Australia must not let Sri Lanka fall further into the mire

For many Australians, Sri Lanka is associated with cricket, or conjures images of beautiful beaches, hilltop tea plantations and culinary delights. Since 2009, when the almost three-decade civil war ended between the majority Sinhalese and Tamils, the island nation became an economic success story and a much sought-after tourist destination for travellers.

That rosy picture has been replaced by confronting footage from the capital Colombo of government protesters occupying the presidential and prime ministerial residences after months of protests. Shortages of food, cooking gas, fuel and lifesaving medicine have left many struggling to survive, prompting social unrest and violence brought on by the worst financial crisis the nation has faced since it gained independence from Britain in 1948.

A protester runs for cover after soldiers fire tear gas during street violence in Colombo.Credit:Getty

Much of the blame for the country’s economic collapse is being directed at the ruling dynasty of the Rajapaksa family, which has dominated Sri Lanka’s politics for the past 20 years. Brothers Gotabaya and Mahinda Rajapaksa are credited with ending the civil war, but faced allegations at the time of human rights abuses.

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During the Mahinda presidency from 2005 to 2015, the nation took on an enormous amount of debt to develop infrastructure that, in the main, has delivered little or no economic benefit. China has driven several major projects, such as a barely used new airport in the Rajapaksas’ home electorate of Hambantota and a 269-hectare area of reclaimed land in the capital that was billed as a new financial centre to rival Singapore and Dubai, but is still just a construction site. Other poor policy decisions have tipped the county over the edge, as our correspondent Chris Barrett wrote recently, including populist tax cuts that denied the government a quarter of its income, followed by an ill-conceived, overnight ban on artificial fertiliser which drastically cut its export income from agricultural goods.

When the pandemic struck, revenue from tourism evaporated and its economy stalled, leaving it with little means of repaying the $51 billion it owes abroad. The Sri Lankan rupee has plummeted in value and inflation has risen beyond 40 per cent. With the nation effectively broke, it was no longer able to purchase much-needed supplies of essential supplies of energy and food.

While the Rajapaksa brothers have been in and out of power, during the past few years they had held the two most powerful positions of president and prime minister until Gotabaya was forced to flee the country and step down after his residence was overtaken by protesters and his brother, Mahinda, resigned in May as prime minister.

To stave off the worst of the economic collapse, several nations have offered financial aid, including Australia, which gave $50 million last month for urgent medical and food supplies. But it needs to do more.

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Source: News