After mass protests asking for the government to resign (which it has largely refused to do) in which a number of people died, the country has now announced it has only a days worth of petrol left. Rich in many ways and having gotten through a brutal civil war, this begs a big question.. Why is Sri Lanka such a shit show now?
To read about the crisis in Lebanon click here.
Sri Lanka – A brief history
Formerly the British colony of Ceylon the country gained independence in 1948 as a parliamentary democracy and initially at least inclusive of the Sinhalese and Tamil communities.
As governments changed, so did the treatment of the Tamil’s and thus their slow move to radicalisation. During the 1960;s the nation drifted to the left aligning itself with both the Soviet Union and China. Ironically it also experienced a marxist insurgency in 1971, which was defeated, before declaring the Democratic Socialist Republic of Sri Lanka in 1972.
Despite the name though the country was far from Marxist and in the late 1970’s became the first country in South Asia to begin liberalising its economy. The suppression of the Tamil’s also continued during this time, which in 1975 led to the birth of the Tamil Tigers.
By 1983 the Sri Lankan Civil War would start, which would not end until 2009, after the Tamil Tigers were brutally repressed with there being many credible allegations of human rights abuses and war crimes. Being fully in the western orbit these crimes ere ignored, but the country was also to enter a period of peace and relative prosperity. What no one knew at the time though was that the country was setting up a ticking time-bomb, which has seemingly exploded now.
Why is Sri Lanka such a shit show?
Amazingly Sri Lanka is top of the Human Development Index and second in South Asia for GDP, but as things look right now, these are but mere statistics that do not tell the whole story.
The Government of Sri Lanka under president Gotabaya Rajapaksa has essentially made mistake after mistake since taking power, with huge tax cuts, which largely helped the rich (including these in government) save money, but also and quite obviously reduced the amount of money the government received.
Despite warnings from the International Monetary Fund (IMF) the country pulled the classic move of just “printing money”. All well and good, but as most would know also a key recipe for inflation and hyperinflation.
There were of course other factors which the government can’t be blamed for, such as Covid removing tourists, as well as remittances from overseas foreign workers dropping, but wherever the blame may lay the country simply does not have enough money to survive.
How much money does Sri Lanka have?
It quite simple terms Sri Lanka has $2.3 billion in reserves, but will owe $4 billion by the end of 2022. The country is for all intents bankrupt. And since 2019 when protests first began things have just gone from bad to worse with inflation at almost 20 percent and the basic necessities costing far more than they have ever done.
By 2021 the country declared it the worst economic crisis in the country for 73 years, the protests had become violent and people were getting killed.
What do the protestors in Sri Lanka want?
Most it would appear want the government to resign, although there are also pro-government rallies as well. The government who hold a majority in parliament, as well as the Presidency don’t want to resign, while the opposition say they won’t work with the government.
And the big elephant in the room is that neither the government, nor the opposition know a way of getting out of the crisis, nor magically raising billions of dollars out of nowhere.
How will Sri Lanka get through this?
IN the short-term it looks like it will become one of the many pseudo-failed states, with them being from a business point of view at least technically bankrupt. In reality the global bankers of the IMF and World Bank will likely come in with “life-saving” loans that involve years of debt for the country, while it is locked into the cycle of global capitalist neo-colonialism.
In the end though Sri Lankans will have to look squarely at themselves, how they have voted and how complacent they have been. Ignoring your poor and welcoming in the kind of tax benefits that only benefit you ultimately harm you. Greed can be a powerful weapon.