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Sri Lankan PM Resigns as Gov’t Cracks Down on Protests over Economic Crisis & “Gross Mismanagement”

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Sri Lanka’s prime minister stepped down Monday following weeks of street protests over the country’s worst economic crisis in its history, which has seen skyrocketing food and fuel prices in the island nation. Prime Minister Mahinda Rajapaksa’s resignation came after supporters of the ruling party stormed a major protest site in the capital Colombo, attacking protesters and prompting clashes with police. President Gotabaya Rajapaksa, the outgoing prime minister’s brother, has declared a state of emergency and remains in power, despite protesters’ demands for the resignations of all members of the political dynasty that has dominated Sri Lanka’s politics for decades. “The gross mismanagement of our economy by this regime combined with the history of neoliberal policies is what has brought Sri Lanka to its knees,” says Ahilan Kadirgamar, a political economist and senior lecturer at the University of Jaffna in northern Sri Lanka.

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StoryJul 12, 2022How Sri Lanka Protests Led to a “Reawakening of the Citizen” & Pushed Out President & Prime Minister
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We begin today in the Indian Ocean nation of Sri Lanka, where the government has granted emergency powers to its military and police forces after protests erupted in the capitol Colombo as the country faces its worst economic crisis in its history. This comes after Sri Lanka’s prime minister was forced to resign, following large anti-government protests in recent weeks that have demanded the ouster of all members of the Rajapaksa family. The move clears the way for the formation of a new cabinet as Sri Lanka looks for ways to end the devastating economic crisis. Prime Minister Mahinda Rajapaksa is the brother of President Gotabaya Rajapaksa, who has faced charges of nepotism and corruption since he installed three siblings into high-level government posts. On Monday, supporters of his ruling party violently stormed a major peaceful protest site in the capital Colombo, attacking protesters and prompting clashes with police, who fired tear gas and water cannons. This is one of the opposition leaders.

SAJITH PREMADASA: [translated] Everyone who is involved in this government, including President Rajapaksa and Prime Minister Rajapaksa, must be held responsible for this inhumane attack. This was a planned attack. This was a thought-out project. This was an act of state terrorism and political terrorism. The Rajapaksas must be held responsible for this.

AMY GOODMAN: Meanwhile, thousands of protesters responded to the attack by defying curfew, setting fire to homes and businesses belonging to ruling party lawmakers. At least five people have been killed, hundreds injured. This is an anti-government protester speaking outside the prime minister’s residence in Colombo.

PROTESTER: Almost about 20,000 came with, you know, sticks, heavy sticks, and they beat all of us. They demolished our place. We were having this place. Can you see? These were the tents that we were having. They came. They took off our buffers, everything. They hammered three of my colleagues. And these are university young graduates who are fighting for their rights — no education, no food, economy at a standstill — because we want the Rajapaksas to go.

AMY GOODMAN: For more, we go to Jaffna, Sri Lanka, to speak with Ahilan Kadirgamar, the political economist and senior lecturer at University of Jaffna.

Welcome back to Democracy Now! Can you just lay out for us what is happening in your country, how come the prime minister resigned, the hundreds of people injured, at least five dead?


Sri Lanka is going through perhaps the worst economic crisis since the 1930s. There are shortages of essential items. Gas and diesel prices have doubled, and there are huge lines because of shortages. The price of bread has doubled. The price of rice has doubled. And shortages of medicine. So, all of this — and the people are asking: What is the reason for this? And people are putting the blame squarely on the Rajapaksa regime, that came to power in late 2019.

Now, this economic crisis, of course it’s been aggravated by the war in Ukraine, with global commodity prices going up; the pandemic, which disrupted the tourism sector in Sri Lanka. But it also goes much longer back to liberalization in Sri Lanka, because until the 1970s Sri Lanka was considered a model development state globally, along with Cuba and the Indian state of Kerala, because even though we had very low per capita incomes, we had very high human development indicators, mainly thanks to free education and free healthcare policies, that continue to today. Even in my university for my students, university students — all universities are state universities — education continues to be free.

But the gross mismanagement of our economy by this regime combined with the history of neoliberal policies is what has kind of brought Sri Lanka to its knees. And the people are asking very serious questions about particularly this regime and how they’ve handled this economic crisis since they came to power. Mahinda Rajapaksa was prime minister and just resigned. He was president for 10 years, from 2005 to 2015. And because of a two-term limit that was brought about, his brother then contested in 2019. And when they came back to power, they focused only on consolidating their power. In fact, despite the pandemic, Sri Lanka did the least amount of relief, even compared to other South Asian countries. People got very little relief during the pandemic. They’ve suffered quite a bit. And all along, they tried to consolidate their power. In fact, after the parliamentary elections in 2020, they brought about an amendment to the Constitution to put — to heap huge amounts of power in the president. We have both a parliamentary system and a presidential system in Sri Lanka, and the president has huge amounts of power. So, now, even though the prime minister has resigned after weeks of protests, now there’s militant protests calling for the resignation of the president. And that’s where Sri Lanka is at the moment.

JUAN GONZÁLEZ: And could you tell us: How has the family been able to consolidate power so completely in terms of so many siblings of the president being in office? Was there not a reaction by the rest of the elected officials in the government about this, or the public at large?

