The Asian nation has been brought to the brink of bankruptcy
Sri Lankan Prime Minister Mahinda Rajapaska resigned on Monday after months of violent protests. The country has defaulted on its foreign debt and rationed fuel amid skyrocketing inflation that has plunged many of its citizens into poverty.
The prime minister handed in his resignation to President Gotabaya Rajapaksa, his younger brother, according to multiple media reports. The resignation dissolved Rajapaska’s cabinet, which was formed last month after the resignation of all members of the previous cabinet.
Sri Lanka has been rocked by more than two months of continuous protests, and these unrest continued on Monday. Shortly before Rajapaska resigned, pro- and anti-government protesters clashed outside government buildings in the capital, Colombo, with police using tear gas and water cannons to break up the riot.
Hundreds of armed soldiers were deployed in Colombo to quell the unrest and a curfew was imposed. However, that curfew was widely ignored and at least 76 people were injured in clashes on Monday, the Times of India reported. According to another AFP report, a lawmaker from Rajapaska’s party was found dead on the outskirts of Colombo after he allegedly opened fire on protesters blocking his car.
Sri Lanka has experienced food, fuel and medicine shortages in recent months as inflation soared to almost 30% in April. Fuel rationing was introduced last month and there were long queues to buy staples such as rice, powdered milk and medical supplies.
Rajapaska’s government announced in April that it would stop payments on its foreign debt, and Central Bank Governor Nandalal Weerasinghe explained that the country had to use its dwindling reserves to import food and fuel. Sri Lanka was due to pay off some $7 billion of its foreign debt this year, but Finance Minister Ali Sabry announced last week that the country’s reserves had fallen below $50 million.
The government has blamed the financial and humanitarian crisis on the Covid-19 pandemic, which reduced the island nation’s income from tourism. However, high government spending and tax cuts also depleted state coffers, while attempts to pay off foreign bonds by increasing money printing led to skyrocketing inflation.
It is unclear whether Rajapaska’s resignation will calm aggrieved citizens. Unions on Monday called for a week of ongoing protests culminating in a march on parliament to demand that President Gotabaya Rajapaksa also resign, the Globe Live Media reported.