After Rajapaksa won the 2019 election, reviving one of Asia’s most powerful dynasties, he passed the tax cut immediately in his first cabinet meeting. He then quickly restored presidential powers held during the 10-year rule of his strongman brother, Mahinda Rajapaksa, a period that saw the family end a nearly three-decade civil war before getting voted out in 2015 by a citizenry wary of increased oppression and indebtedness to China.

Instead of learning to govern with more humility, Rajapaksa rushed to restore the family’s brand of populist authoritarianism laced with appeals to nationalism among Sinhalese Buddhists, who make up 75% of the population.

But that strategy quickly backfired. In recent weeks Sri Lanka ran out of cash to pay for essential goods like food and fuel, leading to long petrol lines and daily 13-hour power cuts. Irate citizens burned loaves of bread and ransacked the health ministry to find medicine. Protesters have camped outside the president’s office in downtown Colombo for weeks to demand his resignation.

The Rajapaksa family now is in full damage control mode, racing to ensure basic goods for the citizenry while seeking emergency funds from the IMF, World Bank, China and other lenders. It has stopped paying back foreign debt, defaulting for the first time since achieving independence from the British in 1948. The country’s stock exchange, which had soared after the tax cuts, is the world’s worst performer this year — below even Russia.

What’s more, the Rajapaksas have also been forced to retreat on the two major policies it implemented after the 2019 election. Finance Minister Ali Sabry said the value-added tax must rise for Sri Lanka to shore up its finances, and the Rajapaksas have offered to roll back presidential powers as opponents seek to impeach Gotabaya as president and remove Mahinda as prime minister.

Source: A powerful dynasty bankrupted Sri Lanka in just 30 months | The Japan Times