Last week, protesters in Colombo stormed the residence of Gotabaya Rajapaksa, the President of Sri Lanka, who had fled the country and later resigned over e-mail. After months of rising prices and dwindling supplies of food and medicine, discontent in Sri Lanka has reached a fever pitch. (Rajapaksa’s brother, the Prime Minister, also resigned.) The country now faces a period of uncertainty, but also opportunity. It must navigate out of the current economic and political crises just a dozen years after the end of its brutal civil war, when, in 2009, the government, led by the Rajapaksa brothers, defeated a decades-long insurgency by the Tamil Tigers. (On Wednesday, Sri Lankan lawmakers voted to replace Rajapaksa with Ranil Wickremesinghe, an establishment figure whose house had already been set on fire by protesters. Two days later, security forces raided the main protest camp. Wickremesinghe said the uprising had been infiltrated by fascists.)
I recently spoke about the situation, by phone, with Ahilan Kadirgamar, a political economist at the University of Jaffna. During our conversation, which has been edited for length and clarity, we discussed the causes of the current crisis, the legacy of the Sri Lankan civil war, and where the protests might go from here.
What are we seeing in Sri Lanka? How would you characterize it? Is this a revolution?
This is by far the most formidable protest in the history of the country over the past two centuries. It has completely shaken up state and society. I characterize it as a revolt and not yet a revolution, because it doesn’t want to change fundamental social relations. It’s only looking for regime change. That has been the demand, and it has succeeded. They have chased away the President, but they are not thinking in terms of, say, changing social relations, or property relations. It hasn’t gone that far, but there’s this huge politicization of people that is also coming along with these protests. It’s not as if there’s some ideological vanguard that is pushing this protest forward. It’s through the practice of protest and larger waves of people coming out on the streets that it has become so powerful.
Four decades ago, the President at that time, J. R. Jayewardene, created an executive Presidency to be able to consolidate power for himself. And, since then, we’ve had this Presidency kind of similar to the French model, but with overwhelming powers, which the movement put the blame squarely on—especially the last President, who was just dislodged. And now there are also tremors to abolish the executive Presidency. They hope to bring stability to address the underlying causes of this political crisis, which is the economic crisis that has been unfolding. So, again, I would characterize it as a tremendous revolt, but not quite a revolution yet.
What were the causes of the economic crisis?
If you had to trace this economic crisis backward, the real aggravation was caused by the war in Ukraine, where global oil, commodity, and fertilizer prices have doubled or more. And in Sri Lanka it led to a foreign-exchange crisis, where we were unable to import many of the commodities necessary to run the economy. That’s why we are seeing so many shortages and tremendous price hikes. Compared with six months ago, the price of bread has tripled, the price of rice has tripled, the prices of petrol and diesel have more or less tripled.
The cost of living has gone through the roof. And the war in Ukraine has some part to play in it, but it goes further back. This is really a crisis of the external sector, or what we are calling here a “dollar crisis”—the lack of dollars for imports and to be able to repay our debt. With the pandemic, in March, 2020, it was obvious to us that we were very quickly heading toward this kind of a crisis, because a large amount of our earnings come from tourism. That was completely disrupted. And then foreign remittances—that is, from going to the Middle East and Southeast Asia as blue-collar or domestic workers—also started to decline, because of the disruptions in those countries with the pandemic.
It was also the gross mismanagement by the [Gotabaya] Rajapaksa regime, which came to power in 2019. They could have prioritized imports, they could have saved some of our foreign reserves to be able to wade through a crisis. It’s the gross management that led to such a severe situation.
But I would argue the crisis actually goes even further back. Sri Lanka went through a civil war for twenty-six years, from 1983 to 2009. The end of the civil war coincided with the global financial crisis of 2008. When Sri Lanka’s war ended, in May, 2009, there was a lot of global capital flowing into emerging markets. But Sri Lanka was actually seen as not only an emerging market but a postwar economy. So global-capital investors were euphoric about Sri Lanka to the point that, between 2009 and 2010, Sri Lanka had the best-performing stock market in the world—the Colombo Stock Exchange more or less quadrupled in eighteen months.
And, with that, the government borrowed extensively and invested in infrastructure. Because of the inflow of capital and the construction, they could show fairly high levels of growth for the first three years, on the order of eight per cent of the G.D.P., but there were no returns on it. And so, in my view, the crisis really started a decade ago with that kind of bubble investment, which was also cheered on by the Bretton Woods institutions and global financiers.
Aside from the economic impact, how did the civil war lay the ground for what’s going on now?
The Rajapaksa regime—President Gotabaya Rajapaksa, who just recently resigned, and his older brother Mahinda Rajapaksa, who became President in 2005, with Gotabaya Rajapaksa as the defense secretary under him and considered a very brutal character, with allegations of grave human-rights abuses—that regime finally defeated the Liberation Tigers of Tamil Eelam, considered one of the most brutal armed organizations. They were considered impossible to defeat, and the Rajapaksas defeated them in May, 2009, which gave them carte blanche to consolidate their regime. They had a landslide victory six months later, and part of it was because Sri Lanka was seen as stable because they had such a strong authoritarian regime. Their authoritarianism, combined with the development push—where they saw development as a solution to all of Sri Lanka’s problems, instead of considering the grievances of the minorities, and so on—was also the thrust of our economic trajectory.
But Sri Lanka also has a very strong democratic sensibility. Sri Lanka was the first country in Asia to get universal suffrage, way back in 1931. The British actually decided to do an experiment in Sri Lanka, because of mounting pressure from the ground at that time. So, well ahead of many European countries, all men and women got the right to vote in 1931. And that democratic sensibility continued, because when Mahinda Rajapaksa won the war many analysts were saying, “Now this regime is going to be there for the next two decades.” In 2015, they were dislodged. They were thrown out of power, but they were waiting in the wings to take it back. And they managed to do that in 2019, when the coalition government failed miserably on the economic front.
To go back to your question—2009, the war, militarization, authoritarian power, the euphoria, and the majoritarian nationalism were all part of consolidating the regime’s power, and the economic trajectory was set by that regime without democratic engagement.
My understanding is that the Rajapaksa regime was interested in developing closer economic ties with China, which was a hotly debated issue within Sri Lanka. The United States and India, which is very connected to Sri Lanka, had strong opinions about this. How big a change was the embrace of China, and did it have a role in the economic collapse we’re seeing now?
Sri Lanka actually has a long relationship obviously with India but also with China. It goes back to the [end] of the Korean War, when we imported rice from China and exported rubber. Then when Sri Lanka was part of the Non-Aligned Movement, from 1956 to 1976, we had a very close relationship with China, and that relationship gained traction again in the middle of the civil war, when Sri Lanka got support from various international actors in its fight against the Tamil Tigers. The United States was backing it, and so was India.