Gota' make changes

Sri Lanka’s hopes of surviving the ongoing crisis depend on sweeping political and economic reforms, and an intervention by the IMF

- LAKSHMI SUBRAMANIAN

On March 31, massive protests broke out in Colombo, with people laying siege to President Gotabaya Rajapaksa’s private house in the capital’s Mirihana district. The Jubilee Post junction, which was beautified and renovated to ensure a smooth commute for the president between his home and office, turned into the main protest spot. The next day, the government declared a public emergency. It, however, failed to deter people from intensifying their protests.

As the economic situation continues to deteriorate, cracks have emerged in the ruling coalition. Gotabaya dropped his brother Basil, who was the finance minister, from the cabinet. Basil was spearheading the government’s attempts to borrow from countries such as India and China, and also from international lending institutions. Ali Sabry, who replaced Basil, quit within two hours of taking oath as minister.

Sri Lanka, which was all set to go to the International Monetary Fund (IMF) for getting its debts restructured, is now caught in a disastrous tailspin. “Our foreign reserves were plundered and we no longer have money for imports. This is caused by the adamant behavior of the government, including the Central Bank governor. The crisis is happening only because of our wrong choices and poor policy-making,” said Umesh Moramudali, an economist at the University of Colombo.

After the resignation of all 26 cabinet ministers except Prime Minister Mahinda Rajapaksa, the Central Bank governor Ajith Nivard Cabraal, considered close to the Rajapaksas, too, stepped down. The quick resignations of key financial policy-makers and the continuing political turmoil seem to have further complicated Sri Lanka’s negotiations with international financial institutions.