Sri Lanka is Being Held Hostage By Its President
As the country crumbles, Gotabaya Rajapaksa remains in office.
by Amita Arudpragasam
6 June 2022
The stories coming out of Sri Lanka are devastating. The elderly are dying in long fuel queues, families are forgoing meals, schools are without paper and hospitals lack drugs. Facing its worst economic crisis since independence, Sri Lanka doesn’t have enough foreign exchange reserves for fuel, medicine or gas.
Amid the shortages, rising inflation and 13-hour-long power cuts, nationwide protests that began in March have since steadily grown. The main demand has been for accountability – namely, for president Gotabaya Rajapaksa to resign.
The protesters have secondary demands too. They want to abolish the executive presidency, end corruption, audit elected representatives, provide a social security net for the vulnerable, and more. The thousands streaming in and out of ‘Gota Go Gama’, the protest camp in the capital with its own library, legal-aid centre and cinema, represent over 200 organisations. Many are not affiliated to a group at all. When government representatives pin the protests on opposition parties, or other groups try to claim ownership over the movement, backlash from those gathered follows swiftly.
A crisis of mismanagement.
Protesters blame government corruption and mismanagement for the crisis. After Rajapaksa was elected in 2019, appointing his brother Mahinda as prime minister, he introduced tax cuts that led to credit downgrades and an agro-chemical fertiliser ban that devastated the country’s agricultural yields. Rajapaksa used his sweeping mandate to reinforce Sinhala Buddhist hegemony, centralise power and undermine institutions that tackle corruption instead of addressing the country’s pre-existing macroeconomic vulnerabilities.
Rajapaksa’s critics come from a range of backgrounds, from Sinhala Buddhists to persecuted groups like Muslims and Tamils. They are also ideologically diverse, as the regime’s policy isn’t rooted in a single economic school of thought. In 2007 the Rajapaksas were the first government to borrow using international sovereign bonds, which constitute the largest share of Sri Lanka’s external debt. Successive governments would then depend on external refinancing to meet debt repayment obligations. The increased dependence on financial markets and a spate of regressive tax cuts introduced after the 2019 election might position the Rajapaksas within a neoliberal or pro-market camp. But that characterisation doesn’t adequately describe the regime’s policies.
Under the Rajapaksas, market competition has been far less important than cronyism and connections. Favour was distributed through import licences or targeted tax breaks to political patrons that in turn propped up family rule. An almost compulsive desire to control the economy also took hold. In 2019, the government would strengthen protectionism through import restrictions and advocate for “home-grown solutions” to Sri Lanka’s economic woes.
Simultaneously the Rajapaksas would slam policies and institutions linked to neoliberalism — including the IMF and credit-rating agencies, whose assessments are critical to affordable debt refinancing. One Rajapaksa-appointed Central Bank governor said he would find alternatives to neoliberal policies, while another said Sri Lanka didn’t need the neoliberal restructuring advice of the IMF. It’s no surprise, then, that government detractors today include advocates of free trade and pro-market policies as well as leftist groups and trade unions.
Few protesters are linking the Sri Lankan economic crisis to the global debt crisis, the slowdown in global growth following the war in Ukraine, or the rise in global commodity prices. This is likely because this would allow the government to dodge responsibility for its own mismanagement. One would also expect calls for global solutions like debt moratoriums or the reform of international financial institutions to be championed by the very government actors struggling to repay debt. But Sri Lankan policymakers have instead rejected grants, insisting the country’s debt is sustainable and pretending the crisis is just a politically-motivated fabrication.
Clinging to power.
As the symptoms of the crisis worsened from March, the government found itself deeply unpopular. When protests intensified in early April, 26 cabinet ministers handed in their resignations. But just a few hours later, ministers were reshuffled back into key portfolios. Pretensions of accountability were combined with suppression, as the government imposed a state of emergency, curfews and a social media ban, while the police used tear gas and water cannons, arrested protesters and assaulted journalists.
