This article was originally published here by the International Crisis Group
Sri Lanka has been through a tumultuous ten days. What exactly has happened?
In a stunning display of “people power”, massive crowds overcame large deployments of police and soldiers and other obstacles to storm the official residence and offices of the Sri Lankan President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe in Colombo on 9 July, leading the former to flee the country and both to agree to resign. Gotabaya’s eventual resignation on 14 July constitutes a major victory for Sri Lanka’s unprecedented island-wide protest movement. But these events leave an economy in freefall and a dysfunctional political system where the Rajapaksa family retains considerable influence. More political turbulence is to be expected.
For more than four months, citizens had been mounting constant, and almost entirely peaceful, protests demanding that Rajapaksa and his inner circle, who have dominated Sri Lankan politics for decades, step down for mismanagement of the economy and alleged corruption. In April and May, they succeeded in compelling Gotabaya’s nephew and three brothers – including Mahinda Rajapaksa, who was then prime minister, and Basil Rajapaksa, then finance minister – to leave their official positions. On 9 July, hundreds of thousands of people came together from all over Sri Lanka – walking long distances, commandeering trains and receiving free trips by bus – for what organisers had promised would be the “final push”. Gotabaya and Basil reportedly fled the presidential secretariat just minutes before the crowds entered.
The takeover of the presidential residence and office produced astonishing scenes, widely circulated on social media and global television, of huge, festive crowds of average Sri Lankans exploring luxurious spaces that until recently had been out of reach. Their playful, at times mocking, behaviour was generally tempered by respect for the properties as belonging to the people themselves.
Still, the culminating phase of the uprising saw increasing tensions between protesters and security forces and some violence. In the final hours of 9 July, someone set Wickremesinghe’s private residence on fire, largely destroying it. Police held protesters responsible, but conflicting reports from the scene make it hard to determine the fire’s source. The arson attack came soon after police officers were filmed brutally beating journalists covering protests near the prime minister’s house.
The demonstrators had been directing their anger at Wickremesinghe for some time. He had accepted the prime minister’s post on 11 May, when all others had turned it down following Mahinda’s resignation, a move widely seen as extending a lifeline to Gotabaya. Criticised for short-circuiting popular demands for Gotabaya’s removal and deep constitutional change, the new prime minister’s failed to deliver on his promise of political stability and efficient economic administration.
Following the takeover of his office and residence, Gotabaya’s grip on power became increasingly tenuous, but it remained unclear how the situation would resolve itself. On the evening of 9 July, Mahinda Yapa Abeywardena, speaker of parliament and a Rajapaksa ally, announced that the president had agreed to resign in four days’ time, citing the need for a short transitional period. Meanwhile, Gotabaya’s whereabouts were shrouded in secrecy. Some local observers suggest that he and other family members found refuge at various military bases while they planned an exit from the country. They sought to leave by plane on 12 July but decided not to do so when immigration officers refused to allow Gotabaya, Basil and family members to use a private VIP entrance at Colombo’s main airport. Gotabaya and his wife ultimately flew out on a Sri Lankan air force jet early on 13 July, alighting briefly in Maldives (where their arrival brought protesters into the streets) before proceeding to Singapore the next day. From Singapore, Gotabaya sent his letter of resignation to the speaker of parliament at last.
The ultimate destination for Gotabaya and his entourage continues to be up in the air. The U.S., India and the United Arab Emirates all reportedly rejected Gotabaya’s travel requests. It is unclear where he will eventually settle, though he appears to be looking for a safe haven where he feels secure that he will not be extradited or prosecuted now that he has lost the protection that comes with being a head of state. Former president and prime minister Mahinda Rajapaksa, his son Namal and his brother Basil remain in Sri Lanka. On 15 July, the Supreme Court barred Mahinda and Basil from leaving the country while it hears a civil suit against them.
Gotabaya’s departure left behind a messy political situation with unresolved questions about the succession process. At first, these were exacerbated by the fact that he fled the country without either himself or Wickremesinghe having tendered their formal resignations. Tensions rose sharply when, on 13 July, the speaker of parliament – who had become Gotabaya’s de facto spokesperson – announced that Rajapaksa had designated Wickremesinghe to be acting president during his absence from Sri Lanka. Protesters and opposition parties decried the move as illegitimately exploiting a constitutional loophole.
