Sri Lanka is unlikely to immediately overcome the chaos as the next government faces an uphill task of addressing shortages of essentials such as food, medicine, and fuel
Embattled President Gotabaya Rajapaksa agreed to resign as the months of discontent in Sri Lanka came to a head with thousands of protesters storming his official residence. The country’s opposition parties were due to meet to discuss the formation of a new government even as Rajapaksa’s whereabouts were unclear.
The parties together have the 113 members required for a majority in Parliament. They are expected to request Rajapaksa to install the new government before resigning.
But Sri Lanka’s troubles remain far from over. The country is unlikely to immediately overcome the chaos as the next government faces an uphill task of addressing shortages of essentials such as food, medicine, and fuel.
A peaceful transition of power is among the other immediate challenges the country faces as continuing instability could also frustrate the talks for the restructuring of debt and the raising of funds.
Sri Lanka, which needs $6 billion this year to buy essentials and to stabilize the economy, has a monthly fuel bill alone amounting to about $500 million. Suppliers have been reluctant to provide fuel as Sri Lanka has struggled to pay for it, prompting the suspension of petrol sales.
The cascading impact of the economic crisis has also led to the closure of schools, and delays in medical procedures amid a shortage of drugs and equipment. The United Nations has warned of a potential humanitarian crisis against this backdrop.
Food and medicines have not been transported in many cases due to acute fuel shortages. Fresh farm produce has been unable to make it to cities and people have found it difficult to travel. The airlines have been asked to ensure they are carrying adequate fuel for return flights due to a shortage of jet fuel.
The inflation is at a record high of 54.6%. The food prices have increased by five times and about two-thirds of Sri Lankans are estimated to be struggling to have enough meals.
A new agreement with the International Monetary Fund (IMF) for a $3 billion bailout is expected to take months even as the talks with it have suffered because of the continuing upheavals. Sri Lanka has been negotiating with IMF to restructure billions of dollars in debt it has defaulted on.
The new government needs to submit a plan on debt sustainability to IMF in August before an agreement could be reached. There have been doubts about whether the new dispensation could do more than what the previous government was doing. The new government has to agree on IMF-backed economic reforms, which some opposition parties expected to be a part of it may find difficult to accept.
The negotiations with the IMF have been complicated because of Sri Lanka’s bankruptcy. In April, Colombo announced the suspension of repayment of loans due to a foreign currency shortage. Sri Lanka needs to repay $28 billion of its total foreign debt of $51 billion by the end of 2027. It has struggled to even import essential items such as fuel, food, and medicines as it ran out of foreign exchange reserves. At least 15 people have succumbed to heatstrokes as they stood in fuel lines while the country repeatedly ran out of petrol.
Rajapaksa remained defiant until Saturday in the face of calls for his removal for mismanaging Sri Lanka’s economy and causing economic ruin. He relented in May and removed his brother, Mahinda Rajapaksa, as the prime minister. Mahinda Rajapaksa’s successor, Ranil Wickremesinghe, who has been involved in talks with the IMF and the World Food Program, also failed to inspire much confidence.
Wickremesinghe came to be seen as an instrument to perpetuate the Rajapaksas’ hold over power before he too was forced to announce his resignation as the protesters stormed his private residence and set it afire.
The Rajapaksa family has dominated politics for close to two decades and held the top positions of president, prime minister, finance minister, and other key cabinet posts on the back of an ultranationalistic agenda. Things came to a head as the prolonged mismanagement of the economy and corruption pushed the country to bankruptcy. Protesters have been calling for the Rajapaksas’ ouster since March as the nation of 22 million grappled with a dire economic situation.
The crisis hit Sri Lanka as it was overcoming a three-decade civil war triggered over the discrimination against the minority Tamils in the 1980s. The war ended in 2009 but the Rajapaksas, who have been accused of running the government as a family business, continued their majoritarian Buddhist Sinhalese policies, which were among the causes of it.
Gotabaya Rajapaksa was accused of war crimes when he was the defence secretary under Mahinda Rajapaksa’s presidency. The siblings ended the civil war through a brutal military operation, turning a blind eye to widespread rights abuses.
Gotabaya and Mahinda Rajapaksa’s father, Don Alwin Rajapaksa, was a lawmaker in the 1950s and 1960s. Mahinda Rajapaksa led the family’s ascent to the highest echelons of power. He first became the prime minister before serving as the president twice from 2005 to 2015.
The Rajapaksas lost power in the 2015 elections but returned to helm the country with Gotabaya Rajapaksa as the president in 2019 thanks to his majoritarian Buddhist Sinhalese agenda and projection as the strongman the country needed. Mahinda Rajapaksa was inducted into the government as prime minister.
Basil Rajapaksa was the finance minister until last year and presided over Sri Lanka’s worst economic crisis since it gained independence from the British over seven decades back in 1948. The inflation hit a record high of 54.6% in June and was feared to mount to 70%.
The COVID-19 pandemic also came as a major jolt to the Sri Lankan economy as it hit the remittances from workers overseas and the pivotal tourism sector the country has come to be heavily dependent upon. There separately was a build-up of government debt amid rising oil prices. A ban on chemical fertiliser imports in 2021 damaged agriculture before it was rescinded in November.
The downward spiral coincided with high energy prices and food inflation afflicting much of the world. Sri Lanka’s woes increased further as the sanctions imposed on Russia over its invasion of Ukraine disrupted global food supply chains and increased energy prices and sparked largely peaceful protests in March. Demonstrators have been traveling to Colombo for protests over the economic ruin despite a grave shortage of fuel. Closure of schools and rationing of fuel for essential services fuelled anger in the cash-strapped country.
Sri Lanka’s options so far have been limited as oil and gas prices have skyrocketed because of the Ukraine war and prompted Gotabaya Rajapaksa to even seek the help of Russian President Vladimir V Putin, a global pariah. In a tweet, Rajapaksa said he phoned Putin to ask him for “credit support” to import fuel three days before protesters stormed his residence and sent him packing.
Sameer Arshad Khatlani is a journalist and the author of The Other Side of the Divide: A Journey into the Heart of Pakistan