Apr 5, 2022 - World
Protests rage as Sri Lanka faces worst economic crisis in decades
Sri Lankan President Gotabaya Rajapaksa is scrambling to stabilize his government and curtail protests over the country’s economic crisis, which has led to power cuts and shortages of essential goods.
Driving the news: Rajapaksa has invited opposition parties into the Cabinet in an effort to form a unity government. His government also imposed a curfew and blocked social media sites in a largely unsuccessful attempt to quell the protests.
- The Cabinet resigned, except for Mahinda Rajapaksa, the president’s brother and one of his presidential predecessors. Governance in Sri Lanka has largely been a family affair since Gotabaya Rajapaksa took office in 2019.
- Among the 26 Cabinet members who resigned were three more Rajapaskas, including the finance minister (another brother, Basil).
Breaking it down: The government lacks sufficient foreign reserves to pay for fuel and other key imports.
- Per Reuters, longer-term causes include economic mismanagement across multiple administrations, a COVID-induced hit to tourism and remittances, and unaffordable tax cuts passed in 2019.
- Sri Lanka devalued its currency earlier this month before seeking a loan program from the IMF, sending inflation climbing.
- The government is now also seeking economic help from China and India.