Why Sri Lankans are protesting on the streets

Protesters burn politicians' homes as the country plunges into further chaos. [Source: CNN]

If you are a regular internet user, you must have come across chaotic pictures from Sri Lanka, where protests are ongoing.

From the pictures and media reports, there have been violent scenes in Sri Lanka.

Mobs are targeting the homes of prominent political figures including the ruling Rajapaksa family.

Prime Minister Mahinda Rajapaksa resigned.

His resignation, according to a report by BBC, was because of the government's handling of the island nation's worst economic crisis since gaining independence from Britain in 1948.

However, his brother, Gotabaya Rajapaksa has refused to step down as president.

At the beginning of April, protests over rising prices of commodities and shortages flared up in the capital, Colombo.

The protests have now spread across the country.

A BBC report states that food prices in Sri Lanka started rising in late 2021. Food prices have gone up by 30 per cent.

Fuel shortages, power cuts and a lack of medicines are also in play.

Protestors attempted to storm the prime minister's official residence while Mahinda Rajapaksa was inside, and have attacked Rajapaksa family houses elsewhere in Sri Lanka.

The family has played a prominent role in Sri Lankan politics for years, occupying top positions in various administrations.

Mahinda Rajapaksa was president during the country's long-running civil war, which ended with the defeat of the Tamil Tiger rebels in 2009.

His younger brother, Gotabaya, who served as defence minister at that time, is now Sri Lanka's president.

Gotabaya has said he has no intention of quitting as president, and last week declared a state of emergency.

Two other siblings, Basil and Chamal Rajapaksa, who held key positions in government, resigned last month as the crisis in the country worsened.

And Namal, one of Mahinda Rajapaksa's sons, did the same, quitting his government post.

Sri Lanka's problems come down to the fact that its foreign currency reserves have virtually run dry.

The country is heavily reliant on imports but can no longer afford to pay for staple foods and fuel.

The government blames the Covid pandemic, which all but killed off Sri Lanka's tourist trade - one of its biggest foreign currency earners.

It also says tourists were frightened off by a series of deadly bomb attacks on churches three years ago.

However, many experts say economic mismanagement is to blame.

At the end of its civil war in 2009, Sri Lanka chose to focus more on its domestic markets instead of selling to foreign ones. So income from exports remained low, while the bill for imports kept growing.

Several populist policies have also been blamed for worsening the situation.

When he came to power in 2019, President Rajapaksa decided to offer big tax cuts. This means the government now has less money to buy foreign currency.

Mr Rajapaksa now admits the tax cuts were a "mistake," and Finance Minister Ali Sabry has said they resulted in an estimated loss of more than $1.4bn in government revenue.

Sri Lanka's government has racked up $51bn (£39bn) in foreign debt.

This year, it will be required to pay $7bn (£5.4bn) to service these debts, with similar amounts for years to come.

In April, the Sri Lankan government failed to make repayments totalling $78m. Credit rating agency S&P called this a "selective default".

It was the first time Sri Lanka had defaulted on its foreign debts since independence.

Sri Lanka is seeking emergency loans of $3bn to pay for essential imports such as fuel. The World Bank has agreed to lend it $600m. India has committed $1.9bn and may lend it an additional $1.5bn for imports.

The government is also seeking a bail-out from the International Monetary Fund (IMF), and talks on this are continuing.

The IMF has said the government must raise interest rates and taxes as a condition for a loan, which would make the country's cost of living crisis worse.

Sri Lanka owes $6.5bn to China and the two are in talks on how to restructure the debt.

China earlier agreed to bolster Sri Lanka's foreign currency reserves by swapping the Lankan rupee for its currency, the renminbi. Since then, it has signalled its displeasure over Colombo approaching the IMF for help.