Even before the formal appointment letter was issued, Wickremesinghe took a hard line. He declared a state of emergency and a curfew. He also proclaimed his intention to “eliminate the fascist threat” posed by the protesters, and later said the military should do “whatever is necessary to restore order” following the occupation of the prime minister’s office. With the security situation increasingly fraught, and clashes between security forces and protesters outside parliament, there were credible reports indicatingthat the government had authorised the military to use live ammunition to quell protests. Although the military – which to date has been remarkably restrained – appeared reluctant to cross that line, Sri Lanka seemed to be on the brink of a dramatic escalation in violence.
Fortunately, with Gotabaya’s resignation on 14 July, the danger of an extended leadership crisis was removed. Protesters ended their occupations of government buildings, and crowds across Sri Lanka celebrated the success of the aragalaya, or people’s struggle. On 15 July, Wickremesinghe was sworn in as acting president, a position he can hold only until parliament votes on a replacement. That vote must happen within 30 days; it is now scheduled for 20 July.
Parliament remains dominated by members of the Rajapaksa-controlled Sri Lanka Podujana Peramuna (SLPP) party, and Wickremesinghe, widely viewed as protecting the Rajapaksas’ interests, will contest with SLPP support. Should he win, it remains questionable whether any new government he forms will have the credibility with the public and protest movement to restore calm in a lasting way.
What has driven such a sustained protest movement and such large crowds to take direct action?
The protest movement is most directly a response to what Wickremesinghe has called an economic “collapse”, rooted in unprecedented tax cuts, a sudden ban on chemical fertiliser that devastated crop yields and widespread corruption, all further aggravated by the loss of tourism due to COVID-19 as well as rising fuel prices resulting from the invasion of Ukraine. With foreign currency reserves nearing zero in mid-April, the government announced it was suspending repayment of foreign debt totalling more than $50 billion. Since this default, Sri Lanka’s first ever, the economy has ground to a virtual halt. Lack of hard currency has led to severe shortages of petrol, cooking gas and other essential supplies; lines of cars, motorcycles and three-wheeled taxis waiting two or three days for fuel have become routine features of life across the island. Inflation is running at more than 50 per cent, with high food prices forcing 70 per cent of Sri Lankan households to reduce food intake and nearly half the country’s children requiring emergency assistance. Medicines and medical supplies are running out, and patients are now dying of easily treatable causes. With imported fertiliser in short supply, the next harvest of rice and other vegetables, as well as the major currency earner tea, is expected to be down by as much as half. The UN and Red Cross have both launched urgent appeals to fund food and other humanitarian assistance, with UNICEF warning of a “full-blown humanitarian emergency”.
The economic and humanitarian situations are certain to get worse before they get better. The country is, in effect, bankrupt, and key economic activities needed to generate hard currency, such tourism, tea production and foreign remittances, are virtually absent or much reduced. Since inviting the International Monetary Fund (IMF) to assist, the government has held multiple rounds of negotiations for an Extended Funds Facility. The most recent talks in Colombo in late June saw the IMF announce “significant progress” but failed to reach a so-called staff-level agreement.
July’s political turmoil will likely add further delay. Even if the IMF persuades a new government to make the reforms needed to win the requested $3 billion bailout, it will disburse no funds until it deems Sri Lanka’s external debt to be “sustainable”. For that to happen, Sri Lanka must reach a deal to restructure the debt held by international creditors, who will have to accept a lesser payout on bonds, lower interest rates or extended terms of repayment. The earliest likely date for the IMF to release funds would be early 2023. In the meantime, Sri Lanka is urgently seeking “bridge financing” to allow it to pay for the fuel and other essential supplies needed to get the economy running again and avoid a humanitarian catastrophe. In June, Wickremesinghe floated the idea of a donor conference that would see India, China and Japan, as well as other countries, pledge support. It will take a massive infusion of humanitarian support to prevent the kind of mass desperation that would threaten much worse political instability and violence.
