Sri Lankan President Gotabaya Rajapaksa has fled his home as protesters surrounded and stormed his residence on Saturday, reported news agency, citing a defense source and local media. At least seven people, including two policemen, were injured as the protesters and police clashed, said the news agency.
Thousands of protesters clashed with the police and breached barricades to storm the president’s official residence in the capital city of Colombo. Two defense ministry sources told the news agency that President Gotabaya Rajapaksa was removed from the official premises on Friday for his safety ahead of the planned rally over the weekend.
Meanwhile, prime minister Ranil Wickremesinghe called an urgent meeting with his cabinet ministers after the president fled his residence. Demonstrators from across the country arrived in buses, trains and trucks to Colombo earlier on Saturday to express outrage over the government’s failure to protect them from economic ruin. Protesters shouted “Gota go home,” using a common shortened version of the president’s name.
According to the news agency, at least 21 people, including two police, were injured and hospitalized in the protests. Sri Lanka is going through one of the worst economic crises that the country has witnessed. Many blame the country’s decline on President Gotabaya Rajapaksa. Protests since March have demanded the president’s resignation.
The incidents came just a few hours after Sri Lankan police used force and tear gas to disperse protesters in the national capital. People had assembled to hold a protest march against the government amid the prolonged economic crisis.
And The Crisis unfolds…
The current economic crisis in Sri Lanka is a result of badly-timed tax sops, poor investments in projects, and Covid-induced restrictions.
1. In 2019, the Sri Lankan government announced several tax cuts, leading to a huge dip in revenue. This came at a time when the historically weak government finances were still looking for ways to pay off the sovereign bonds that Sri Lanka’s governments had been issuing for the past 13-14 years, without provisioning for repayment.
2. The international debts for Sri Lanka have mounted to unmanageable amounts. The nation now owes about USD 7 billion. Among its debts is a USD 1-billion international sovereign bond that matures in July. Sri Lanka’s public debt has risen (in projection) from 94 percent of its gross domestic product (GDP) in 2019 to 119 percent of the GDP in 2021, the International Monetary Fund (IMF) said in early March.
3. Sri Lanka’s foreign exchange reserve has fallen 70% since January 2020. This stalled its imports, leading to an acute shortage of several essential items. Its currency has undergone substantial devaluation.
4. The loan arrangements with China too contributed to the Sri Lankan economic crisis. Most of the loan it received from China in the past decade was invested in low-return projects, such as the construction of ports, airports, and coal power plants. The loan amounted to nearly USD 5 billion.
5. The final blow that led to the crisis in Sri Lanka was dealt by the Covid-19 pandemic. One of its major contributors, tourism, was severely hit during the pandemic. Taking the industry to abysmal lows. When the pandemic looked to subside and travel curbs were scrapped, tourist in-flows increased, with nearly 25% of visitors arriving from Ukraine and Russia till February. However, the impact of the Russia-Ukraine war trickled down and the tourist inflow from these countries stopped. Its traditional tourist sources, India, China, the UK, and Germany, have not recovered to pre-Covid levels.