Anti-government protesters in Colombo, Sri Lanka, July 9, 2022

Sri Lankans are crying for food, fuel and a government they can trust: The world needs to listen

By Elizabeth Holbourne, Speechwriter, OECD Development Centre

When I introduce myself as half Sri Lankan, people’s eyes usually light up as they tell me about the wonderful holiday they had there with family and friends. In a country once seen as one of the most rapidly developing nations in South Asia, Sri Lanka’s economic crisis spiralling into a humanitarian crisis could very well be a bellwether of what is to come in many other parts of the world.

1.2 billion people live in 69 “perfect-storm” countries, which are severely vulnerable to all three food, energy and finance dimensions of the cost-of-living crisis brought about by the war in Ukraine, according to United Nations Secretary-General’s Global Crisis Response Group (GCRG). Over six million Sri Lankans, or three in 10 households, are unsure of where their next meal is coming from, according to the World Food Programme.

Since the unfolding of the economic crisis in March, young middle-class professionals who have seen their purchasing power vanish, students, families and people desperate for change, have taken to the streets, taking part in largely peaceful demonstrations. Sri Lanka’s protests (#GotaGoGama) calling on the government to address the endemic corruption that has plagued the country for decades have prompted mass resignations and forced the president to resign and flee the country.

United protests after decades of division

This unprecedented wave of citizen mobilisation has united Sri Lankan people of all ethnicities, religions, genders and class, and created spaces for public activism in the form of discussions and “teach-outs”, on the reasons behind the crisis, and educational puppet and theatre shows – all demanding accountability, transparency and much-needed reforms. Organisers have provided protesters with free food, medical assistance and even libraries. Sri Lankans are also mobilising online, organising and denouncing disinformation. These are all powerful means to bring about change and overcome divisions.

Despite the glimmer of hope a new government might offer, without international support to address Sri Lanka’s crushing foreign debt crisis, the likelihood that the new government will be able to tame rampant inflation and worsening shortages of food, fuel and medicine, is slim to none. Sri Lanka’s public debt to GDP ratio rose from 91% to 119% between 2018 and 2021. Inflation has reached over 54% and half a million people fell below the poverty line (earning less than USD 3.20 per day) in 2020 due to the COVID-19 shock, which especially affected the tourism sector.

A crushing debt crisis driving a humanitarian catastrophe

Sri Lanka’s total foreign debt amounts to USD 51 billion, USD 28 billion of which must be repaid by 2027. Sri Lanka defaulted on its external debt in April and has since held talks with the International Monetary Fund (IMF). The “common framework” established by the G20 and the Paris Club which was supposed to help countries like Sri Lanka by bringing together creditors and debt-distressed nations, assign losses and help these countries with their debt restructuring, has unfortunately failed to do so.

Meanwhile, as Sri Lanka grapples with these immediate and urgent concerns, it must not lose sight of decisions made in light of the current crisis, which will shape its energy security and transition in the future. The drastic drop in fruit, vegetable and paddy production that followed former Gotabaya Rajapaska’s sudden ban on chemical fertilisers and agrochemicals in the name of “organic agriculture” was a cautionary tale against ad-hoc policy changes. Sri Lanka is considered one the world’s most vulnerable countries to climate change with huge implications for its agricultural, tourism and energy sectors. A well-planned renewable energy transition, with citizen buy-in, could lower fuel imports and reduce vulnerability and reliance on international markets.

Unprecedented citizen mobilisation must be met with bold action

Sri Lankans have endured and overcome a three-decade civil war, humanitarian disasters and a large-scale terrorist attack. Yet in a country whose economy been steadily expanding and middle-class growing, no one could have seen a crisis of this scale coming. The mostly peaceful, creative and united demonstrations show that Sri Lankans want to hit the re-set button and build a better future – one in which they play a leading and active role in deciding what is best for the country. How citizens have responded to the crisis should be harnessed as a force for good.

Newly elected President Ranil Wickremesinghe pledged that parliamentary committees will allow lawmakers, young people and experts to work together, calling on protest groups to join in the process of reform. He should follow through on both promises: that of involving citizens and that of carrying out bold reforms. The international community must also play its part to help solve the debt crisis. Without bold action, and as the most vulnerable populations are ravaged by hunger and unable to meet their most basic needs; what might have begun as constructive and peaceful protests could very well escalate into much more violent demonstrations.

People want food and fuel but they also want justice, accountability and good governance. The next government must listen. So should the rest of the world. Due to a similar combination of pandemic-driven high debt levels, rising interest rates, weakening currencies and food shortages, Tunisia, El Salvador, Ghana, Ethiopia and Pakistan are the five countries most at risk of facing a major economic crisis like that of Sri Lanka, according to Bloomberg’s chief emerging markets economist. Sri Lankans are crying for change. The world needs to pay attention.