A letter from a member of the diaspora

By Devoushi Cooray

Few things unite a country and its population. One is a common enemy. In Sri Lanka’s case, this enemy has become the high levels of economic mismanagement, misdirection, and incompetence characteristic of the incumbent Government, which has brought Sri Lankans from every corner of the world together, to fight for a country on the brink of collapse.

Just a few years ago, Sri Lanka showed true promise of living up to its historic name of ‘Serendip,’ derived from the word serendipity. With the now opposition Government voted in under the promise of “Good Governance,” Sri Lanka was on an upward trajectory, transitioning from low-middle income to upper-middle-income status in 2019.

Foreign direct investment reached $ 1.6 billion in 2018, a 17.58% increase over 2017, and gains were made in poverty reduction, with the President naming 2017 the year of ‘Poverty Alleviation.” 

In 2018, the Government introduced a Blue-Green budget, to align Sri Lanka’s long-term growth strategy with broader climate change and environmental aspirations. The tourism industry was at an all-time high, with Lonely Planet naming Sri Lanka its number one travel destination in 2019. 

Visitors were flocking to explore Sri Lanka’s unspoiled beaches, mountainous countryside, historic ruins, and lively culture. And equally, as important for the everyday citizen wishing for mere freedoms and justice, there were significant gains made in terms of democratic reform.

This progress made after 26 years of war, was no easy feat. However, in the same way, that we don’t know the worth of water until the well is dry; the efforts, albeit not perfect, made by the Opposition were cast aside at the slightest hint of rupture.

And so sadly, Sri Lanka has become yet another example of state fragility, showing us that while building countries takes time; breaking them down can be done overnight.

Following the victory of the incumbent Government, the promise of development that once lay ahead for Sri Lanka has given way to authoritarian rule and an erosion of democracy. The polarisation of Sri Lanka’s society along ethnic lines has led to heightened social tensions, reminiscent of the pre-war period. 

The weakening of Sri Lanka’s governance structures has adversely affected the economy and international relations. And the complete absence of judicial independence has distorted all facets of the country.

Sri Lanka’s economy is today in dire straits. Foreign exchange reserves have fallen by 70% in the past two years and the rupee has depreciated by 32% since the beginning of the year impacting Sri Lanka’s ability to import essential goods. In addition, Sri Lanka’s debt to Gross Domestic Product (GDP) ratio stands at 101%, the rate of inflation is currently 18.7% and foreign direct investment has been declining since 2018.

Once with the highest rates of literacy in South Asia, high-school children in Sri Lanka are currently unable to sit their exams because there is no paper, eight-hour-long power-cuts plague households, and the most basic of supplies, including medicine, groceries, and petrol are in short supply.

Now, for the first time since independence, Sri Lanka has defaulted on its debt. Left with no alternatives, the Government is seeking a bailout from the International Monetary Fund (IMF). 

A sad reminder of the Latin American debt crisis of the 1980s, when many Latin American countries became unable to service their foreign debt and were left to follow IMF programmes targeting debt relief, together with rescheduling and domestic reforms, Sri Lanka now has few options except to follow a similar trajectory.

But before it considers stabilisation and structural adjustment policies to control inflation, reduce the Government budget deficit and improve the balance of payments, Sri Lanka will need to elect the right bureaucrats to manage the ‘financial crisis,’ which has been truly reflective of a crisis of management.

There is a need for significant reform, which may include privatisation of state-owned enterprises, reform of the financial sector, increasing the efficiency of Government spending and tax revenue collection, if Sri Lanka is going to find its way back onto the path it was on before, and it will need the right people to show it the way. There is no perfect Government, and like many, we believe the ideals and values of statesmen that were once willing to sacrifice themselves to better their country is in many ways behind us. But this is not to say, that a brighter future does not lie ahead for Sri Lanka. Never before in Sri Lanka’s history have its people taken to the streets as they have in the last few weeks. While the conditions that have driven people to do so have been abysmal, rooted in suffering and disappointment with a State that could not provide them with the basics of services, it has also been a demonstration of strength, and a sign of hope that we are on the brink of change. As a member of the diaspora, I could not be prouder.