Conflict Alerts # 529, 14 July 2022
In the news
On 13 July, in a television briefing, Speaker Mahinda Yapa Abeywardena stated that President Gotabaya Rajapaksa had confirmed his resignation via a phone call. He added: “With regards to an official document signifying it, I was told that it would reach me within the day today.” President Gotabaya Rajapaksa had left Sri Lanka to the Maldives. Hours after that, Sri Lankan Prime Minister Ranil Wickremasinghe was appointed as the acting President.
On the same day, a crowd in Colombo from different parts of the island demanded that Prime Minister Ranil Wickremasinghe also step down. The crowd chanted: “We don’t want the robber Ranil, the bank thief, the deal thief!. Sri Lankan forces used tear gas at a massive scale to disperse the crowds throughout the day. At least 30 people were injured and one dead. The protestors breached the gate of his office and occupied the place, and vowed to stay at the PM’s office till his withdrawal from the position.
On 14 July, Gotabaya Rajapaksa sent the resignation letter through an email. Since Gotabaya faced protests in the Maldives, he has now been allowed inside Singapore as a “private visit” without any appeal for asylum.
Issues at large
First, the long-term economic mismanagement and large-scale corruption. The politicians and businessmen have been influential in Sri Lanka’s deterioration for years. In 1977, when Sri Lanka opened its doors to an open economy, its imports kept increasing while the exports remained at the same limited industries depriving the country of creating new sources of income. Since the end of the civil war in Sri Lanka, Mahinda Rajapaksa has been repeatedly accepting loans from China that led the country to fall into a debt trap.
Second, the failure of leadership. The political decisions taken by President Gotabaya Rajapaksa have been the key cause of Sri Lanka facing the dollar crisis. Since the government decided to hold the dollar at a fixed rate. Sri Lankan foreign employees began to send their remittances through unofficial means such as ‘undiyal’ and ‘hawala’. When Sri Lanka’s foreign currency shortages became a serious problem in early 2021, the government tried to limit them by banning imports of chemical fertilizer. Farmers were encouraged to use locally sourced organic fertilizers instead. This led to widespread crop failure. Sri Lanka had to supplement its food stocks from abroad, which made its foreign currency shortage even worse and led to an ultimate food crisis.
Third, quantitative easing and increased inflation rates. President Rajapaksa, in early 2019 introduced a tax cut in favour of top businessmen in Colombo; this made the government lose an income of more than 1.4 billion dollars a year. The government continued to print money to pay employees’ salaries and other state maintenance activities kept boosting its inflation rate and led to constant price hikes. Today, the citizens are deprived of their access to basic needs as the country does not have enough foreign currency to import fuel, gas and medicine. Essential services like public transportation and medical services do not function properly. Fuel and gas queues have been elongating for days.
First, the need for a new system. In the short term, an interim government of political intellectuals should be appointed for six months to address the basic needs of Sri Lankan citizens with food, fuel, gas, and medicine.
Second, legal actions should be taken against the Rajapaksas on corruption charges to bring back the stolen money that belongs to the public. A new system should be introduced to end the corruption chain in Sri Lanka for years and pave the way for young educated leaders to take roles in the functioning of the government.
Third, after six months, an election should be held to bring in a new government to the parliament.