What steps are needed to establish a new government and restore the political order needed to address the economic crisis?
The forced departure and resignation of Gotabaya Rajapaksa could augur a political sea change for Sri Lanka, but with Rajapaksa loyalists still appearing to control parliament and with Rajapaksa ally Wickremesinghe having a good chance of being chosen to serve out Gotabaya’s term, it is unclear how deep the change will be. Disappointed hopes for change, amid extreme economic hardship, could yet produce further instability. The coming days and weeks will test the ability of Sri Lanka’s political class to act in the collective, rather than party or personal, interest, by adopting political reforms essential to meeting popular aspirations.
The swearing-in of Wickremesinghe on 15 July as acting president begins the constitutionally mandated process of selecting Gotabaya’s successor. Parliament has 30 days to choose, from its own ranks, someone to assume the presidency for the remainder of the current president’s term, which in this case runs until November 2024, unless there is an agreement to hold fresh elections sooner. That president will then need to appoint a prime minister and cabinet that has parliament’s confidence. The current parliament is widely detested, but there is no constitutional way around the fact that it is the current 225 parliamentarians who will determine the country’s next group of leaders.
Wickremesinghe is currently the front runner for the presidency. The SLPP has suffered defections since March, but appears to still have a parliamentary majority, and on 15 July the party’s secretary-general announced that it was backing Wickremesinghe.Scarred by arson attacks on government politicians’ houses on 9-10 May, feeling vulnerable without the Rajapaksas in power and knowing they are deeply unpopular, many SLPP members see Wickremesinghe, who has proven his loyalty to the family, as their best protection. Running against Wickremesinghe are SLPP defector and former Rajapaksa loyalist Dullas Alahapperuma, Sajith Premadasa, leader of the main opposition party Samagi Jana Balawegaya, and Anura Kumara Dassanayake, leader of the leftist Janatha Vimukthi Peramuna. With an absolute majority required to win, a first-round victor is unlikely, and, Alahapperuma is believed best placed to pick up additional support in the later rounds of voting that most expect to see. The fact that the vote will, unusually, be by secret ballot, adds an additional element of unpredictability.
As in May, when his appointment as prime minister was welcomed by some – including Western governments – as a possible source of stability, Wickremesinghe might appear to some to offer a similar chance for a new start if he were to become president. Yet his presidency would also bring major risks: the quintessential career politician, with cases of alleged corruption by close associates during his 2015-2019 premiership receiving wide publicity, and his close association with the Rajapaksa family now well established, Wickremesinghe is hardly an obvious vehicle for the kind of change protesters, and much of the population, demand. His assuming the presidency threatens to tarnish for many the sense of victory felt with Gotabaya’s resignation and could raise doubts about whether the needed change is possible within the current political system.
To reduce the risk of renewed instability, a Wickremesinghe government – or indeed any new government – must address the political factors behind the economic collapse and respond to popular demands for meaningful reform. Three steps in particular would go a long way to proving the new government has listened to the people and is serious about change.
First, the new government should agree from the beginning that it is serving on an interim basis and commit itself to fresh elections before the end of 2022, as many in the opposition and in the protest movement have been calling for. Fresh, and relatively quick, polls appear essential to restoring the legitimacy of the presidency, parliament and political order as a whole. The risk is considerable that a new president and prime minister will not agree to new elections, instead trying to stay in power through the duration of current terms – though this may be tempered by the knowledge that any government that hopes to rule for very long will have to take responsibility for extremely difficult and likely unpopular economic reforms.
Secondly, to address popular demands for change, the next government should also commit to amending the constitution to abolish the executive presidency, which since 1978 has concentrated an extraordinary amount of power in the president, weakening all other institutions of government and doing enormous damage to Sri Lankan democracy and the country’s well-being. The 20th amendment, pushed through by Gotabaya and the SLPP in October 2020, further turbo-charged presidential powers. According to a Supreme Court judgment in June, any amendment that returns executive power to the prime minister and cabinet will need approval at a referendum. Such a referendum could be held on the same date as a general election, ideally by the end of 2022. In a statement on becoming interim president, Wickremesinghe promised to return to the 19th amendment, which had reduced but not eliminated the president’s executive powers before it was repealed by the 20th amendment’s passage.
