Amid Economic Crisis, Sri Lankan President Sacks Critical Minister and Official, Issues 'Gag Order' for Rest

Amid Economic Crisis, Sri Lankan President Sacks Critical Minister and Official, Issues ‘Gag Order’ for Rest


Sri Lankan President Gotabaya Rajapaksa, who is under fire over worsening economic conditions, seems to have directed his anger against his own colleagues in the government. Two weeks after dismissing the agriculture secretary who had warned of an approaching food crisis, he has now sacked a minister for criticising some of his policies.

Minister of state Susil Premajayantha’s unceremonious sacking does not seem to have gone down well with the ruling SLPP and many MPs and ministers are expressing their displeasure in private. Realising that the situation is getting out of hand, the former military man Gotabaya has warned his ministers and MPs not to speak against the government in public.

“It is unethical to speak against their own party and government. If they have any disagreements, they should discuss everything in party forums or in the Cabinet, not outside,” the President has said.

After his tough talk, some senior ministers, who were expected to challenge the President, have gone quiet.

Sri Lanka, the only upper-middle-income country in South Asia, is going through its worst economic crisis in decades. The Covid-induced back-to-back lockdowns in the past two years have ravaged the thriving economy, pushing at least a million people into poverty. The President’s irrational decision to go organic overnight has also caused huge damage to the farm sector, turning the farmers against the government. The total ban on using chemicals and chemical fertilisers has destroyed crops across the island nation, triggering fears of a severe drought and food shortages in the next few months.

However, the President has refused to reconsider his decree and there is no clarity on the burning issue.

Tourism, one of the top foreign currency earners and job creators, has been ruined due to the pandemic. Tourism alone employs over 30 lakh people and generates $4-5 billion every year. The fear of a third wave has hit the sector, which was showing signs of recovery in the past three months.

Since the foreign reserves are at an all-time low, the government has put severe restrictions on imports. Sri Lanka imports most of its essentials and non-essentials. The departmental stores have rationed rice, sugar, flour, dal, milk powders, etc, across the nation as they don’t have foreign currencies to pay for the imports. The island country is also facing a huge shortage of cooking gas.

According to the Central Bank of Sri Lanka (CBSL), the foreign reserve stands at a mere $1.5 billion as against a healthy $5-6 billion, two years ago. Desperate for money, Sri Lanka is negotiating with both India and China for an immediate bailout. According to insiders, it is expected to get over $3 billion by the end of January.

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Sri Lanka’s foreign debts are mounting and if there is no financial assistance from India or China, it may even default on loan repayments. It has an outstanding repayment of $5 billion in the next 2-3 months. With no US dollars to spare, Sri Lanka has decided to pay its Iranian oil import bills in the form of tea.

“Sri Lanka has to pay about $259 million to Iran for the oil. Since we don’t have any dollars with us, we have decided to export tea. It is some kind of barter with Iran. It is not going to violate any UN sanctions on Iran,” said a top bureaucrat.

The automobile sector, which is almost import-based, has taken a big hit. Since it can’t import vehicles, the demand for used vehicles is increasing across the country. The home appliances market is also witnessing a similar scenario.

Finance minister Basil Rajapaksa is scheduled to visit India next week to finalise a financial assistance package for his country. The Chinese foreign minister is also scheduled to visit Sri Lanka in a week.

There is also a buzz that Prime Minister Mahinda Rajapaksa, who is reportedly ill, is stepping down to make way for Basil. However, the PMO, in a statement, has dismissed these reports as mere rumours.

The opposition parties have demanded that the Rajapaksa administration either put the economy back on track or quit. The ruling SLPP has described it as an overreaction to a global slowdown and economic crisis due to the pandemic.

Meanwhile, the ordinary people hope that the island nation does not collapse.

“We have seen much worse in the past. We bounced back. We will bounce back once again. We are a resilient nation,” said Nishantha, a businessman from Colombo.

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