It is the worst crisis the country has gone through since its independence in 1948, and it has just reached new heights.

For lack of fuel, Sri Lanka is now completely at a standstill.

On Sunday July 3, Energy Minister Kanchana Wijesekera said the country's gasoline reserves stood at around 4,000 tonnes, slightly below the usual level of one-day consumption - an announcement that sparked stopping public transport.

A shortage that comes on top of those of essential goods, including food and medicine, long daily power cuts and record inflation in a context of serious political crisis.

If the situation predates the war in Ukraine, the politico-social crisis in Sri Lanka did indeed accelerate last April with the explosion of energy prices linked to the invasion of Ukraine by Russia.

In June, inflation in Sri Lanka passed the symbolic threshold of 50%.

Food prices jumped by almost 60% compared to the previous year.

So much so that for the middle class, vegetables like cabbage, cauliflower and carrots are now seen as luxury foods.

The shortage of foreign currency no longer allows the country to import enough food, fuel and other essential products.

"There are oil tankers waiting in the harbor in front of Colombo. The problem is that there is nothing to pay them, because the government has no more foreign currency", supports Éric Paul Meyer , historian specializing in Sri Lanka.

Also, unable to repay its external debt of 51 billion dollars (nearly 49 billion euros), the Sri Lankan government declared itself in default of payment in April and is currently negotiating with the International Monetary Fund with a view to a possible bailout.

“There have already been periods of intense shortages, especially in the 1970s”, relates the historian, professor emeritus at Inalco.

"But such a brutal and violent shortage is completely new."

Deep roots

The crisis in Sri Lanka took a turn last year with the abrupt decision of President Gotabaya Rajapaksa to ban all chemical fertilizers, pesticides, herbicides and fungicides in order to make the country the first in the world to be 100% organic.

Billed as the fulfillment of a campaign promise to embrace organic farming, the measure was received more as an attempt to save dollars by limiting imports.

But in an economy where the agricultural sector employs between a quarter and a third of the national workforce, such a measure had devastating effects.

Drop in yields, closure of plantations, job losses, food shortages... "To the revolt of the agricultural world faced with a drop in yields was added that of the working classes forced to queue to get their food, and at booming prices", explains Jean-Joseph Boillot, associate researcher at Iris, specialist in major emerging countries, in particular the Indian world.

“The result was the triggering of a well-known vicious circle: brutal inflation, loss of confidence, currency crisis, capital outflow and therefore budgetary and balance of payments crisis leading to a debt crisis. "

But for Éric Paul Meyer, the Sri Lankan economy has been weakened since the 1980s. "The country has abandoned the foundations of its plantation economy to turn to tourism, but also income from immigration, garment industry and the global market," he explains.

An element of weakness aggravated, he says, by the civil war (1983-2009) between the Tamil minority and the Sinhalese Buddhist majority.

"The country could have started again on a new basis, but the government of the Rajapaksa has, since 2009, sought to increase its presence on world markets, and there has been no search for a new form of economic development. "

To these structural causes, anchored for decades, were then added economic causes, including the collapse of tourism, the Covid-19 crisis and, adds Éric Paul Meyer, "a series of rather monumental errors in terms of governance tax which have made things worse over the past 15 years".

Crony capitalism and corruption

The Rajapaksa family has ruled Sri Lanka for much of the past two decades.

Mahinda Rajapaksa, the current president's brother, served as head of state from 2005 to 2015. The clan enjoyed deep support among much of the population for ending, according to supporters, to a decades-long civil war in 2009.

But since the years 2007-2009, the clan system that was put in place at the head of the state with the Rajapaksa has resulted in significant losses of budget revenue linked to tax gifts made to those close to power and the deep rooting of crony capitalism – a capitalist economy where business success depends on close relationships with government officials – within power.

>> To read also: "Splendour and fall of a political dynasty in a Sri Lanka on its knees"

“There is a lot of corruption, and there has also been a lot of inconsistency in the way the government has managed its budget”, explains Éric Paul Meyer, also referring to electoral promises in terms of taxation.

In the November 2019 elections, Gotabaya Rajapaksa pledged to implement drastic tax cuts – eliminating seven taxes and lowering the VAT rate from 15% to 8%.

Populist measures adopted, as promised, after his victory, while the country benefited from a four-year IMF loan.

On this already well-established fiscal fragility and external indebtedness, the first symptoms of the crisis did not take long to appear, manifesting themselves in considerable inflation, an attack on the financial markets and the vertiginous fall of the Sri Lankan rupee, which lost more than half of its value in two months.

External debt now exceeds 70% of GDP.

And the latest forecasts from the ADB (Asian Development Bank) for 2022 give a continuation of the recession around -2.4%.

Demonstrations but "no real insurrection"

Can this crisis of internal governance lead to the end of the Rajapaksa dynasty?

"There is enormous discontent in the country, but which is not organized by the political parties", explains Éric Paul Meyer.

For the historian, this movement is comparable to the Hirak in Algeria.

Opposed to the maintenance in power of Abdelaziz Bouteflika and his regime, the Hirak demonstrated its rejection of corruption and demanded a democratic political transition breaking with the "system".

As in Algeria from 2019 to 2021, demonstrations have punctuated the lives of Sri Lankans for several months who, of all generations and social classes combined, have taken to the streets to protest against the shortage of gasoline, the rise in the price of rice and foodstuffs. food, and demand the departure of President Rajapaksa.

"The president has changed government, but this government is far from being popular and from having the keys to solving the problem," said Éric Paul Meyer.

However, despite a catastrophic situation, there is, for the moment, no real insurrection within society, he adds.

And in any case, recalls for his part Jean-Joseph Boillot, "we know that a capacity for revolt does not necessarily translate into a capacity for an alternative to power".

The summary of the

France 24 week invites you to come back to the news that marked the week

I subscribe

Take international news everywhere with you!

Download the France 24 app

google-play-badge_EN