Inside Sri Lanka's Economic Meltdown

Grand Tamasha

Sri Lanka has been the site of dramatic economic and political upheaval over the past several weeks as years of economic mismanagement have resulted in rampant inflation, shortages of essential commodities, and the country’s first sovereign default in the post-independence era.

The island’s dire economic conditions have spurred angry, and sometimes violent, protests which resulted in the sudden resignation of Prime Minister Mahinda Rajapaksa and continued calls for the resignation of Gotabaya Rajapaksa, the country’s president and the prime minister’s brother.

To discuss the economic and political causes and consequences of this crisis, Milan is joined on the show this week by political economist Ahilan Kadirgamar. Ahilan is Senior Lecturer at the University of Jaffna and one of Sri Lanka’s leading political economists.

Ahilan and Milan discuss the tense situation on the ground, the economic roots of the current crisis, and the prospects for a return to wide-scale violence. Plus, the two discuss India’s role in extending an economic lifeline to Sri Lanka and whether the island nation can put a decades-old legacy of ethnic strife behind it.

1. “Rethinking Sri Lanka’s economic crisis,” Interview with Ahilan Kadirgamar, Himal South Asian, February 28, 2022.
2. Ahilan Kadirgamar, “Polarization, Civil War, and Persistent Majoritarianism in Sri Lanka,” in Thomas Carothers and Andrew O’Donohue, eds., Political Polarization in South and Southeast Asia: Old Divisions, New Dangers (Washington, D.C.: Carnegie Endowment for International Peace, 2020).
3. Ahilan Kadirgamar, "Sri Lanka stares at bankruptcy or redemption," The Hindu, April 16, 2022.
4. Ahilan Kadirgamar. "The Political Economy of the Crisis in Sri Lanka," Economic & Political Weekly, April 30, 2022.