A Ruling Family on the Run as Sri Lanka Plunges Into Economic Ruin
Lanka — As the guests sat down for a banquet dinner last summer at the grand colonial-era home of Sri Lanka’s president, the small talk soon turned gravely serious. Addressing members of the ruling coalition, the country’s energy minister, Udaya Gammanpila, defended a small increase in fuel prices that was intended to address a critical shortage of dollars the island nation needed to import fuel, medicine and other necessities. The president, Gotabaya Rajapaksa, and his brother Mahinda, the prime minister, had come on board with the measure after a year of discussion. But another member of the family — Basil, the finance minister, one of five Rajapaksas in the Cabinet — had other ideas. Before the guests made their way to the dance floor, Basil Rajapaksa rose to declare that Sri Lanka was not in fact suffering from a foreign currency crisis, according to Gammanpila and another person present. Criminals, he claimed, were funneling dollars out of the country’s banking system. Give him two weeks, he said, and he would fix it. He would not. Nearly a year later, Sri Lanka lies in economic ruin, with basic food items scarce, hospitals out of medicine and lines for fuel stretching for blocks as the country’s foreign reserves all but run out. The wave of anger gripping the country is as much about the family dynasty ruling Sri Lanka as it is about the economic disaster. Once empowered by a triumphant Buddhist Sinhalese nationalism after a brutal civil war, the Rajapaksas have been undone by what their own allies call incompetence and denial. Now, that dynasty, which has dominated the country for the greater part of two decades, is on the verge of an end, with most of the family in hiding at a military base and only the president clinging to power. The latest to go: Mahinda Rajapaksa, the patriarch and prime minister, who was evacuated from his home Tuesday after setting off clashes that left eight people dead across the country. Gammanpila said that the Rajapaksas — especially Basil, a shadowy power broker before becoming finance minister — should have seen the disaster coming.
“Basil was not willing to accept the fact that this financial crisis will lead to an economic crisis, and unless we are going to solve it, that will lead to a political crisis,” he said.
“He controlled everything,” Gammanpila added, a sentiment repeated by other officials and diplomats, “and he knew nothing.”
That Sri Lanka was headed toward an economic crash had become increasingly clear to analysts in recent years. They warned that the country’s balance of payments and macroeconomic trends were out of alignment. Over a period of decades, the small island nation of 22 million people had built a bloated state sector, robust social welfare programs that exceeded the country’s means, a large military and an elaborate series of postwar construction projects. As economic growth slowed, it kept borrowing to pay.
