The reason why Sri Lanka economy collapsed began in 2019. Extremist bomb attacks on churches and hotels and then the tourism sector began to crumbling down. Furthermore, the reason why Sri Lanka went bankrupt was the failure to pay foreign debts worth 51 billion US dollars. The government also ran out of dollars, so it was unable to finance the import of basic goods including fuel. The effects of Sri Lanka’s bankruptcy peaked when hundreds of thousands of demonstrators stormed into the presidential palace in the capital Colombo, and “party” using facilities such as the swimming pool and presidential chambers.
Sri Lankan President Gotabaya Rajapaksa fled off the coast on a Navy ship. Protesters overrun the palace. He is planning to resign. So, why did Sri Lanka go into crisis and go bankrupt until the people occupied the presidential palace? Let’s discuss it.
Why Sri Lanka Economy Collapse? Who is Gotabaya Rajapaksa
First, we first know who Gotabaya Rajapaksa is the current President of Sri Lanka. The 73-year-old has been president since 2019, and is a member of the Rajapaksa breed that has dominated the politics of Sri Lanka for decades. In 2009 he witnessed the end of a long, deadly civil war when Gotabaya ran the security services. Under Mahinda Rajapaksa’s rule, Sri Lanka moved closer to China and borrowed billions of dollars for major projects such as cricket stadiums, airports and deep-sea ports.
Why did Sri Lanka have an economic crisis?
Sri Lanka’s vital tourism sector was first hit by extremist bomb attacks on churches and hotels in 2019, then by the coronavirus pandemic. Sri Lanka’s coffers are being drained further by the government’s tax cuts. Also, the government is running out of foreign currency to import everything from medicine to food and fuel. Even with help from India and other countries, Sri Lanka defaulted on its US$51 billion foreign debt in April. Sri Lanka then held bailout talks with the International Monetary Fund or IMF for months.
How did the crisis of Sri Lanka Affect People?
Sri Lankans have for months experienced shortages of medicine and food and power cuts. Sri Lanka’s crisis was exacerbated by gas stations running out of petrol and diesel, despite requests for oil discounts to Russia and other countries. Its unofficial inflation rate is the second highest after Zimbabwe’s, making many goods too expensive for many to buy. The United Nations warns Sri Lanka is facing a dire humanitarian crisis. Millions of people already need help. More than three-quarters of Sri Lanka’s population is reducing their food intake due to severe food shortages, the United Nations says.
How is Rajapaksa still in office?
After months of Sri Lankan protests broke out, Rajapaksa loyalists went on a rampage in May. At least nine people died in the nationwide violence. While the homes of ruling party members were burned. Mahinda Rajapaksa later stepped down as prime minister with security forces escorted from his residence, but Gotabaya Rajapaksa persisted and appointed veteran politician Ranil Wickremesinghe, 73, as prime minister. However, Ranil Wickremesinghe showed little effort. So, Protesters set fire on his house. Even as he offered to resign as well. The Sri Lankan PM was not at home when the fire was set.
What Happen after Sri Lanka Collapsed?
According to the speaker of parliament, Gotabaya Rajapaksa will formally resign on Wednesday (13/7/2022) to ensure a peaceful transition. His successor must be voted on in parliament within a month of Gotabaya Rajapaksa stepping down. But the speaker of parliament has promised to appoint a new leader within a week. The problem is, as of Sunday (10/7/2022) it was not clear who could muster enough support among MPs to replace Gotabaya Rajapaksa. Thus, the reasons why Sri Lanka can become a crisis and get worse can also increase if you don’t get the right leader.