A political reckoning in Sri Lanka in the face of the growing debt crisis

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COLOMBO, Sri Lanka (AP) — Sherry Fonseka joined millions in 2019 when she elected President Gotabaya Rajapaksa, a military strategist whose brutal campaign a decade earlier helped end Sri Lanka’s 30-year civil war.

Now he is one of thousands who have been protesting outside the President’s office for weeks, calling for Rajapaksa and his brother Mahinda, who is Prime Minister, to step down for leading the country into its worst economic crisis since independence from Britain in 1948.

With the island on the brink of bankruptcy, Fonseka, who owns a small clothing store in the capital Colombo, has used his own savings to pay the salaries of his 30 employees. But he knows he’ll have to let her go soon and knows who’s to blame.

“We all thought we made the right decision (choosing Rajapaksa) but we realized we were wrong. We should have the backbone to tell the people and the world that we made a mistake,” he said.

Protests have erupted across the country in recent weeks demanding Rajapaksa’s resignation.

The protests highlight the dramatic downfall of the Rajapaksas from Sri Lanka’s most powerful political dynasty in decades to a family striving for power. Despite allegations of atrocities during the civil war, Gotabaya and Mahinda, a former president, remained heroes to many of the island’s Buddhist Sinhala majority and were firmly at the forefront of Sri Lankan politics before the revolt of earlier supporters such as Fonseka.

“The pendulum has swung from ‘it’s all about the Rajapaksas, they are the people who saved this country’ to ‘it’s because of the Rajapaksas that the country is ruined now,'” said Harsha de Silva, an economist and Opposition MPs.

The unraveling of Sri Lanka’s economy was quick and painful. Imports of everything from milk to fuel have plummeted, leading to severe food shortages and prolonged power outages. People had to queue for hours every day to buy essentials. Doctors have warned of a crippling shortage of life-saving drugs in hospitals and the government has suspended payments on $7 billion in foreign debt due this year alone.

“The Rajapaksas have clung like an octopus to every aspect of public life in Sri Lanka,” de Silva said. “They ran it like it was their kingdom. They wished it and they did it – that’s how it was and the people were with them.”

President Rajapaksa has defended his government, blaming the pandemic and Russia’s war in Ukraine in part. “This crisis was not caused by me,” he said in a speech last month, adding that his government is working hard to find solutions. This includes, after repeated requests, asking for help from the International Monetary Fund and the World Bank.

But as protesters boiled, the President and Prime Minister have changed tact in recent weeks. They have admitted mistakes they made that exacerbated the crisis, like imposing a short-lived ban on chemical fertilizer imports last year that hurt farmers badly and admitting they should have requested a bailout sooner.

Influential Buddhist monks have urged Rajapaksa to form an interim government under a new prime minister, signaling a further decline in the family’s image as protectors of the country’s 70% Buddhist Sinhala majority. Some observers say it’s too early to measure how much support the Rajapaksas have garnered from among their hardcore base, but for many their response was too small and too late.

“Several missteps are now being recognized across government, but it is one that has cost the people a tremendous amount,” said Bhavani Fonseka, a senior researcher at the Colombo-based Center for Policy Alternatives.

The Rajapaksas were a powerful landowning family that dominated local elections in their rural southern district for decades before rising to the forefront of national politics with the election of Mahinda in 2005. He remained in power until 2015 and in 2009 oversaw the end of the civil war against ethnic Tamil rebels before losing to opposition led by his former aide.

Suicide bombings that killed 290 people on Easter Sunday 2019 paved the way for the return of the Rajapaksas, this time as Gotabaya launched a high-profile nationalist campaign that sparked outrage and disillusionment with the previous government over the attacks.

He vowed a return to the muscular nationalism that had endeared his family to the Buddhist majority, and also to lead the country out of an economic crisis with a message of stability and development.

Tourism had plummeted in the aftermath of the bombings, and Sri Lanka desperately needed to boost its revenues to service a slew of foreign loans for bubbling infrastructure projects. Some were Chinese money and commissioned under his brother’s presidency, but had made no profits and were instead collecting debts.

Just days into his presidency, Rajapaksa passed the biggest tax cuts in Sri Lanka’s history to boost spending, although critics warned it would shrink the government’s finances. According to Nishan de Mel, Managing Director of Verité Research, Sri Lanka’s tax base has fallen by 30%.

“If you do something like that, you have some kind of internal analysis or document that shows why these cuts could help the economy. There was nothing like that,” de Mel said.

The move prompted immediate punishment from the world market as lenders downgraded Sri Lanka’s ratings, making it unable to borrow more money as its foreign exchange reserves continued to shrink. Then the coronavirus struck, further wrecking tourism as debt soared.

Analysts say the Rajapaksas’ response to economic challenges underscores the limitations of their strongman policy and the near monopoly of their family in decision-making, which relies heavily on the military to enforce policy and legislate to protect independent institutions to weaken.

Three other family members of Rajapaksa were in the cabinet until early April, when the cabinet resigned en masse in response to the protests.

“Their entire political ideology and credibility is in serious crisis,” said Jayadeva Uyangoda, a veteran political scientist.

But many fear things will only get worse before they get better. A divided and weak opposition with no parliamentary majority has kept the Rajapaksas in power. An IMF bailout could result in tough measures exacerbating people’s plight before relief comes.

Meanwhile, the focus remains on the protests that are drawing people across races, religions and classes. For the first time, middle-class Sri Lankans have taken to the streets in large numbers, Uyangoda said.

They include Wijaya Nanda Chandradewa, who joined the crowd outside the President’s office on Saturday. Chandradewa, a retired government worker, said he fell for Rajapaksa’s promise to rebuild a Sri Lanka scarred by the 2019 bombings.

“He said there will be a country and a law – now there is neither the law nor the country,” Chandradewa said, adding that the only option now is for Rajapaksa to quit.

“He showed us a fairyland and deceived and misled us,” he said. “We need to fix our mistakes and build a system to find the right leader.”

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Pathi reported from New Delhi.

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