Sri Lankan protests set to overthrow government: why did it happen and what’s next?

Thousands of protesters refused to leave official residences Sri Lanka‘s President and Prime Minister on Monday after occupying both houses for days. A wave of national outrage over the cost of living in the impoverished country seemed to topple its leaders, and the largely peaceful sit-ins at both men’s opulent homes — and the protesters’ refusal to leave — were a literal and symbolic display of defiance.

The prime minister’s office confirmed on Monday that President Gotabaya Rajapaksa would step down on Wednesday – in line with a key demand from the protesters.

Massive demonstrations erupted over the weekend in the South Asian island nation of 22 million people, which is just off the south-east coast of India. Sri Lanka has been mired in an economic crisis for months, and a sense that its plight is not only unresolved but unrecognized by its leaders, thousands of angry protesters flocked to the president’s official residence in Colombo on Saturday.

Protesters also set fire to Prime Minister Ranil Wickremesinghe’s private home on Saturday. He has refused to step down until a new government is formed.

The protesters are calling for the two men to leave immediately, blaming them for the mismanagement of Sri Lanka’s economy.

Rajapaksa has not spoken publicly since his home was raided on Saturday. According to reports, he may be on a naval ship offshore.

Despite assurances from the country’s speaker of parliament that the president will step down, protesters are refusing to leave his seafront mansion, even though the president himself has not been seen for days.

Videos posted online and broadcast by news outlets show protesters running through the lavish residence, some taking a dip in the garden pool while others lounge on beds or use the showers.

How come?

Sri Lanka has been cash-strapped for months and is struggling to pay for imports of essentials like food and fuel. The government blamed the COVID-19 pandemic for weakening the country’s tourism revenue, which is a major driver of Sri Lanka’s economy. But economists say there are other factors, including political corruption and economic mismanagement.

The country has defaulted on its massive $51 billion in foreign debt and is unable to make interest payments on its loans. While the government is negotiating a $3 billion rescue package with the International Monetary Fund (IMF), it is initially dependent on aid from India and China.

President Rajapaksa has also been criticized for the large tax cuts he introduced in 2019, which have cost the government more than $1.4 billion a year. His government also last year banned chemical fertilizers to boost organic farming – a move that caught farmers by surprise and resulted in crop failures, eventually forcing the government to import food, exacerbating foreign exchange shortages.

The value of the Sri Lankan rupee has collapsed by 80% in recent months, making imports more expensive and inflation worsening. Grocery costs have increased by more than 50%. The confluence of factors has left Sri Lanka on the verge of national bankruptcy with little cash left to import essentials, making everyday life a struggle for millions of people.

For the past few months, in the sweltering summer heat, the people of Sri Lanka have faced daily power cuts lasting up to 12 hours, with a dire fuel shortage that has caused thousands to queue at petrol stations just to get a gallon or so of extremely expensive fuel, and so on acute shortage of food and medicine.

Anger at the government only grew when protesters began entering the homes of leaders and unveiling the luxuries the president was enjoying while many in his country were starving.

What’s next for Sri Lanka?

It could be weeks or months before the country’s food and fuel supplies begin to return to normal, even if the IMF soon offers a bailout.

Parliament Speaker Mahinda Yapa Abeywardena said a new coalition government must be formed within a week of the president’s official resignation, and political opposition parties held talks on Sunday to discuss the formation of a new government. Further talks are expected in the coming days.

According to the constitution, if both the President and the Prime Minister resign, the Speaker of Parliament should take over as interim President.

But with the government’s apparent sudden collapse, it’s unclear when a new full government might be formed, or if the country’s people or foreign organizations trying to help the island nation will trust the leadership.

In addition to a possible IMF bailout, the World Bank has agreed to lend Sri Lanka $600 million. India has pledged $1.9 billion to help and could borrow another $1.5 billion for imports. The G7 group of countries – the US, Canada, France, Germany, Italy, Japan and the UK – have said they will help Sri Lanka secure debt relief.

But it seemed like the beleaguered people of Sri Lanka still faced a few days, if not weeks, of uncertainty before any of the potential bailout packages could begin to bring some relief on the ground.