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Sri Lanka’s protests boil over

The president has fled by military jet as protesters occupy government buildings amid the worst economic crisis in decades.

By Katie Stallard

Editor’s note: This piece was originally published on 13 July 2022 and has been updated in light of recent events. On 15 July, the speaker of Sri Lanka’s parliament announced that he had accepted Gotabaya Rajapaksa’s resignation and prime minister Ranil Wickremesinghe was sworn in as interim president. Parliament was due to convene on 16 July to begin the process of electing a new leader.

In the hours after the Sri Lankan president Gotabaya Rajapaksa agreed to resign on 9 July, the crowds of protesters who had taken over the presidential palace celebrated what felt like a historic victory. Many had walked for hours to reach the commercial capital, Colombo, to protest over the government’s handling of a worsening economic crisis that has caused severe shortages of food, fuel and medicines. Now they roamed the opulent residence, mobile phones in hand, documenting its extravagance. Some took selfies in the luxurious four-poster bed and lifted weights in the presidential gym; others leaped into the swimming pool.

But the crisis was not over. Rajapaksa – widely known as “Gota” – fled the country on a military jet in the early hours of 13 July without resigning, appointing the prime minister, Ranil Wickremesinghe, acting president. The protesters responded by storming Wickremesinghe’s office and entering the headquarters of the state television broadcaster, where they briefly disrupted transmission. The crowds have demanded that both Rajapaksa and Wickremesinghe resign (they had earlier set fire to the latter’s private residence), along with the entire cabinet, but instead Wickremesinghe declared a state of emergency and a curfew.

The acting president rescinded both orders, but he has tasked a group of senior military commanders with restoring “law and order” and the security forces have been using tear gas and water cannon against protesters. At least 30 people have been injured. Military helicopters have been seen flying over Colombo and there are fears that more violence could follow in the days ahead. Protest leaders have also warned that they could take “drastic actions” and that trade unions across the country would begin a “terrible, massive strike” if Rajapaksa and Wickremesinghe do not quit.

Sri Lanka is in the grip of a devastating economic crisis in which political leaders have declared the country “bankrupt” as it has all but exhausted its foreign currency reserves, defaulted on its foreign debt and struggled to import food and fuel, with inflation surging above 50 per cent. The World Food Programme warned in June that Sri Lanka, which has a population of almost 22 million, was suffering a dire humanitarian catastrophe, with 86 per cent of families estimated to have reduced their food intake or begun skipping meals to make their dwindling supplies last.

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The protests have been gathering pace since March. Much of the anger is focused on the Rajapaksa family, which has dominated the country’s politics for almost two decades. Gota, 73, first served as defence minister during the civil war that ended in 2009 (he has been accused of war crimes during this period), before being elected president in 2019. His elder brother, Mahinda Rajapaksa, 76, was president from 2005 to 2015, then prime minister from 2019 until he resigned amid the protests in May. Their younger brother, Basil Rajapaksa, 71, was finance minister until he stepped down in June. His whereabouts are currently unknown. All three brothers have been accused of cronyism and corruption, along with chronic mismanagement of the economy.

[See also: The Sri Lanka Easter attacks shattered nearly a decade of peace]

Sri Lanka once boasted among the highest median income levels in the region, with a sizeable middle class and one of the most highly educated populations in South Asia. But the country’s foreign currency reserves have been all but exhausted as imports have consistently exceeded exports over many years. The government also took on considerable foreign debt to finance ambitious (and highly questionable) infrastructure projects. The most egregious of these was a $1bn port financed by China; it was eventually handed over to Beijing on a 99-year lease in 2017 when Sri Lanka was unable to meet its repayments. In all, China accounts for approximately 10 per cent of Sri Lanka’s foreign debt – the country’s biggest creditors are Japan and the Asian Development Bank –  but Beijing has so far been reluctant to restructure those loans.

The coronavirus pandemic delivered a further blow to the Sri Lankan economy by devastating the tourism industry, a crucial source of income and foreign currency reserves. With those reserves now almost gone, Sri Lanka has struggled to import food, fuel and other necessities such as medicine. Bad decisions have compounded the crisis, with the government cutting taxes in 2019 and further reducing its revenue, then banning imports of chemical fertiliser in 2021 under the auspices of promoting organic farming to shelter remaining currency reserves. Crop yields fell and the ban was reversed, but it exacerbated the country’s food and foreign currency shortages because it was forced to buy more food from overseas.

Bailout talks with the International Monetary Fund (IMF) in June concluded without a deal, and analysts have warned that even if the protesters succeed in ousting Rajapaksa and his cabinet, the country faces a protracted crisis.

“Sri Lanka’s most pressing economic need now is a new bailout package from the IMF,” explained Michael Kugelman, the deputy director of the Asia programme at the Wilson Center, a Washington DC think tank. “But so long as Sri Lanka’s immediate political future is clouded with uncertainty the fund is unlikely to be willing to reach an agreement.” In the short term, Kugelman said, the country’s economic difficulties would probably intensify. Even if Sri Lanka does secure an IMF loan, he added, it would be accompanied by stringent and unpopular austerity measures.

Sri Lanka may stand to gain from broader geopolitical competition within the region, with India offering emergency assistance as it vies with China for influence. New Delhi has provided Colombo with a $55m credit line to import fertiliser and agreed to build several power plants, for instance, which was viewed by some analysts as a strategic victory over Beijing. Sri Lanka has also appealed to Russia for help with imports of fuel and Rajapaksa claimed to have had a “very productive” discussion with Vladimir Putin, the Russian president, on 6 July. The crisis has underlined the allure of Russian energy supplies elsewhere in the world despite the denunciations of Putin’s invasion of Ukraine by Western governments.

Just four days after the protesters took control of the presidential palace, those celebrations and the sense of victory turn out to have been premature. While Gota has left Sri Lanka and the speaker of parliament has insisted that he still intends to resign, he has yet to hand over power, and even if he does the protesters will not accept Wickremesinghe in his place. The most dangerous phase of this crisis may be yet to come.

[See also: Sri Lanka on the brink]

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