leave the country vulnerable to continued unrest.

Fathima Cader is a lawyer and adjunct professor at the Faculty of Law at the University of Windsor in Ontario.

Zachariah Mampilly is a professor at the Marxe School of Public and International Affairs and an affiliated faculty member at the City University of New York (CUNY) Graduate Center.