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FINANCIAL CHRONICLE™ » EXPERT CHRONICLE™ » Sri Lanka’s Rajapaksa Leadership Won’t Step Down

Sri Lanka’s Rajapaksa Leadership Won’t Step Down

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ChooBoy

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Sri Lanka’s Rajapaksa Leadership Won’t Step Down Sri-lanka-protests-GettyImages-1392268143
Sri Lanka announced last week that it would default on $51 billion of foreign debt, marking the first time in 20 years that a South Asian country has faced such an economic crisis. Sri Lankans now lack fuel for their cars, face regular power cuts, and are preparing for a looming food shortage. Although recent challenges—chief among them the COVID-19 pandemic—have compounded Sri Lanka’s economic plight, the default has been decades in the making.

The announcement follows weeks of nationwide protests against the Rajapaksa family, which has dominated Sri Lankan politics since 2005; its members include both incumbent President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa. Despite the mass unrest and historically low popularity ratings, the Rajapaksas have so far refused to leave office. With enough legislators to resist impeachment and the tacit support of the military, the current leadership is unlikely to step down on anyone else’s terms.

Sri Lanka has long pursued economic growth through debt financing, a strategy that was largely successful from the 1970s through the early 2000s. Despite three other defaults that were quickly restructured, the country’s economy grew at a robust average rate of 4.9 percent between 1973 and 2001. At the time, Sri Lanka’s debt was more open to restructuring. Its official status as a low-income country allowed it to access to favorable loans from the International Monetary Fund (IMF) and the World Bank, and little of its debt was held by private investors or other countries.

But as Sri Lanka’s economy grew, sweetheart loans from the IMF dried up; the country ultimately graduated to middle-income status in 2019. Colombo had to convince funding agencies and private investors that it was worthy of investment. Many investors still saw the potential for high, risk-adjusted returns. In addition to its economic growth, Sri Lanka had finally entered an era of peace after a three-decade civil war that ended with a decisive government victory in 2009. Despite allegations of human rights violations by the military in the war’s waning days, most observers expected political stability to follow.

Some investors were also interested in the geostrategic returns that came from engaging with Sri Lanka’s leadership. Beginning in the early 2000s, China increased its investment with a number of ventures, including a deep-sea port and an international airport near Hambantota, the Rajapaksas’ hometown. Although the port does not move much cargo, it could serve as an important connection point for China’s Belt and Road Initiative. In 2017, Beijing offered to buy control of the port, helping Colombo to address some of its balance of payment issues. (Contrary to popular belief, China did not forgive its loans to Sri Lanka in return.) The airport, on the other hand, has simply lost money.

Meanwhile, the Rajapaksa leadership pushed policies that have weakened Sri Lanka’s already precarious economic standing. Upon returning to power in 2019, the Rajapaksas announced plans to transition the country to organic farming in 10 years. Gotabaya Rajapaksa advocated a ban on synthetic fertilizers and pesticides, catching farmers unprepared and leading to record agricultural production declines. Despite inheriting the looming debt crisis, the Rajapaksa government also cut taxes while increasing spending, including subsidies for farmers. The pandemic made matters worse, decimating the vast tourism industry and weakening remittance flows as many Sri Lankans returned home from overseas jobs.

In response to the economic calamity, Sri Lanka’s diverse political and ethnic groups have united in opposition to the Rajapaksa government. Facing such daunting prospects, many political leaders would have stepped down by now. In fact, the rest of Sri Lanka’s cabinet resigned under public pressure on April 3, including several members of the Rajapaksa family. But Gotabaya and Mahinda Rajapaksa remain at the helm, seemingly with the support of the military and the police, which have kept protesters at bay.

The military is not likely to turn on the Rajapaksas for two reasons. First, Sri Lanka is not a garrison state. The army is powerful, but it respects civilian government—making Sri Lanka different from other countries in the region. Second, the Rajapaksas have deep connections with Sri Lanka’s military. When Mahinda Rajapaksa became president in 2005, he made Gotabaya Rajapaksa the secretary to the defense ministry. As the civil war wound down, the Rajapaksas overlooked alleged human rights violations and later stopped potential international investigations, earning significant loyalty from the military.

https://foreignpolicy.com/2022/04/20/sri-lanka-crisis-rajapaksa-protests-economy/

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dayandacool

Post Mon Apr 25, 2022 9:17 pm by dayandacool

A bastard will always be a Bastard!!!

Beyondsenses

Post Tue Apr 26, 2022 7:07 am by Beyondsenses

ලොක්කයි ගෝලයෝ 225 කුයි  හොඳට දුවපු බැංකුවක් බංකොලොත් කරනවා. කෝටි දෙකකට වැඩි ගිණුම් හිමියෝ බහුතරයක් ටික උන් අල්ලලා හිරේ දාලා තමන්ගේ සල්ලි ටික ගන්නේ නැතුව පරණ එවුන් ටිකම බැංකුව ගොඩගනී කියලා ඇස් කන් පියාගෙන ඉන්නවා......

