Sri Lanka faces an inflection point
The humanitarian ramifications of the crisis in the island nation must be effectively addressed because it has implications that reach beyond the country’s borders
Sri Lanka is in the eye of a perfect storm, a crisis with social, political, economic and humanitarian ramifications. We have witnessed the emergence of a multiclass people’s movement, largely peaceful, but full-throated in the anger it expresses against the political leadership for sins of commission, injurious acts that eviscerated the country’s economic fortunes, corruption and grievous shortcomings in governance.
South Asia’s oldest democracy faces an inflection point in its history. The target of the concentrated anger is the political clan of the Rajapaksas, or “dynasty” — the family that has dominated Sri Lankan politics from 2005, won the war against Liberation Tigers of Tamil Eelam, but did not practise the transformative politics needed to effect a reconciliation between the Sinhalese and Tamil communities, and weakened democratic institutions with authoritarian governance.
The island nation’s foreign exchange reserves are at a level that can barely sustain a week’s worth of imports. Sri Lanka is in danger of defaulting on annual repayments of its foreign debt.
The profligacy of successive Sri Lankan governments is much to blame for this state of affairs; budgetary and current account deficits have characterised the country’s financial governance, and Sri Lanka’s economic woes have been building up for more than a decade. While the country needed infrastructure, Chinese projects such as the Hambantota harbour development and the Matalla airport (known as the world’s emptiest airport) have been white elephants — more bling than beneficial. Despite the end of the civil war, large budgetary outlays on defence have outstripped spending on health and education.
Gotabaya Rajapaksa, who came to power in 2019 promising an era of national splendour and prosperity, is held responsible for policy decisions such as a reduction in taxes that resulted in a fall in cash reserves, and the ban on the import of chemical fertilisers and pesticides resulting in the virtual collapse of the agricultural sector, that pushed the economy over the brink. The Easter Sunday bombings of 2019, Covid-19, its economic costs and the impact on tourism — a major incomeearner — together with the global economic fall-out of the Russia-Ukraine war, deepened Sri Lanka’s adversities.
The need of the hour is the restoration of political, and most importantly, economic stability so that the stressed population, particularly the poorer sections, do not suffer more. The restructuring of Sri Lanka’s foreign debt is imperative and needs to be brought to a sustainable level in the near-term. All this will require a slew of urgent economic and financial policy initiatives by the new government, and deftly handled negotiations with creditors and financial institutions, including the International Monetary Fund.
The continuance of Gotabaya Rajapaksa as president is untenable if some semblance of normalcy is to return. Speculation of a military take-over seems overblown, although in the eyes of the Sinhalese majority particularly, the army is popular, and enjoys goodwill. It is unlikely however, that a “Myanmar solution” can apply in Sri Lanka since the army may well have realised that it is not equipped to win the battle against economic collapse and financial mismanagement.
The current protests include not only the majority Sinhalese but also minorities — the Tamils and Muslims — although nationalist Tamil politicians in the North and East have been counselling people in these areas to stay away from the protests, fearing a dilution of their political agendas. The youth, who constitute a visible and vociferous segment of the protesters, say they wish to rise above old divisions and redress the wrongs done to minorities. This is a good augury but majoritarian political inclinations have always been the serpent in Sri Lanka’s Eden and will not be easily vanquished.
Sri Lanka’s political parties are yet to craft a viable strategy to deal with the crisis facing the nation. Whether the newly-appointed (but veteran) prime minister (PM) Ranil Wickremesinghe will be able to steer the country out of the economic crisis is the question. For this, he needs both national and international support. The abolition of the executive presidency is a demand of the protestors and effecting the constitutional measures necessary for this with adequate parliamentary support will be a litmus test of the PM’s commitment to change and help dispel views in some quarters that he is a Rajapaksa choice, brought in to protect the dynasty’s political and material interests.
India’s help to Sri Lanka, which has included two Lines of Credit of $1.5 billion each for food, medicines and other essentials and over $2 billion as deferral of payments from the Central Bank of Sri Lanka to the Reserve Bank of India, underscores its role as a firstresponder. China, India’s geopolitical rival on the island, has been less dexterous, tending toward a hard-nosed approach on debt repayments (10% of Sri Lanka’s total foreign debt is owed to China) and displaying low levels of sensitivity to the pain of the people.
Perhaps the time is now right for India to consider a programme of assistance that will provide succour to the most-affected segment of the Lankan population, on the lines of the National Rural Employment Guarantee Act in India. Like the housing programme under which India built 50,000 houses in the North and East and in the central highlands after the civil war, this could be administered through a United Nations agency. The humanitarian ramifications of the crisis in Sri Lanka must be effectively addressed because it has implications that reach beyond that country’s borders. Also needed is a smartly-executed communication strategy to counter false news on social and other media that frequently surfaces against India.