Ranil Wickremesinghe
Ranil Wickremesinghe, newly appointed prime minister, arrives at a Buddhist temple after getting sworn-in by President Gotabaya Rajapaksa, amid the country's economic crisis, in Colombo, Sri Lanka, May 12, 2022. Image Credit: Reuters

Dubai: Sri Lanka is in the grip of its worst economic crisis since independence in 1948. A power crisis leading to lengthy blackouts, shortage of food, fuel and medicines have forced the people to come on to the streets demanding the government’s resignation. Protests turned violent this week, leading to the resignation of Prime Minister Mahinda Rajapaksa and the appointment of a new one.

Here’s a look at the latest incidents in the island nation and what brought about this turn of events.

Who is the new Sri Lankan prime minister?

Sri Lanka’s President Gotabaya Rajapaksa swore in a new prime minister on Thursday to replace his brother, who was banned from leaving the country after his supporters launched violent attacks on a protest against the nation's dire economic crisis.

The new premier, Ranil Wickremesinghe, 73, who has already served in the office five times, is tasked with navigating the country through the worst downturn in its history.

"A cabinet is likely to be appointed tomorrow," Sudewa Hettiarachchi, a spokesman for President Gotabaya Rajapaksa, said.

Can Wickremesinghe end the protests?

The president's selection of Wickremesinghe is an attempt to end violence triggered by the crisis and restore international credibility as the government negotiates a bailout package with the International Monetary Fund.

US Ambassador to Sri Lanka Julie Chung said she is looking forward to working with Wickremesinghe, and that his appointment and "the quick formation of an inclusive government are first steps to addressing the crisis and promoting stability."

President Gotabaya Rajapaksa,  Ranil Wickremesinghe
In this handout photograph provided by the Sri Lankan President's Office, President Gotabaya Rajapaksa, right, greets Ranil Wickremesinghe during the latter's oath taking ceremony as the new prime minister in Colombo, Sri Lanka, Thursday, May 12, 2022. Image Credit: AP

Wickremesinghe, 73, has been in Parliament for 45 years. His political party split in 2020 amid a leadership crisis and most senior members left to form a new party, which is currently the country's main opposition.

Wickremesinghe's reputation was damaged during his previous term as prime minister, when he was in a difficult power- sharing arrangement with then-President Maithripala Sirisena. Conflict and a communication breakdown between them were blamed for intelligence lapses that led to Easter Sunday suicide bomb attacks in 2019 that killed more than 260 people.

What happened to former prime minister Mahinda Rajapaksa?

A Sri Lankan court on Thursday banned former prime minister Mahinda Rajapaksa, his politician son Namal and 15 allies from leaving the country over violence against anti-government demonstrators.

The magistrate in Colombo ordered police to investigate Monday's mob attacks on peaceful protesters, which led to retaliatory violence that claimed nine lives and caused widespread destruction.

What led to the violence?

Victims of Monday's violence say that Rajapaksa and key aides had brought in around 3,000 of their supporters into the capital and instigated them to attack peaceful protesters.

The loyalist mob poured out of his residence and assaulted anti-government demonstrators with sticks and clubs.

Sri Lankan Army Commando Regiment officers
Sri Lankan Army Commando Regiment officers on motorcycles patrol the street during a curfew in Negombo, Sri Lanka, on Wednesday, May 11, 2022. Image Credit: Bloomberg

Buddhist monks and Catholic priests were among at least 225 people hospitalised after the attack.

Reprisals soon spread across the country, with dozens of homes of Rajapaksa loyalists set ablaze.

The premier resigned and had to be evacuated from his home by heavily armed troops.

The 76-year-old former leader is currently at a naval facility in the east of the island nation.

Who are the Rajapaksa brothers?

The nationwide protests are demanding the removal of the Rajapaksa brothers - a dramatic reversal for Sri Lanka's most powerful political dynasty.

Mahinda and Gotabaya Rajapaska were cheered as heroes by the island's Buddhist-Sinhalese majority for ending a 30-year civil war against ethnic Tamil rebels in 2009.

