What is happening in Sri Lanka?

It is rare in these modern times to see a democratic nation go from prosperous to nothing in a span of a very short time. The world is witnessing an economic crisis in the penny-less Sri Lanka.

 |  7-minute read |   04-04-2022
  • ---
    Total Shares

Do you ever worry about not being able to arrange for cooking gas? Do you worry about a power cut spanning days? Do you worry about standing in a long queue just to get fuel?

Of course not. These scenarios in the modern-day world are unimaginable. Perhaps it happens in a country like Afghanistan, historically poor and ravaged by decades of war; but definitely not in a democratic country like Sri Lanka, with its scenic beach getaways for the world.

However, these unimaginable scenarios are happening in Sri Lanka. The island nation has run out of money, literally. Sri Lankans are standing in long queues just to get the most basic of daily needs, protests are erupting all over the country on why they have been brought to this stage of misery, the country is unable to afford imports of essential needs and the government – though still in power – seems clueless and worst of all, helpless.

So, exactly what is happening in Sri Lanka?

Here are the latest updates:

1. CABINET RESIGNS EN MASSE

All of the 26 Cabinet ministers in Sri Lanka’s government resigned with immediate effect on Sunday, April 3, 2022. However, President Gotabaya Rajapaksa and his brother, the Prime Minister of Sri Lanka, Mahinda Rajapaksa, remain in office. The government has said there are no immediate plans for the President and the Prime Minister to resign.

A new set of Cabinet ministers are to be sworn in today, April 4, 2022. Among those who resigned was also Namal Rajapaksa, son of the Prime Minister and nephew of the President, who served as the Youth and Sports Minister.

On the other hand, reports emerged that the President sacked his brother and Finance Minister Basil Rajapaksa from office. 

2. UNITY GOVERNMENT

After the Cabinet ministers resigned en masse, the Rajapaksa government called on the opposition parties to join them in making a ‘unity government’. The government has asked opposition leaders in the parliament to accept Cabinet posts and join them to restore the economy in Sri Lanka.

It needs to be noted that opposition parties have been protesting against the Rajapaksa family-run government and had demanded their resignation.

3. CENTRAL BANK GOVERNOR RESIGNS

Sri Lanka’s Central Bank governor Ajith Nivard Cabraal also announced on Monday that he’s tendered his resignation following the Cabinet ministers’ resignation. He had been against the International Monetary Fund bailout as well. Point to note here: Whenever in crisis, when the Central Bank Head throws up his hands, things are going to spiral more out of control – who doesn't remember the Taliban’s Afghanistan takeover?

4. SOCIAL-MEDIA BAN

The government of Sri Lanka banned access to major social media platforms like Twitter, Facebook, WhatsApp, Instagram as anti-government protests across the country intensified. The ban on social media came as a major anti-government rally was being planned.

For weeks, people have been protesting against the government for steering the country into the worst economic crisis in decades. A few days ago, protests even broke out outside of President Rajapaksa’s residence in Colombo, with some even trying to break into his residence.  

However, some people with access to VPN reached out to the world on various social media platforms, to tell their stories and also raise objections over the social-media ban. The ban was lifted during the second half of Sunday.

5. STATE OF EMERGENCY

The government declared a state of emergency in the island nation on Friday, April 1, 2022, following the violent protests. This gave the security forces of Sri Lanka sweeping powers to arrest and detain people on suspicion for long periods of time. A 36-hour curfew was also imposed across the country, making gatherings illegal. But despite this, the protests continued.

Now, the state of emergency remains in place but the curfew has been lifted.

One person even died at the protests in front of the President's residence after he climbed a transformer to protest against power cuts. It is reported that the man died of electrocution. 

6. INDIA DONATES RICE

Food prices are sky-rocketing in Sri Lanka. According to reports, one cup of tea at a streetside stall costs 100 Sri Lankan rupees (Rs 26) and the same price is paid for a pound of bread. Amid this, India has so far extended $2.4 billion in support to Sri Lanka to help it out of the crisis.

India has also started donating 40,000 tonnes of rice to Sri Lanka. According to reports, India is the only country that can get the essential food supply in a matter of days, as it may take weeks for supplies to reach from other countries. The rice donation comes ahead of the Sri Lankan New Year, held on April 13 or 14, when the price of rice also increases due to the demand.

On the other hand, Air India has scaled down the number of flights to and from Colombo due to poor demand. Earlier, there were 16 flights per week; now it has been cut down to 13 per week. Desi flyers are also rethinking their plans to take a trip to Sri Lanka due to its domestic turmoil.  

7. WHY DOES SRI LANKA HAVE NO MONEY?

sri-lanka---copy-647_040422022618.jpgSri Lanka is suffering from the worst economic crisis in decades. Illustration: Seemon/DailyO

Sri Lanka is currently neck-deep in debt, with Statista estimating it to be around $65 billion in 2019, which is 86% of the GDP. But reports say the crisis was Sri Lanka’s own making with roots back in the post-Civil War period. After the deadly Civil War in Sri Lanka, in 2006, the country went on a borrowing spree, trying to attract foreign capital. It worked for a while and lifted several million people out of poverty.

Between 2006-12, the external debt of the nation tripled; this was when some of the policies were halted to stabilise the economy. Sri Lanka relied heavily on tourism, but the Covid-19 pandemic wiped out 10% of its GDP that came from the sector.

To make matters worse, Sri Lanka also became obsessed with making agriculture independent of fertiliser use, leading to a fall in agri production and revenues from it.

Now, the President says that the crisis was not his government’s making, but that of the pandemic. The government intends to seek aid from the International Monetary Fund, which it had avoided for a long time.  

Read here in detail about what went wrong in the island nation.

Writer

Amrutha Pagad Amrutha Pagad @amrutha_pagad

Amrutha loves writing on Humour, Politics, Environment and Gender. She is a Senior Sub editor at DailyO.

Like DailyO Facebook page to know what's trending.