AHILAN KADIRGAMAR: This has been a long project, from 2005 — you know, Sri Lanka went through a three decade-long civil war. In 2005, years before the end of the civil war, Mahinda Rajapaksa came to power as president. And he was credited with crushing the Tamil Tigers. And that left a legacy. And then he won the next term in office, where then he became even more arrogant in bringing more of his family into politics. There was a reaction. After the war, mounting trade union struggles and so on led eventually to regime change in 2015, and they were thrown out of power.

But the new government that came to power really did little to address the economic issues. There was a drought for two years. So they started to lose credibility. And in 2019, you might remember, 2019, Easter Day, there were terror attacks in Sri Lanka. And questions remain as to who was behind it, but it’s claimed to be ISIS-inspired attacks. And that terror attacks brought the Rajapaksas to power in late 2019. Along with that, they have used a sort of virulent nationalism, a Sinhala Buddhist nationalism, to mobilize the majority of the population against the minorities. Over the last decade, there have been huge amounts of attacks against the Muslim community, in particular, mobilizing Islamophobic forces. All of this has led to them being able to consolidate power.

But with this economic crisis, I think the majority population has also finally come to understand that this regime has really looted the country. And so, at the heart of it is an economic crisis that has now turned into a very serious political crisis, as well.

JUAN GONZÁLEZ: And as in many countries in the developing world, the international agencies can often play a big role in shaping government policies. Could you talk about the role of the World Bank and the IMF in terms of Sri Lanka’s economic policies?

AHILAN KADIRGAMAR: Yeah, definitely, the — if we look at 1970s, until then we had a left-leaning government. And with the long economic downturn in the 1970s, we went into — a right-wing government emerged. A very pro-U.S. government emerged in 1977 under the leadership of J.R. Jayewardene, and Sri Lanka went through structural adjustment policies with the support of the World Bank and IMF. And we decided to liberalize trade, liberalize our financial system. And that, over the last four decades, has led to huge amount of — much higher levels of inequality in the country. And that’s been continued.

But over the last 12 years after the war, in particular, with the support of the IMF — we’ve gone through 16 IMF agreements in Sri Lanka. With the support of the IMF, we’ve been borrowing considerable amounts in the international capital markets, what are called sovereign bonds, at very high interest rates, on the order of — annual interest rates on the order of 7.5%, which means when these bonds are repaid in 10-year time frame, the interest cost is equaling to the principal. So, if you borrowed $500 million U.S., by the time you repay it, it’s $1 billion U.S. But this came with the support of these international agencies. So, in my view, they are part of the problem.

And now the solution to the current economic crisis is also considered to be going back to the IMF for an agreement. The government has come in line with that, even the opposition. Even if there’s a change of government, their main way forward, they think going to the IMF is a magic bullet. In my view, you know, the IMF creditors, like India, might be able to aid us through to address these shortages of supplies due to the real fall in foreign reserves. But in the long run, we have to be very careful, because the IMF conditionalities that are likely to be placed — it’s already there in many of the IMF reports — are calling for austerity, further cuts to social welfare, market pricing utilities. Now, if you take a country like Sri Lanka, it’s a model because 99% of our people have electricity. And that electricity is given at very low costs. Rural households can afford electricity at almost less than $2 U.S. per month. But all that is going to be market price now, so there are huge questions as to the future of our social welfare if we go through such austerity policies, as well.

AMY GOODMAN: Ahilan, before we end, if you can talk about, is this the end of the Rajapaksa dynasty? I mean, you have Mahinda Rajapaksa resigning, but his brother, who’s the president, Gotabaya Rajapaksa, remaining. Explain who they are, how they’ve retained power for so long, and if you see the whole family dynasty collapsing?

AHILAN KADIRGAMAR: The whole family and the regime has been completely delegitimized, so it’s going to be very hard for them. There’s probably no political future for them, though we can’t say for sure. As you are talking in your show about the history of Marcos in Philippines, you know, maybe their kids down the line, they may try to make a comeback. But I think for the next couple decades they are done. But they are also possibly going to face prosecution for all these corruption allegations and so on, not to mention the various sort of human rights violations that have been part and parcel of their rule.

So, the president, who holds immense amount of powers, is unlikely to resign. They are probably going to try to prolong this as much, as long as they can. But even as they prolong if the president stays in power, it’s going to bring about almost a state of anarchy in the country. The economic crisis continues to deepen. All trade unions are on a continuous strike. We are seeing protests unseen in this country from close to 70 years. So, it’s a major moment.

But I think Rajapaksa will have to go. Their family politics is done for. But the real question is: What kind of alternative is going to emerge? The liberals really don’t have an alternative to this economic crisis. We really have to focus on our food system. We are looking at starvation and even possibly famine type of conditions going forward. So, how all of this is going to play out and whether we can rebuild our food system, focus on local production, and think about self-sufficiency and really to try to reduce inequality in this country, which would mean implementing something like a wealth tax, as opposed to the recommendations of the IMF, which is to try to return to the same path of inequality and trade liberalization and financialization, which has actually led to this crisis. And so, Rajapaksa has to go out, but who is going to take the reins and sort of set Sri Lanka in a different direction is the main question before us.

AMY GOODMAN: Well, we will continue to follow this. Ahilan Kadirgamar, we want to thank you for being with us, political economist, senior lecturer at the University of Jaffna in Sri Lanka, where hundreds of protesters have been injured, at least five are dead.

Next up, the Pulitzer Prizes have been announced. Among those who won was acclaimed journalist Maria Hinojosa and staff for the podcast Suave, about a man sentenced to life in prison as a juvenile and how she chronicled his story all the way to unexpected freedom. Stay with us.

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