Sri Lanka: Election & Economic Collapse

Sofia Gevorgian

Ousting Sri Lanka’s president and prime minister amidst economic mismanagement and collapse, the parliament elected Ranil Wickremesinghe as the country’s new president on July 20, 2022, who up until recently served as prime minister.

The Rajapaksa family has maintained, and abused, power within their government for decades, and Gotabaya Rajapaksa, who led the government to victory in the 1983-2009 Sri Lankan Civil War as defense minister, was elected president in 2019.

Sri Lanka’s economic decline began in 2019, when Gotabaya’s tax cuts caused an approximate 25% reduction in revenue. The 2020 pandemic went on to cripple the tourism industry that largely contributed to paying back foreign debt, and because the nation imported more than it exported, its foreign reserves dried up; foreign debt was so high they could not afford the interest to continue keeping them afloat with new payments.

In April 2021, the government banned chemical fertilizers in an attempt to transition wholly to organic agriculture, but rice production fell 20% in the first six months, and though the ban was lifted, it was too late for farmers to recover from the loss. The reduction of imports and worsening economic crisis prevented farmers from being able to afford fertilizers, and the food shortage only grew from there.

Due to an inability to import necessities, protests emerged in March 2022 but were met violently by the government. Protesters were demanding the resignation of the Gotabaya Rajapaksa and his government, which was largely constituted of his family.

By June 2022, inflation climbed to over 57.4%, cooking gas was 3 times higher than a few months before, and the country ran out of printing paper, so school exams were canceled. Foreign currency reserves in 2019 stood at 7.6 billion, 1.93 billion in March 2020, and 50 million in July 2022, so foreign currency could not be spent to import necessities such as fuel; thus, Sri Lanka temporarily halted the sale of petrol as there was only enough for one more day. Moreover, 22% of Sri Lankans needed food aid and 5/6 families skipped meals.

In July 2022, protesters broke into the deserted President’s House, and shortly after, President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe resigned. The government will now be looking to take loans of billions of dollars to pay for essential imports as Sri Lanka grapples with economic fallout under Ranil Wickremesinghe’s unpopular presidential leadership.