On 12 April, Sri Lanka temporarily suspended debt payments to international creditors. Some changes – the appointment of a career Central Bank governor, a relatively competent minister of finance, and a credible advisory committee on debt restructuring – were substantive. The debt restructuring team began technical discussions with the IMF. The Central Bank started to address the currency collapse that occurred after unsustainable attempts to fix the exchange rate failed. Finance minister Ali Sabry admitted Sri Lanka should have approached the IMF and restructured its debt much earlier. At the end of April, trade unions launched a nationwide general strike, the first of its kind since the 1980s, which they threatened to prolong if there was no accountability. Yet still, the only resignations which mattered – those of the president and prime minister – didn’t materialise.
The family has refused to give in without a fight. Supporters of the prime minister were bussed to his official residence for a ‘show of strength’. Pro-Rajapaksa groups armed with sticks then proceeded to two protest sites in Colombo, assaulting protesters, destroying food and aid tents and setting structures on fire. What followed was a public outcry of such force that the prime minister’s official residence was stormed, and he was forced to flee to a naval base for protection. He resigned the same day, and his cabinet was automatically dissolved.
Yet political stability remained then, as it does now, a mirage. With no prime minister in office and a deteriorating economy, the Central Bank governor threatened to resign, warning the economy would “collapse completely” without political stability. Political stability required the formation of a credible interim government and parliamentary custom demanded a prime minister at its helm who commanded the confidence of the house, such as the leader of the opposition. Sri Lanka’s opposition parties, impressively united, refused to take posts in the cabinet unless the president also resigned, or announced a timeframe in which he would do so.
For a few days, it appeared as if protesters might have their main demand met. But in a self-preserving move, the president appointed Ranil Wickremesinghe, leader of the United National Party, as prime minister – a man who has occupied the role frequently since first serving in 1993. Historically, Wickremesinghe’s style of governance has been progressive for minorities and women and less economically damaging. Some civil society activists applauded the appointment as an indication that political stability would return and economic recovery could begin. The diplomatic community also rushed to congratulate the new premier.
A pawn prime minister.
But political stability isn’t guaranteed. The appointment is neither the accountability nor the radical shift protesters have been demanding. It has alienated opposition parties, though they may still engage in confidence-and-supply arrangements. Crucially, Wickremesinghe has almost no public support – after the 2020 parliamentary elections, his party secured only one seat in Parliament. Perhaps just as unpopular as the Rajapaksas, Wickremesinghe’s past is littered with accusations of overseeing pro-government death squads.
In his most recent term as prime minister between 2015 and 2019, Wickremesinghe’s close allies were implicated in a massive corruption scandal for which they weren’t held accountable. Indeed, Wickremesinghe is perceived as protecting the Rajapaksas from accountability for both war crimes and corruption. His arrogance and removed leadership style has earned him a reputation as opportunistic and self-important, while fracturing his own party and preventing him from forming stronger parliamentary alliances.
This new prime minister is likely to extend the lifeline of the Rajapaksas – and of Sri Lanka’s culture of impunity. In a recent interview, the president’s cousin said: “Ranil is the pawn we have to take Gotabaya forward for the remainder of his tenure.” Indeed, Wickremesinghe has blamed the Rajapaksa administration he now works alongside for the economic crisis, saying that its “books had been cooked” in “an effort to show that Sri Lanka’s economy was normal, when it was not”. However, given Wickremasinghe’s political dependence on the Rajapaksas, it’s unlikely he will be able or willing to hold the family truly accountable. He has already downplayed the core demand of protesters – for president Rajapaksa to resign – as a “controversy”. Other stipulations, like the abolition of the executive presidency, are similarly unlikely to be met. The president’s party, Sri Lanka Podujana Peramuna, still holds a majority in parliament, and can block legislative reform counter to Rajapaksa interests.
Before things improve, economic hardship is likely to get worse. Wickremesinghe has warned of a possible food crisis in Sri Lanka from August onwards. The threat of violent unrest still looms large; the military and police have orders to shoot protesters, who continue to gather in Colombo. And yet–parliamentarians are spending more time discussing damaged property than the hardship inflicted by the economic crisis.
While many Sri Lankans are calling for calm and for non-violent forms of resistance, others, disillusioned by the culture of impunity and the lack of real change, applaud the violent resistance of the recent past.. And still, president Rajapaksa refuses to resign – holding an entire country hostage.
Amita Arudpragasam is an independent policy analyst from Sri Lanka.