The highest court in Sri Lanka has decided that 13 former leaders, including former president Gotabaya Rajapaksa and his brother Mahinda, were accountable for the greatest financial catastrophe the nation has ever experienced.
Credit: BBC
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The Sri Lankan Crisis
The economic crisis in Sri Lanka began in 2019 and is still present now. This economic crisis is the greatest the nation has faced since gaining independence in 1948. Due to it, there are now near-record levels of inflation, a lack of medical supplies, a near-depletion of foreign exchange reserves, and rising costs for necessities.
The 2019 Sri Lanka Easter bombings, the COVID-19 pandemic’s effects in Sri Lanka, tax cuts, money creation, a national policy to switch to organic or biological farming, and other compounding causes are all credited with starting the problem. The protests in Sri Lanka in 2022 were a result of the ensuing economic woes. An Indian line of credit worth $4 billion provided Sri Lanka with a lifeline. The expenditures of importing fuel and necessities were met by this significant credit infusion. As a result, Sri Lanka’s heavily indebted foreign exchange reserves saw a significant increase, coming to $2.69 billion.
The Blame on Mr Rajapaksa and his brothers
The decision stated that their “actions, omissions and conduct” were what started the crisis. As the nation’s foreign reserves were depleted and supplies of food, fuel, and medication ran out in 2022, inflation skyrocketed. Months of massive public demonstrations ignited by the situation led to Mr. Rajapaksa’s downfall.
After that, he left the nation, but he came back in September 2022 when his party-backed new administration began talks with the IMF over a bailout. The petitioners’ legal bills are the only punishment associated with Tuesday’s decision, but experts tell BBC Sinhala that it may pave the way for more cases. Transparency International Sri Lanka, a corruption watchdog, and other campaigners filed the lawsuit.
The majority of judges (4–1) agreed that the politicians’ mismanagement of the economy infringed Sri Lankans’ fundamental rights. Along with the Rajapaksa brothers, 11 other officials were also found guilty, including two former governors of the central bank and former finance minister Basil Rajapaksa.
Respondents cannot avoid accountability by simply asserting that the choices they made were guided by policy. Respondents had every opportunity to avert this disaster because they were well aware of it, according to a statement from Transparency International Sri Lanka.
Power outages lasted up to thirteen hours a day for Sri Lankans during the height of the conflict. The nation filed for bankruptcy last year, and it is still battling the crisis’s harshest consequences. It obtained an IMF bailout of $3 billion (£2.4 billion) and is bound by the deal to satisfy stringent goals. With regard to its foreign debt as of November 2023, the largest lender, China, accounted for 52% of the total amount owed.
Is the worst part over in the crisis?
Life in Colombo, Sri Lanka’s financial hub, appears quite regular at first glance. There is a flurry of activity in the stores, restaurants and public areas are crowded with both tourists and residents. It is difficult to believe that this nation was experiencing severe shortages only a year prior to running out of foreign exchange.
Without fuel, the roads were deserted and public transport was nonexistent. Sri Lanka was forced to return to measures from the epidemic era, like working from home and taking online lessons. However, power outages rendered even this impractical—some of which lasted for up to 13 hours per day.
The situation got worse as there was a shortage of food, medication, and other necessities. At least sixteen people, mostly the elderly, lost their lives as a result of having to wait in such long lines in the intense heat. But today, only a year later, public transport is operational again, food, gasoline, and medication are once again available, and offices, companies, and schools are open. Restaurants are busy, especially the upscale ones.
Tourism, the nation’s primary source of foreign exchange, is likewise seeing a renaissance. Revenue for the sector increased by 30% over the prior year. Even with these encouraging reports, Sri Lanka’s economy remains fragile. More than $80 billion (£61.1 billion) in debt, both foreign and local, still burdens the nation. The nation experienced its first-ever default on its foreign debt last year during the height of the crisis.
