Following months of economic, political, and social turbulence in Sri Lanka, thousands of protesters stormed key government buildings in the capital Colombo on Saturday, including the official residence of President Gotabaya Rajapaksa.
Rajapaksa has announced he will resign on July 13, Sri Lanka Parliament Speaker Mahinda Yapa Abeywardena told the media.
Protesters later set fire to the personal residence of Prime Minister Ranil Wickremesinghe, who has also offered to resign.
At least 50 people, including journalists and policemen, have been injured in the unrest.
Protesters remain at the president’s house, the Presidential Secretariat, and the official residence of the prime minister, known as Temple Trees, saying they will continue to occupy the buildings until the president and the prime minister officially resign.
How did it come to this, and what is the likely road ahead for Sri Lanka?
How did we get here?
- Sri Lanka has been facing balance-of-payment issues since the 1950s, and has bridged the gap between imports and exports through dollars earned from borrowing, tourism and remittances from foreign workers.
- After being elected in 2019, President Gotabaya Rajapaksa slashed taxes, which deprived the state of much-needed income.
- This led rating agencies to downgrade Sri Lanka’s credit ratings, which made it harder for Sri Lanka to borrow from international capital markets.
- Due to the COVID-19 pandemic, earnings from foreign tourists and remittances plummeted. Economists warned that Sri Lanka might not be able to repay its foreign debt and urged the government to approach the International Monetary Fund (IMF).
- During 2022, inflation in Sri Lanka skyrocketed to almost 55 percent. Central Bank Governor Nandalal Weerasinghe said that inflation could rise to 70 percent in the coming months.
- The growing economic crisis started a series of protests that began on March 31 and that culminated in the storming of the president’s residence on July 9.
The Rajapaksa legacy
- The Rajapaksa family has dominated Sri Lankan politics since 2005, following the election of Mahinda Rajapaksa as the country’s president.
- Gotabaya Rajapaksa, the younger brother of Mahinda, won the 2019 presidential election in a landslide. This was followed by a 2020 general election in which his party won an overwhelming majority in parliament.
- He lost popularity following a number of policy errors, especially a disastrous agricultural policy.
- If Gotabaya Rajapaksa resigns on Wednesday, he will be the first Sri Lankan president who was unable to complete his tenure. The only parallel in Sri Lankan history is the resignation of Prime Minister Dudley Senanayake in October 1953 following a hartal – a mass protest involving strike action and civil disobedience.
- The current crisis undermines the Rajapaksa dynasty, and political analysts say the Rajapaksas are a spent force in Sri Lankan politics, at least for the next few years.
The road ahead
- Following the resignation of the president, a government headed by the speaker of parliament is expected to lead the political transition to a new administration.
- However, the parliament must choose the next president within a month, and it is unclear whether members of parliament will be able to elect someone who can garner the support of the majority of lawmakers (113), as well as legitimacy in the eyes of the public.
- President Rajapaksa’s party still holds a majority in parliament. Without their corporation, a credible and legitimate government can not be elected and mass protests may continue.
- Sri Lanka is also in the middle of discussions with the IMF for an Extended Fund Facility (EFF) lending arrangement, and needs a functioning government to continue its negotiations. The IMF and other countries have urged Sri Lanka to reach a political settlement as soon as possible.
- A stable government would also help the country’s ability to negotiate an IMF agreement and implement policy recommendations.