Dilrook Kannangara

Last year (2022) saw some unprecedented events in Sri Lanka. For the first time in history, a president and a prime minister were removed and replaced without a vote. Although the parliamentary composition remains same, the direction, policies, events, decision-making, priorities and international standing have changed for the better.

While some lament their loss of ministries, positions, power and trade deals following the events of July 2022, the nation has its own report card.

Corruption significantly reduced since Aragalaya.

Corruption was the biggest pain point that was talked about during Aragalaya. People had to endure extreme corruption which ruined the economy and dashed all hopes of recovery. Whether it was planes, ships, trains, roads, COVID-19, education, prices of goods, etc. people were complaining about corruption. Since Aragalaya all these events and their impact significantly reduced. This is a rare win for Sri Lanka which progressively collapsed into more and more corruption.

Hyperinflation eased.

By April 2022 Sri Lanka was plagued by hyperinflation for the first time in history. Cost of goods was rising daily. Sri Lanka shared the top ranks in world inflation with some nasty companions. Things eased very well within a few months of July 2022 and today inflation is down to a manageable level. More gains are possible. Prices of some essential goods reduced for the first and second time in the last few months. This was unthinkable during 2019 to 2022.

Foreign reserves grew.

By April 2022 Sri Lanka had run out of all useable foreign reserves. This was despite having over $8 billion foreign reserves in 2019. The island nation recovered from absolute zero in July 2022 to over $2 billion by March 2023. A remarkable recovery. Some attribute this to the non-payment of foreign loans which is not true. After January 2022, Sri Lanka did not repay foreign loans but the situation just got worse and worse.

Farmers have fertilizer, fishermen and buses have diesel, stores have goods and people have some hope.

By the start of 2022 the country was in a dire situation without fertilizer for farmers which resulted in mass starvation, crop failure, social unrest and economic shrinkage. Petroleum fuel was a hard-to-find commodity. Queues for kerosine, petrol, diesel, gas and furnace oil extended for 10 kilometres in some cases. People spent days in queues, sleeping in them overnight and even falling dead.

Shops had a limited supply of goods despite ridiculous moves by the government issuing over 9 gazettes for the price of rice and 6 gazettes for the price of coconuts in 2021 and early 2022.

This hopeless situation gradually eased since Aragalaya. Although there is a long way to go, if the post-Aragalaya trajectory continues Sri Lanka will recover from the dark years of 2019 to 2022. What is noteworthy is that these were achieved without gazettes, deployment of the army to warehouses, arresting middlemen and other coercive tactics. Any economist would say such coercive tactics fail to overcome inflation, manage supply and demand mechanics and achieve price control.

Ship mishaps and marine pollution ceased.

As by magic, what became a regular during 2021 to early 2022 totally ceased after Aragalaya. A number of ships sank in Lankan waters causing unprecedented pollution. The island nation had not suffered such enormous marine pollution before. Since Aragalaya succeeding, fishermen, coastal dwellers, Sri Lanka navy and the air force could rest easy.

Tasks leading to debt restructure commenced after Aragalaya.

There is no surprise here. Despite repeated calls by economists, the government was not interested in any debt restructure until July 2022. Although discussions were held between various creditors in early 2022, there was no structured approach to debt restructure. Paris Club did not come to the rescue of Colombo as the latter had no plan of overcoming the crisis. The most the government did was to deny the existence of a debt crisis and waged a verbal war against credit rating agencies. It only made matters worse. By July 2022 letters of credit issued by local banks were turned down by overseas banks and suppliers.

This chaotic situation was carefully untangled by the government since July 2022 and Sri Lanka scored major wins in securing the confidence of all creditors for a credible debt restructure plan. Replacing military officers with civilians with subject matter knowledge also helped.

Political violence significantly reduced since Aragalaya.

Despite violence within Aragalaya, political violence very significantly reduced since Aragalaya. People welcome this development. Violent elements within political circles were tamed as never before. A new sense of respect towards the common masses emerged from within political circles.

Since Aragalaya the Sri Lanka rupee steadied.

Thanks to sensible economic decisions taken since August 2022, Sri Lanka managed to stabilize the local currency. Sri Lankan banks gained confidence and expatriate workers started to remit their usual amounts once again in 2023 after a lapse of 2 years.

There was a cultural awakening too after Aragalaya.

Traditional New Year and Wesak celebrations in 2023 were a refreshing change from what the island endured since 2019. People’s generosity despite severe adversity added to the sweetness of the slow recovery.

However, not everything is rosy since Aragalaya. There are a few striking adverse developments that emerged after Aragalaya.

No elections since Aragalaya.

Not having elections since Aragalaya has obvious and heinous repercussions. Aragalaya succeeded in removing the president, the prime minister and the Cabinet of ministers. However, that is not the way of democracy. The sooner Sri Lanka gets back to democracy to elect their president, prime minister, ministers from an elected parliament, the better. The president and the prime minister have no mandate from the people to hold on to their positions. Voters must be consulted. In addition to presidential and parliamentary elections, local government and provincial council elections are due. These elections must be held as soon as possible.