Economic Crisis in Sri Lanka: Ministers Resign

Photo posted by @rasaimachang on Instagram

A rapid wave of resignations among high-ranking government officials has taken Sri Lanka by storm in the midst of the worst economic crisis faced by the nation in several decades. Protests have broken out across Sri Lanka as politicians and civilians alike are pushing back against the controversial measures taken by their elected leader, President Gotabaya Rajapaksa. Though a popular choice as a presidential candidate, his leadership style has been the center of controversy as the country struggles to navigate an economic and political crisis.

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Rajapaksa was elected to the presidency in 2019. Near the end of that year, he enacted a series of populist tax cuts that reduced corporate revenues across Sri Lanka. Around this time, the island nation was also experiencing higher incidence rates of domestic terrorism and acts of violence within its major cities.

The increasing crime rates contributed to a devastating decline in tourist activity within Sri Lanka, with some analysts claiming that the nation was experiencing nearly an 80% decrease in tourism arrivals by the end of 2019. This decline in tourist activity, coupled with the controversial tax cuts that negatively affected revenue rates for the tourism industry, was just the beginning of a rapid descent into an economic crisis for the nation. 

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Largely reliant on revenue from the tourism industry to maintain their economy, Sri Lanka was experiencing an economic decline as 2020 began. Only a few months later, the COVID-19 pandemic ravaged the global community, inciting fear that stemmed from its novelty and rapid transmission. In the interest of protecting the health of people around the world as the international community responded to the health crisis, international flights were canceled indefinitely and lockdowns went into effect across the globe. In turn, Sri Lanka experienced a standstill in their tourism arrivals, seeing exponential declines in their revenue rates that sent their economy into a tailspin.

Along with the tourism industry, the foreign import and export of material goods played a fundamental role in the maintenance of the Sri Lankan economy. As these supply and demand chains encountered dysfunction in tandem with the global health crisis and international lockdown, this facet of the economic system suffered immensely. Beyond the economic implications of this rapid decline in foreign imports, Sri Lankan civilians encountered difficulty in acquiring basic goods like food, fuel and medicine as these supplies dwindled.

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Over the past two years, widespread outrage regarding the governmental response to the economic crisis has contributed to a political revolution. The nation has defaulted on its foreign debts for the first time since their initial independence from Britain in 1948, civilians are experiencing unexpected and lengthy power outages, inflation rates are skyrocketing and access to basic necessities continues to be restricted.

As a result, widespread protesting has commenced across the island nation and government leaders are rapidly resigning, calling for the resignation and subsequent replacement of Gotabaya Rajapaksa. Though the future lies in uncertainty for the nation, Sri Lankan citizens are joining together to demand a change.

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