Thirdly, the incoming government should prove it is serious about criminal investigations into alleged corruption by previous regimes. It should re-establish the kinds of specialised police investigative units that were active from 2015 to 2019, give full support to an independent anti-bribery commission, cooperate fully with parliamentary oversight committees, support legislation to establish an independent Public Prosecutor’s office in the Attorney General’s Department, and renew previous cooperation with the UN and World Bank’s Stolen Assets Recovery program investigating major cases of corruption.
The sooner a broadly acceptable government is established to replace the Rajapaksa administration, the greater chance there is that it can begin to take up the herculean task of finding solutions to the country’s urgent economic and humanitarian needs. This will require finalisation of an economic reform package that the IMF can accept, which in turn will strengthen negotiations with Sri Lanka’s multiple international creditors, whose agreement to accept losses on their investments is essential to Sri Lanka’s debt being declared “sustainable”. The more consensus can be reached in parliament on the necessary policy reforms, the more credible they will be internationally. The IMF, in turn, must be careful not to press for austerity measures that will too deeply undercut popular acceptance and fuel further political unrest. Prior to finalising an IMF bailout, the government will face the enormous challenge of working with donors to find billions in short-term financing to pay for the fuel needed to get the economy running again and will need to devise a plan for feeding its population as the agricultural economy collapses and harvests shrink.
What can Sri Lanka’s international partners do to help manage the crisis?
Once a new president is selected by parliament and a new government is established, international donors should be generous with short-term humanitarian and food aid but more demanding with regard to the governance reforms that would need to accompany a long-term bailout. On humanitarian relief, donors interested in preventing Sri Lanka from collapsing further should make available funding well beyond the modest amounts in both the UN humanitarian and Red Cross emergency appeals.
At the same time, influential states should directly, and through the IMF, urge the new government to put in motion the process described above to amend the constitution to abolish the executive presidency and establish the independent oversight institutions that are needed to prevent large-scale corruption and gross economic mismanagement. Sri Lanka’s crisis is to a significant degree the result of a political system without meaningful checks on, or accountability for, economic decision-making. The window of opportunity to escape the executive presidency’s dead ends and re-establish a fully parliamentary system should not be lost. The country’s foreign partners should also encourage the IMF to insist on meaningful anti-corruption policies and strengthened rule-of-law institutions as part of its conditions for approving a bailout.
The emergence of a broad popular movement demanding deep political reforms, an end to corruption, and accountability for theft and other alleged crimes by the Rajapaksas and other politicians has created an opening for Western governments and the UN Human Rights Council to reframe their longstanding calls for “accountability” in ways that are more clearly in sync with public opinion, especially among the Sinhala majority. Framed in its broadest sense, the principle of accountability can connect widespread demands – from all of Sri Lanka’s communities – for accountability for economic mismanagement, theft and other abuses of power, with more difficult aspects of the Human Rights Council’s agenda, including accountability for alleged crimes committed during the country’s 26-year civil war, an idea that remains controversial among Sinhalese and politically challenging for Sri Lankan governments.
Whatever government is in place when the Council meets next in September, a new resolution will be needed that reaffirms the ambitious reform scheme laid out in 2021 and extends the mandate, with proper funding, of the important Sri Lanka Accountability Project managed by the UN High Commissioner for Human Rights. Should a future Sri Lankan government emerge that is committed to tackling impunity, pursuing the recovery of stolen assets and supporting a restructured state with more inclusive governance, the UN and foreign governments should offer targeted forms of support. These can include technical support for domestic anti-corruption initiatives and assistance to relaunch the assets recovery effort begun by the coalition government of 2015-2019, under the auspices of the program run by the World Bank and UN. Support of this nature stands the best chance of domestic acceptance and could help the country begin to work its way out of the persistent political and economic crisis from which it has struggled to emerge.