To understand the current political and economical crisis in Sri Lanka, we must understand the country’s political system first. Sri Lanka is a democratic republic and a unitary state. It is governed by a semi-presidential system, with a combination of a presidential system and a parliamentary system. The Parliamentary system is divided into legislative, executive, and judicial branches. The legislative branch of the Sri Lankan government is responsible for making laws for the country. The executive branch consists of the President, consultants, and several departments. This branch is responsible for enforcing the laws of the state. Meanwhile, the judiciary branch consists of the system of courts.
Sri Lanka is one of the few contemporary states that has remained a distinct sovereign unit for over 2000 years.
It can also rightly claim to have made itself notable in the land of international affairs in those years. Sri Lanka since the 1950s has followed a non-aligned foreign policy and does not take sides with key powers. Sri Lanka is the second home of Buddhism from where it was carried to other countries. Buddhism became an incentive and an encouragement in the foreign policy of Sri Lanka.
The Sri Lankan economy has found itself in a state of constant collapse. But this economic meltdown is not a shock. Years of negligence have been intensified by several external shocks and the Rajapaksa’s reluctance to seek assistance from the International Monetary Fund (IMF) earlier.
Sri Lanka now struggles with budget deficits, hyperinflation, a devalued currency, and a huge sovereign debt that it can no longer afford to pay. Over the years, Sri Lanka has maintained a non-aligned foreign policy. One of the main principles of this policy is “the friendship towards all, enmity towards none”. In June 2022, the Prime Minister of Sri Lanka Mr. Ranil declared in a parliamentary session that the economy had collapsed, leaving the state in bankruptcy. The country has thus pursued improved relations with all chief powers and seeks to reinforce its diplomatic, economic and military ties with China, India, and Pakistan.
In September 2022, the UN reported that the economic catastrophe is a result of officials’ ignorance of human rights abuses and economic wrongdoings.
How can it overcome this dilemma?
Keeping in mind the above problems, Sri Lanka can adopt the following policies or solutions. To overcome the diminished value of the currency, Sri Lanka needs to improve trade relations with multiple countries all around the world by initiating Free Trade Agreements (FTA). These improvements may attract foreign investments which result in demand and an increase in its economy.
By doing all of the above, Sri Lanka can easily pull itself out of bankruptcy. It is common knowledge by now, that the dire situation in the country is largely due to the misuse of country assets by government officials. To solve this problem, evil must be removed from its core. By employing law-abiding and honest people, the country can find itself to be in a much better economic and political situation than ever before.
