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Sri Lanka is in crisis as the small island nation's president Gotabaya Rajapaksa fled the country for the Maldives early Wednesday morning. His fleeing comes as protestors perpetrated an uprising, storming the Presidential palace on Saturday. Prime Minister Ranil Wickremesinghe has now been appointed as the successor, as detailed in the Sri Lankan constitution's line of succession.
Understanding the Situation
Sri Lanka's situation has been developing for several years as the nation's leaders have failed to react to the nations increasing debt crisis and external global problems. Expectedly, the citizens of the nation have become enraged over what they believe has been a persistent problem of corruption and incompetence that has thus plagued the country.
The global pandemic has pushed the Sri Lankan economy over the edge as tourism, the nation's largest source of revenue, was drastically halted. However, before the pandemic began, a series of government decisions intended to develop the country's infrastructure plunged the Sri Lankan debt into a dark abyss. In 2019, former president Gotabaya fulfilled his promise of cutting income tax nationwide. With a quarter of the nation's revenue drastically decreasing, the government's ability to repay its debts had further diminished. It is estimated that Sri Lanka owes upwards of $35billion to China, India, and several other Asiatic organizations.
Global crises such as the fuel and energy crisis have also affected the economy and social life of millions of Sri Lankans. Fuel, oil, medicine, and food prices have all drastically increased, out of reach for consumers to buy. With its foreign-exchange reserves bleeding, the nation cannot afford to purchase vital imports for its citizens. Inflation had hit a high of 30.2% in early 2022.
Sri Lanka has become the first Asiatic nation to default on its debts in over 20 years.
As a result of being unable to acquire essential commodities to support themselves and their families, Sri Lankans took to rioting and protesting. Social life is on the decline as the Sri Lankan government has imposed numerous state of emergencies, rolling blackouts, and mandatory curfews. Prime Minister Wickremesinghe had again charged another state of emergency in the city of Colombo today, where the majority of rioting occurred.
Although the President has fled, and where the anger of most protestors was directed, the Prime Minister is a no better option. The Prime Minister has also declared to resign his position as soon as possible. If he does not, the Sri Lankan protestors and rioters are expected to continue their wave of destruction again.
What next?
The International Monetary Fund (IMF), responsible for monitoring the international monetary system and global economic developments, has begun negotiating with Sri Lankan leaders on a possible economic bailout package. If negotiations are successful, Sri Lanka will start a painstaking road to recovery and political stability.