Sri Lanka is going through its worst economic crisis since its independence in 1948. Daily power cuts, fuel shortage, gas, milk powder, medicine, other essential items and high inflation have resulted in even the upper-middle class feeling the pinch. To give you an idea of how bad the situation is, when Sri Lanka played the Bengaluru Test match a month ago, the exchange rate was 1 INR to 2.5 LKR. Right now, 1 INR will fetch 4.1 LKR!
Most Sri Lankans find their monthly earnings insufficient to keep the home fires burning. While those who can have tapped into their savings, sold jewellery or other valuables to make ends meet, others have hit the streets, organising protests in front of President Gotabaya Rajapaksa’s residence. The government tried to crush it by calling in the forces, imposing a curfew, introducing emergency laws and blocking social media. All these actions angered the public even more. Ignoring the curfew, people took to the streets, and the government was forced to backtrack. Protesters have camped for four days outside the Presidential Secretariat in Galle Face Green. World Cup-winning Sri Lanka captain Arjuna Ranatunga, a powerful minister from 2015 to 2019, having held petroleum, transport, ports and shipping portfolios, spoke to Rex Clementine in Colombo on the crisis and what it will take for Sri Lanka to come out of the mess.
How did Sri Lanka end up with the current economic crisis?
The government came to power with a massive mandate. They amended the constitution as they had a two-thirds majority. One of the changes they enforced was to allow dual citizens to enter Parliament, which is how the President’s younger brother became the Finance Minister. Then they consolidated the President’s power further. From that moment, they were arrogant and cocky. They didn’t listen to the experts’ opinions and did as they pleased. They were blind to the ground reality. They angered friendly countries like India, our strongest ally. They angered Japan, which had a deal for a light railway project. They should have gone to the IMF and rescheduled our loans. They blundered, and it was too late by the time they realised.
Is there any economic policy that paved the way for the current crisis?
The government reduced the Value Added Tax by a considerable amount to please a few businessmen who funded their election campaign. This resulted in the government losing massive revenues. Another key area where they faulted was holding on to the dollar without letting market forces decide its actual value. If you analyse, all around the region, the currencies have devalued. What happened here was when they were not devaluing the Rupee, Sri Lankans working overseas stopped sending foreign exchange through legal means and used various illegal means. In the black market, the dollar fetched a higher value than what the banks were giving. So Foreign Exchange was shrinking. That hit us hard. Another project that brought us foreign exchange was the Navy providing security for ships going through troubled seas like Somalia. This was given to a private company, and we lost out on that too. Then, the way they fought Covid was wrong. Instead of bringing in vaccines as soon as they were available, the government thought that the pandemic could be fought with local medication, which backfired. We could have saved many lives and opened up the country much earlier had we acted fast.
What did you make of the Prime Minister’s speech to the nation on Monday night?
I was disappointed. I wished he had given solutions to the problems. But instead, he became a laughing stock. Over the years, he has used the racist card well. He did the same in his speech. But people are not going to fall for it every time. You can fool them sometimes, but not all the time. It is ironic that at the same time when protests are going on here, Sri Lanka’s former High Commissioner to the United States, Jaliya Wickramasuriya, has pleaded guilty to embezzling money while purchasing a new embassy building in Washington. He is a close relative of the Prime Minister, and people aren’t going to keep quiet when they see these things.
What’s the solution to the current economic crisis?
There’s no problem that cannot be solved. The new governor of the Central Bank is someone who is well respected. There are some very good economic advisers as well. If you had got them on board earlier, this wouldn’t have gone out of hand. But the government wanted their friends to run the economy. You can’t do that. I only hope these experts are given a free hand. Let them run independently without politicians interfering.
The protesters want the President to 'go home'…
Well, constitutionally, he has to be impeached. There’s no other way. He was a popular choice. His presidential campaign was the best marketing campaign I have seen. You can come to power by talking about your racist policies, but you cannot stay in power by executing your racist policies. He had little political experience, yet people believed in him. But he has proved to be a big disappointment.
What are your thoughts on the protests?
These protests were started by the people and are not political movements. Not just the common people but the business community, clergy, artists and sportspersons -- have all turned up at these protests in unison. I urge all the youth to stay away from violence. They have done well so far. Keep it up going forward.
But you have not been at any protest site…
I wanted to go, but I thought I had done politics too after retiring from cricket. My involvement can be seen as a political one. I wanted to respect the protesters, so I kept away. I am impressed with the stance a young player like Wanindu Hasaranga (the Royal Challengers Bangalore all-rounder) has taken. I am also a bit disappointed with some of the greats of the game who have kept silent.
(Rex Clementine is a Colombo-based cricket writer)
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