KATHMANDU (THE KATHMANDU POST/ASIA NEWS NETWORK) - Sri Lanka is experiencing the country's worst economic collapse in its history.
Remittances, the country's primary financial source, fell due to the Covid-19 pandemic, triggering the current crisis. Tourism, another mainstay of the income that contributed almost 12 per cent of the GDP, was also sapped by the virus outbreak.
Furthermore, the government's irrational decisions on failed economic management appeared unsatisfactory. Having banned the use of chemical fertilisers, the Rajapaksa government splurged on development projects, leading to a deepening of an economic disaster.
As a result, the annual inflation rate of Sri Lanka reached a record high of 54.6 per cent on June 2022 from 29.8 per cent in the previous month, leaving people unable to purchase food, fuel and medicine. The country has US$51 billion (S$71.6 billion) in loans, and its currency has collapsed by 80 per cent. The Lankan Finance Ministry estimates it needs US$6 billion to survive for six months, but the country has only US$25 million. With just peanuts in its basket, the country is on the verge of a humanitarian crisis and a bleak future; the fact that the political leadership has failed to garner the support of the people has made matters worse as international actors are unwilling to bail it out.
The economic collapse also worsened people's living standards as they skipped meals and queued up to buy fuel. If that was not enough, the country has recently faced a political crisis of an unprecedented scale as people came out on the streets to take things into their own hands, owing to the failure of the leadership to get things right.
What seemed to be an eternal cycle of rule from members of the Rajapaksa family came to an abrupt end as Gotabaya Rajapaksa conceded failure, and worried about his security, chose to flee the country. He emailed his resignation letter Thursday (July 14) night from Singapore, where he is hiding at the moment. The country is now in a state of emergency after Rajapaksa's ignominious exit.
The people who seemed too shy to speak about their problems for too long ended up occupying the presidential palace and setting the prime minister's residence on fire, effectively defenestrating Rajapaksa from leadership and the country itself. The people's anger results from years of misrule, even as political leadership focused on petty self-interests. This is a lesson for political leaders all over the world, not least those in Nepal, that once the people decide that enough is enough, there is no stopping the downfall of anti-people regimes.
Sadly, SAARC, as always, is non-existent at this hour of distress in one of its member nations. It is concerning that a South Asian neighbour is going further into a political and economic abyss without immediate help.
Sri Lanka still struggles to come to terms with the deep scars of the 25-year insurgency that left thousands dead, especially in the final years of the war when the Mahinda Rajapaksa administration brutally eliminated the insurgents and the public alike.
It remains a deeply divided nation even today, and a further delay in bailing the country out of the catastrophe may lead to other forms of social crises, including public looting and communal discord. The international community should assess these risks and act promptly to help assuage the Lankan people, and help the island nation recover from the ongoing crisis.
- The Kathmandu Post is a member of The Straits Times media partner Asia News Network, an alliance of 22 news media entities.