වැඩි දවසක් යන්නේ නැහැ. අන්තිම පෙට්රොල් ලීටරෙත් ගැහුවට පස්සේ ,අන්තිම හාල් කිලෝවත් කාලා ඉවර වුනාට පස්සේ ගෝල්- ෆෙසේ අරගලයට නොගිය උන්ට යන්න වෙන්නේ හාමතේ පයින්ම.


https://lankanewsweb.net/archives/9719/sri-lankas-inflation-hit-119-hankes-inflation-dashboard/

Beyondsenses

Post Tue Apr 26, 2022 7:09 am by Beyondsenses

dayandacool wrote:A bastard will always be a Bastard!!!
දැල් සැපද???? සබන් ගෑවද ? දත් මැද්දද ? Rolling Eyes

The country went through immense hardship and unity was the pillar that got the island nation out of turmoil. I vouch for victory over defeat. #LKA

avatar

Post Tue Apr 26, 2022 1:58 pm by D.G.Dayaratne

An excellent article by an Indian writer and Prof

Rajapaksas did a lot things to the country before 2010 Main thing had been war victory

BUT AFTER WAR VICTORY THEY have COM PLETLY MIS MAMANAGED THE COUNTRY

Not necessary to explain further

Now is the Best Time to GO AND  PROTECT THEIR GOON NAME IN THE HISTORY FOR ERADICATION OF TERRORISM

reyaz likes this post

dayandacool

Post Tue Apr 26, 2022 9:43 pm by dayandacool

D.G.Dayaratne wrote:An excellent article by an Indian writer and Prof

Rajapaksas did a lot things to the country before 2010 Main thing had been war victory

BUT AFTER WAR VICTORY THEY have COM PLETLY MIS MAMANAGED THE COUNTRY

Not necessary to explain further

Now is the Best Time to GO AND  PROTECT THEIR GOON NAME IN THE HISTORY FOR ERADICATION OF TERRORISM

There is no more name to be protected or to be written in the History. It's crystal clear who commanded the war. These robbers will need to be hanged. and each passing day, their time is running out and these dogs will die a roadside death by the hands of innocent people very soon.

Who is Lasantha? and where's the Money stolen from Mig fighter jets? Now we all know right?

dayandacool wrote:
D.G.Dayaratne wrote:An excellent article by an Indian writer and Prof

Rajapaksas did a lot things to the country before 2010 Main thing had been war victory

BUT AFTER WAR VICTORY THEY have COM PLETLY MIS MAMANAGED THE COUNTRY

Not necessary to explain further

Now is the Best Time to GO AND  PROTECT THEIR GOON NAME IN THE HISTORY FOR ERADICATION OF TERRORISM

There is no more name to be protected or to be written in the History. It's crystal clear who commanded the war. These robbers will need to be hanged. and each passing day, their time is running out and these dogs will die a roadside death by the hands of innocent people very soon.

Who is Lasantha? and where's the Money stolen from Mig fighter jets? Now we all know right?
Foreign loan spent on Mattala Airport, Hambantota harbour, Lotus tower, Multi billion Dollur highways that connect Hambantota are now pouring revenue in Dollur.

But some people are not realizing this because they don't have patriotism  pig pig pig pig

Beyondsenses

Post Wed Apr 27, 2022 8:25 am by Beyondsenses

dayandacool wrote:
D.G.Dayaratne wrote:An excellent article by an Indian writer and Prof


There is no more name to be protected or to be written in the History. It's crystal clear who commanded the war. These robbers will need to be hanged. and each passing day, their time is running out and these dogs will die a roadside death by the hands of innocent people very soon.

Who is Lasantha? and where's the Money stolen from Mig fighter jets? Now we all know right?
දැල් සැපද???? සබන් ගෑවද ? දත් මැද්දද ? Sri Lanka’s Rajapaksa Leadership Won’t Step Down Icon_rolleyes

avatar

Post Wed Apr 27, 2022 12:43 pm by SamJay1974

We might be able to see a new government soon (a government without Rajapakses, but Gota will remainas the president). No idea about the new government's structure, but it will happen. Something is better than nothing. Please find out about this and keep everyone posted. Badly want to see some positive growth in the market, and Badly want to see a better future for our children and our motherland.

dayandacool

Post Mon May 02, 2022 2:29 pm by dayandacool

SamJay1974 wrote:We might be able to see a new government soon (a government without Rajapakses, but Gota will remainas the president). No idea about the new government's structure, but it will happen. Something is better than nothing. Please find out about this and keep everyone posted. Badly want to see some positive growth in the market, and Badly want to see a better future for our children and our motherland.

No. Not going to happen. Both the Rajapaksas will have to go and will go for sure. Because without both of them leaving power, there is no way an impartial inquiries be made to find where our money went. May be one by one, but both will have to go. People wont stop the struggle and without stopping the struggle and without having political stability, no money would come. and we all know where this is heading. If people starve to death, like I said Rajapaksas will be killed at the hands of the public. Rajapaksas are nothing compared to Gaddafis. If they step down with dignity, they might at least be alive. Either way, end is near for the Rajapaksa clan.

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