Sri Lanka’s former President Mahinda Rajapaksa, centre, leaves with his younger brother, President Gotabaya Rajapaksa, right, after being sworn in as the prime minister at Kelaniya Royal Buddhist temple in Colombo, Sri Lanka, Sunday, Aug. 9, 2020. Image Credit: AP

A powerful land-owning family from a rural southern district, the Rajapaksas dominated local elections for years before ascending to national politics in 2005 when Mahinda was elected president.

He remained in power until 2015, when he was defeated by the opposition led by a former aide.

Following the 2019 Easter bombings, the family returned to power under Gotabaya.

Critics have accused the Rajapaksas of relying heavily on the military to enforce policy, passing laws to weaken independent institutions and maintaining a near-monopoly on decision making.

Three other Rajapaksa members were in the Cabinet until early April, when the full Cabinet resigned over the protests.

Sri Lanka
People gather at the main bus stand to catch a bus before curfew starts, after a clash between anti-government demonstrators and Sri Lanka's ruling party supporters, amid the country's economic crisis, in Colombo, Sri Lanka, May 12, 2022. Image Credit: Reuters

What caused Sri Lanka's economic collapse?

Big projects

Sri Lanka has made big investments on infrastructure projects backed by Chinese loans that added to its debts. In southern Hambantota district, a massive deep-sea port bled money from the moment it began operations, losing $300 million in six years.

Other projects nearby tell a similar story - a huge conference centre, largely unused since it opened, and a $200 million airport that at one point was unable to earn enough money to pay its electricity bill.

The projects were pushed by the powerful Rajapaksa family, which has dominated Sri Lanka’s politics for much of the past two decades.

Tax cuts

In 2015, President Mahinda Rajapaksa was voted out of office partly due to a backlash against his government's infrastructure drive, which was mired in graft claims.

His younger brother Gotabaya succeeded him four years later, promising economic relief and tough action on terrorism after the island's deadly 2019 Easter Sunday attacks.

Days after taking office, Gotabaya appointed Mahinda prime minister and unveiled the biggest tax cuts in Sri Lanka’s history, worsening chronic budget deficits.

Ratings agencies soon downgraded the country out of concern that the public debt was spiralling out of control, making it harder for the government to secure new loans.

Pandemic hit

The tax cuts were spectacularly ill-timed: just a few months later, the coronavirus began spreading around the world.

International tourist arrivals dropped to zero and remittances from Sri Lankans working abroad dried up - two economic pillars the government relied upon to service its debt.

Without these sources of overseas cash, the Rajapaksa administration began using its stockpiles of foreign exchange to make loan repayments.

Fertiliser ban

Sri Lanka was soon burning through its foreign reserves at an alarming rate, prompting authorities in 2021 to ban several imports including - critically - fertiliser and agricultural chemicals farmers need to grow their crops.

The government sold this policy as part of an effort for Sri Lanka to become the world's first completely organic farming nation, but its effects were disastrous.

As much as a third of the country's agricultural fields were left fallow by farmers and the resulting drop in yields hit the production of tea - a vital export earner.

The policy was eventually abandoned at the end of 2021 after protests from agricultural workers and skyrocketing food prices.

Shortages and blackouts

By late 2021, Sri Lanka’s reserves had shrunk to $2.7 billion, down from $7.5 billion when Rajapaksa took office two years earlier.

Traders began struggling to source foreign currency to buy imported goods.

fuel gas line sri lanka auto
Three-wheelers line up for fuel at a gas station after a nationwide curfew was lifted for a few hours in Colombo, Sri Lanka, on Thursday, May 12, 2022. Image Credit: Bloomberg

Food staples such as rice, lentils, sugar and milk powder began disappearing from shelves, forcing supermarkets to ration them.

Then gas stations started running out of petrol and kerosene, and utilities could not purchase enough oil to meet the demand for electricity.

Long queues now form each day around the country by people waiting hours to buy scant supplies of fuel, while blackouts keep much of the capital Colombo in darkness each night.

Debt and default

President Rajapaksa appointed a new central bank chief in April, who soon announced that Sri Lanka would default on its $51 billion foreign debt to save money for essential imports.

The move failed to shore up the country’s deteriorating finances, and it only had around $50 million in useable foreign exchange at the start of May.

The country is now in negotiations for an International Monetary Fund bailout.

- with inputs from AFP, Reuters and AP