By Gywnne Dyer
“How did you go bankrupt?” Bill asked (in Ernest Hemingway’s 1926 novel ‘The Sun Also Rises’). “Two ways,” Mike said. “Gradually and then suddenly.” Sri Lanka is much the same.
After twenty years with the Rajapaksa brothers in power most of the time, Sri Lanka today is bankrupt. There is no money left to import food, fuel, or medicines. The economy has ground to a halt, and even domestic food production has crashed.
At the time of writing the middle brother, Gotabaya Rajapaksa, is still president, but huge mobs occupied the presidential palace on Saturday. He has reportedly taken refuge on a naval vessel, and promises to resign on Wednesday.
Not everybody is convinced that ‘Gota’ will keep his word, but even if he does quit he leaves the country in ruins. Corruption played a big part in the disaster, but the real causes were arrogance and ignorance.
Five years ago, Sri Lanka was the most prosperous country in South Asia: twice the per capita GDP of India, only one-fifth of India’s infant mortality rate – and clean streets. Then, in 2019, Gotabaya Rajapaksa won the presidential election.
He made made five of his brothers and nephews government ministers, but apart from Mahinda Rajapaksa (who had been president twice already), they collectively knew as much about running a country as the average traffic cop.
“Monetary policy under Rakapaksa and his band of jokers was completely irresponsible,” said economist and opposition member of parliament Harsha De Silva in April. “It was driven by stupidity and arrogant idiocy.”
How did these clowns get to run an entire country? Because there was a long civil war, and they got the credit for win ning it.
The war was about ethnicity and religion. Most of Sri Lanka’s people are Buddhist and speak Sinhala, but a 30% minority, concentrated in the north and east, speak Tamil and are mostly Hindu in religion (with significant Christian and Muslim minorities).
The Tamils did well under British colonial rule, when most Buddhist Sinhalese refused to collaborate with their new political masters, so there was revenge-taking after independence in 1948. Buddhist-dominated governments removed the official status of the Tamil language and imposed restrictions on higher education for Tamils.
There were even anti-Tamil pogroms, and in 1987 the Tamil minority started to fight back in a guerilla and terrorist war that sought an independent Tamil state.
Up to 100,000 people died in the war, which ended in 2009. Mahinda Rajapaksa, who was already president, emerged from the war as a national hero (for Sinhalese voters only). He stayed in power until 2015.
When the brothers (all now in their 70s) won power back on an even more extreme ethno-populist platform in the 2019 election, it was Gotabaya Rajapaksa who became president, but Basil actually ran the economy. Almost completely ignorant of financial matters, he ran it into the ground.
The Rajapaksa government ran up $61 billion in foreign debt, stole a bit of it, and wasted much of the rest on enormous white-elephant projects. It cut taxes and printed money to cover the shortfall. It even banned artificial fertilisers on the advice of Indian eco-evangelist Vandana Shiva, whereupon food production collapsed.
The bill came due a few months ago, and Sri Lanka defaulted. The Rajapaksas will probably flee abroad, and Sri Lanka will be able to borrow some money and start to rebuild. But it may be the end of the decade or longer before the population sees its old living standards again.
