How A Family Allegedly "Ruined" Sri Lanka's Economy | The Big Steal

Summary

In July 2022, Sri Lanka faced unprecedented political turmoil as tens of thousands protested against the government, leading to President Gotabaya Rajapaksa's resignation and flight from the country. The crisis stemmed from decades of mismanagement by the Rajapaksa family, who had been in power for 20 years, facing accusations of corruption and financial mismanagement. Sri Lanka's economy defaulted on debt payments for the first time, resulting in severe shortages of essential goods. The situation highlights the dire consequences of poor governance, potentially ushering in a new era in Sri Lankan politics.

Takeaways

• 🏛️ Tens of thousands protested in Sri Lanka, leading to the resignation and flight of President Gotabaya Rajapaksa amid severe political turmoil.
• 📉 Sri Lanka faced an unprecedented economic crisis, with soaring foreign debt exceeding $50 billion and a historic default on debt payments.
• 👨‍👦 The Rajapaksa family, in power for over 20 years, is blamed for financial mismanagement and corruption, yet has never faced convictions for alleged crimes.
• 🕊️ The end of the Sri Lankan Civil War in 2009, attributed to the Rajapaksa brothers, came at a significant human cost, with around 100,000 people reported dead, including many civilians.
• 💰 Mahinda Rajapaksa's government faced accusations of misappropriating funds, including diverting aid meant for tsunami recovery into personal accounts.
• ✈️ The Matala Rajapaksa International Airport, a major project of Mahinda Rajapaksa, became emblematic of wasteful spending, generating minimal income since its opening.
• 🔍 The Rajapaksa family is accused of extensive corruption, with allegations against family members including money laundering and embezzlement.
• 📊 Mismanagement of the economy intensified in 2019 with tax cuts leading to a budget deficit of 14% of GDP, forcing downgrades by international credit agencies.
• 🌍 The economic crisis prompted urgent appeals for foreign aid, including requests for donations in foreign currencies to support essential imports.
• 🚪 The current political upheaval may signify the decline of the Rajapaksa dynasty and the potential for a new political era in Sri Lanka as citizens demand change.

Q & A

What led to the protests in Sri Lanka?

The protests in Sri Lanka were triggered by overwhelming economic turmoil, with citizens unable to afford basic necessities like fuel, medicines, and food.

What actions did protesters take against President Gotabaya Rajapaksa?

Protesters stormed President Gotabaya Rajapaksa's official residence, with some swimming in his pool and napping in his bed.

How much foreign debt does Sri Lanka currently have?

Sri Lanka has accumulated over $50 billion in foreign debt and owes $78 million in interest alone.

What role has the Rajapaksa family played in Sri Lankan politics?

The Rajapaksa family has dominated Sri Lankan politics for two decades, holding significant power and facing numerous corruption allegations.

What major event occurred in 2005 related to the Rajapaksa brothers?

In 2005, Mahinda Rajapaksa was elected president, and his brothers took over key ministries controlling the national budget.

What was the significance of the Matala Rajapaksa International Airport?

The airport, opened in 2013, was intended as a major achievement for Mahinda Rajapaksa but became a symbol of financial mismanagement, as it earned only $120 in its first month.

What allegations have been made against Basil Rajapaksa?

Basil Rajapaksa has faced accusations of taking millions in commissions from government contracts and was charged with stealing $530,000 from a housing program.

How did the Rajapaksas respond to corruption allegations?

The Rajapaksas have denied all corruption allegations, claiming they are politically motivated and part of international conspiracies.

What fiscal policy did Sri Lanka implement in 2019, and what was its impact?

Sri Lanka announced sweeping tax cuts in 2019, which contributed to a significant budget deficit and led to a downgrade of the country's credit rating.

What is the current state of Sri Lanka's economy as of July 2022?

As of July 2022, Sri Lanka's economy is paralyzed, facing shortages of food, fuel, and electricity, with the government raising taxes and encouraging citizens to farm to alleviate the crisis.