The economic crisis in Sri Lanka was caused by various reasons including wrong economic policies of the government, corruption, institutional weaknesses, lack of good governance, nepotism and the authoritarian mindset of elected politicians.
The crisis in Sri Lanka can be a lesson for every county in this region. Instead of waiting till the last minute, it is necessary to bring about appropriate changes in phases to overcome the crisis.
Young Sri Lankan economist Rehana Thowfeek made these remarks during a discussion on the recent economic crisis of Sri Lanka held at a hotel in the capital this Saturday evening. Bangladesh Institute of Peace and Security Studies (BIPSS) organised the discourse titled ‘Sri Lanka’s Economic Crisis: Lessons for this Region’.
Moderator of the event, BIPSS president Major General (retd) ANM Muniruzzaman delivered the introductory note. Rehana Thowfeek in her presentation spoke about the causes of Sri Lanka’s economic crisis, its aftermath and the transition from it. She then answered questions from the audience.
Giving examples of the series of incidents in Sri Lanka, she made certain recommendations for South Asian countries to overcome such crises.
Rehana Thowfeek said Sri Lanka will transition from the economic crisis in phases. She talked about the source of the crisis, listing the bombing at Easter Sunday celebrations in 2019, Covid-19, the tourism-based economy taking a hit from structural flaws, price hike of commodities, foreign loans mounting up, and flawed government policies.
Despite all the discrepancies, the economy of Sri Lanka has started gaining pace with aid packages from the International Monetary Fund (IMF). Giving examples of the series of incidents in Sri Lanka, she made certain recommendations for South Asian countries to overcome such crises.
In Rehana’s opinion the crisis worsened due to Sri Lanka’s administrative weaknesses and the elected politicians turning into dictators after assuming power.
Because the politicians didn’t engage in any sort of discussions before taking the bad decisions, there was no balance at all. Overall, she also blamed Sri Lanka’s internal structural crisis and blows like the amendment of constitution for the crisis.
When asked how big of a role mega projects like the Hambantota deep sea port and the Mattala airport played in the crisis, Rehana Thowfeek said these projects are only a tiny part of Sri Lanka’s mega-scale crisis.
However these projects are inevitably the true reflection of a corrupt system. There are allegations that most of the projects of this nature are indeed imposed by a certain group.
Rehana Thowfeek believes that the politicians as well as the administrators appointed on political consideration are also to be blamed for the crisis in Sri Lanka.
Actually the government didn’t want to implement these projects at all. Some of the investors approached with proposals and said, “We’ll give you this loan, take up the projects.” And this shows that the problems are rooted in corruption.
Rehana Thowfeek believes that the politicians as well as the administrators appointed on political consideration are also to be blamed for the crisis in Sri Lanka. While taking up many of the mega projects, the interests of the influential and wealthy have been prioritised instead of public demand, she added.
The common public won’t get advantage of the expressway that has been constructed between Colombo and Galle on the south of the country. Yet, the government didn’t invest in public transport. They didn’t bring up any reformsn in the railway sector left behind by the British. That means the government and the politicians have spent millions for the rich which didn’t benefit the majority public, Rehana Thowfeek said.