This is what caused Sri Lanka’s worst economic crisis

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Sri Lanka’s ruling Rajapaksa family is facing mounting public anger, calls for resignations and political defections amidst the island’s worst economic crisis in its post-independence history. The family’s fall from grace has been rapid and precipitous. In November 2019, Gotabaya Rajapaksa convincingly won the presidential election with just over 52 per cent of the vote. A few months later, an alliance led by his brother Mahinda (President of Sri Lanka between 2005 and 2015) won the parliamentary elections, securing almost 60 per cent of the vote.

The proximate reasons for these dramatic reversals are clear. The Rajapaksas have badly handled Sri Lanka’s twin crises of unsustainable commercial debt and an acute balance of payments shortfall. The latter was brought on by the Easter Sunday bombings and the Covid-19 pandemic, which together hammered foreign exchange earnings. These exogenous shocks would have tested the most competent of…

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