By Udbhav Sharma
The declaration of financial emergency, the change of PM seat from Mahinda Rajapaksha to Ranil Wickramsinghe did little to satisfy the public. Gotabaya should have quit long back by taking the moral responsibility.
On 9th of July, images from Sri Lankan President’s House were going rounds on all the networking platforms. The world witnessed a historic seizure of power by the already troubled Sri Lankan public. This seizure was a hard-hitting response of the masses towards the wrongly managed economic policies of the government in power, it was a message to the world that perverted regimes can always be challenged and overthrown if the greatest stakeholder, the general public forms a chain strong enough. The saturation point of the hardships faced by people in the last three years and particularly in the preceding span of 6 months resulted in what we have been witnessing on the streets of Colombo. Things are now looking even more worrisome with the proclamation of indefinite emergency, reluctance of the military man Gotabaya to step down making the crowds on the roads of Colombo go haywire.
There are different theories as explanations for the economic crisis seen in Sri Lanka. Some point towards the debt diplomacy of China, few others curse the pandemic for reduced tourism revenue as a factor. Along with these two, there are significant structural policy flaws from the government side which has been the major reason of the present situation in Sri Lanka.
The Rajapaksha brothers returned back to power through the 2019 general election. The new government lead by Gotabaya Rajapaksha set out to fulfill its proposed promises like tax cuts, decision of organic farming. The idea of tax-free household, Decision of huge reduction in VAT tax and a significant reduction in cooperative tax lead to severe downfall in government revenue and an obvious budget deficit. To cover this, Central Bank began printing money after which the IMF warned about a possibility of economic explosion. Gotabaya further went on to ban fertilizers import which he believed would significantly lower imports and save foreign reserves. This backfired as the nation was not ready for the transition to organic farming thereby leading to shortages of food creating a problematic price rise. As a result, Sri Lanka had to now import basic food crops. Further, the recent Russian ‘special military operation’ in Ukraine disturbed imports of tea by Russia. Aggravating all this, the Easter bombings lead to a reduction in tourists and the pandemic further gave a severe crush to the tourism sector which is said to have accounted as high as 12% of the country GDP. Sri Lankan beaches are today completely empty in a season which usually is a peak time for hospitality sector. A fall in remittance, debt trap and Russia-Ukraine confrontation are some ancillary reasons for the same.
The declaration of financial emergency, the change of PM seat from Mahinda Rajapaksha to Ranil Wickramsinghe did little to satisfy the public. Gotabaya should have quit long back by taking the moral responsibility. Instead, he chose to deflect the blame on his ministers and did the most to irritate the masses. Even today, he is not in a mood to accept the very fact that his royal mansion was raided by angry mob and how he had to manage the great escape.
Governments policy blunders lead to people waiting for hours to get cooking gas cylinders get refilled, huge power cuts, schools and other institutions getting closed to save Oil and electricity, unprecedented inflation leading to almost everything getting costly. The series of events above mentioned made the plot of Public coup and the seizure of Presidential Palace, the PM’s house ‘Temple Tress’ getting occupied by angry protestors and the large scale demonstrations across the country. This angry mob diving in the President’s Pool has clearly stated that the Palace won’t be emptied until both the PM and the President resigns from office. What is worth understanding is not just this attractive seizure but what the way ahead is for the pearl of Indian Ocean whose shine has got diminished in the last few months.
It is worth understanding that the Seizure of Presidential Palace and the viral images might look attractive but does little to improve the economic crisis. It has more of a symbolic role to warn the coming regime to be indebted to public interest failing which can result into similar or possibly even bigger revolution. A mere regime change would just mollify the masses for the time being. What is indeed needed is a proper shift of power within constitutional bounds, without the public coup turning out into a military coup and through a well structured mechanism. Given that the country is already lacking resources monetarily and also otherwise, fresh elections are not a prudent step. Possibly, the Speaker can takeover rather than giving seat, though constitutionally, to a person whom the public finds not less guilty of the present hardships. He should ensure that the parliament chooses new occupants at the earliest so that a constitutionally legitimized government can go on to IMF, the western powers and other allies for a bailout package and do all other steps to bring the Lankan Lion back to normalcy. Such a transition will instill public trust and confidence, something which looks the most shattered at present. If the occupancy of two prominent seats of power remains vacant for long, this would lead to power vacuum leading to a possible civil unrest in the country. The tourism sector cannot boost until a fixed and powerful regime is established and inflation is brought down. A revised tourism policy can be formulated keeping in view the significance of tourism sector in lowering the budget deficit. Once the foreign debt percentage falls from the present 119% of GDP, essential goods supply chain is normalized, reformulated and decisive monetary and fiscal policies are installed, the country can move on for a fresh election. The nation needs to prioritize the present situation leaving aside old confrontations on racial and religious lines. To curb unemployment rates and for strategic purposes, it should also focus to diversify its investment projects by shifting from the Dragon to other nations in Europe and South East Asia. The opposition parties have to set aside ideological and ethnic differences and together try to build the Lankan republic from scratch. The political elite of Sri Lanka should keep their self interests aside and those guilty in the eyes of the public should step down soon. They need to understand that unless the angry crowds on streets don’t go back to their home, leave the fancy presidential palace; no reformation process can take place. Afterall, crowds cannot negotiate with the IMF. Sri Lankan public is just not ready to accept the Rajpaksha family and their supporters at the moment. With army keeping their guns down at some protest sites in support of the public should be a simple indication for the top office how far has the Sri Lankan public reached in capturing state institutions.
All in all, the small island nation in the Indian Ocean needs to back itself; the political leadership has to be smart enough in negotiating over the bailout package along with instilling the confidence in masses of a better Sri Lanka in the times to come. It needs to understand from the model of Indonesia who was once stuck in a similar economic crisis but smart and swift economic model has ensured its entry into the powerful G-20 club today. The July 9 protests and the later developments on the streets of Colombo are a clear testimony to the potential of a collective mass mobilization. It is an alarming situation for similar economies that have been facing economic crisis as a result of miscalculated policies by their representatives in power.
The public coup thus need not be seen as the end of it rather has to be acknowledged with a hope of a fresh start towards a new era in the island’s history.
Udbhav Sharma is doing his Masters in Politics and International Relations at the School of International studies, Jawaharlal University, New Delhi.