How One Powerful Family Destroyed A Country

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Hi welcome to another cold fusion video
this is sri lanka, population 22 million
and an independent island off the coast
of southern india.
not long ago they were south asia’s most
developed nation,
but right now they’re in a severe
economic crisis. The country is 51
billion dollars in debt rolling
blackouts are rampant the currency is
crashing, medication fuel and some food
is in short supply,
even school exams had to be cancelled
because of the shortage of printing
paper
an economic crisis in sri lanka which is
becoming increasingly dramatic with
residents life savings virtually
disappearing into thin air
one estimate from johns hopkins
university shows real inflation at over
130 percent in march the government is
even asking airlines to stop refueling
in the country to save on fuel many sri
lankans have had enough of the horrific
situation the homes of government
officials have been torched and the
sitting prime minister even had to flee
to a naval base for his own safety
protesters have also stolen the
presidential residence they were
swimming in the president’s pool eating
his food and drinking his alcohol so how
could such a disaster happen
well
first we need to look at the rajapaksas
family
you are watching cold fusion tv
[Music]
the rajapaksas has been a powerful
family in the country for a while their
wealth came from rice and coconut
farming and their power from their
activities and politics in trilankan
politics you have to be somebody to be
elected as rosine sally a professor at
the national university of singapore
told the washington post quote you
cannot win in politics if you’re not
from an established family
the second of nine children mahinda
rajapaksa became president in 2005 and
for 10 years the country became a family
business
as the family’s influence grew soon
other brothers sons nephews cousins
daughter-in-laws and other relatives
joined the government occupying top
positions in various administrations sri
lanka was now a family affair
mahinda named his brother gotabaya as
defence secretary while basil and their
oldest brother jamal were placed in
charge of irrigation and economic
development
sri lanka enjoyed years of growth fueled
by a mountain of foreign debt but for
much of their rule things were going
well
despite some critics many sri lankans
were fans of the ruling family not only
for bringing up the country in social
standing but also for bringing peace to
the nation
from 1983 to 2009 there was a horrific
civil war in the country a rebel group
called the temple tigers would fight
against the government citing
discrimination after a 26-year military
campaign the sri lankan armed forces
militarily defeated the tamil tigers in
may of 2009 and this brought the civil
war to an end
at this time the president and the
defense ministry were brothers after the
defeat of the rebels the pair were held
as heroes
mahinda enjoyed the adulation of voters
who approved of his bloody yet decisive
victory in a 26-year civil war against
the tamil rebels but it wasn’t a squeaky
clean image for the brothers
allegations of corruption including
questionable deals with chinese state
counterparts swirled around mahinda his
brother gotabaya was also implicated
though to a lesser extent he was facing
scrutiny over the purchase of mig
fighters from ukraine
but these scandals didn’t stop the
family from spending big
he promised huge infrastructure projects
including a chinese-built airport which
sits largely empty
he tried to jumpstart growth by
borrowing heavily and attracting foreign
capital by propping up the sri lankan
rupee in the short term the strategy
worked the economy boomed causing a per
capita gross domestic product to more
than double from 2006 to 2014.
this vaulted sri lanka past ukraine the
philippines and indonesia it lifted 1.6
million people out of poverty and gave
rise to a large middle class
by 2019 sri lanka ascended to the ranks
of the world bank’s upper middle-income
countries
though all of that growth came at a cost
sri lanka’s external debt tripled from
2006 to 2012 pushing total public debt
to 119 percent of gdp
in 2015 these policies were suspended
but the debt continued to accumulate
with each passing year the family
government made even more mistakes each
mistake led to ever greater risk
[Music]
when the military brother gotabaya got
into power in 2019 he promised tax cuts
to get elected when this came around the
government lost 25 percent of its
revenue
to make things worse in 2020 covert
smashed tourism for sri lanka tourist
income was a huge source of funding to
pay back foreign debt
then 2021 rolls around and russia and
ukraine go to war in an ill twist of
fate before the war russians frequently
made up the biggest share of sri
lankan’s turrets with ukrainians not far
behind
as the flights to moscow were suspended
and the ukrainians are at war sri
lanka’s tourism industry suffers even
more
in april of 2021 the rajapaksa
government made another fatal mistake
to prevent the drain of foreign exchange
reserves all fertilizer imports were
completely banned this move was
extremely radical as no country can
feasibly run their food supply on 100
organic fertilizer on a whim
farmers overnight had to stop producing
and the food supply collapsed the
country had to start importing rice and
other food goods and the price of food
exploded
rubber and tea two major exports also
ground to a halt
the government reversed the policy in
november of 2021 but the damage was
already done
last year in a highly controversial move
the sri lankan government banned the use
and import of chemical fertilizers
overnight in a bid to become the first
country in the world to fully adopt
organic farming while the ban was later
reversed after protest the crop yield
was already affected
the income we get is not enough to cover
our expenses
this is the only work we do we have no
other work
and then things went from bad to worse
the country was spending more than it
made imported more than it exported as a
consequence its foreign reserves began
to run dry
this in itself isn’t too unusual as a
lot of countries do this and end up
borrowing more money to keep themselves
afloat but the difference here is that
the foreign debt for sri lanka is so
high that they can’t even pay the
interest to keep the debt expansion
going
to make things even worse oil prices
were exploding internationally so
importing that cost even more than
normal and being a small island
dependent on deliveries by sea made this
a nightmare for sri lanka
the inability to import led to food
shortages as foreign exchange reserves
remain under strain
in february of 2022 the official
inflation numbers rose to 17.5
by june it was 55
[Music]
the price of cooking gas for example is
almost three times higher than it was
just a few months ago even printing
paper is hard to come by forcing schools
to close and cancel exams
in march of 2022 the sri lankan rupee
posted its biggest single day decline in
more than 40 years
these next numbers highlight just how
fast the situation is deteriorating
sri lanka’s foreign currency reserves at
the end of 2019 stood at 7.6 billion
this had fallen to 1.93 billion in march
of 2020 and by july of 2022 all that
remains is 50 million
there is no longer enough foreign
currency to import basics such as fuel
on june 29th 2022 the country suspended
fuel sales it only had enough fuel for
just one more day and it will be given
out in absolute emergencies it was the
first country to ban sales of petrol
since the fuel crisis in the 1970s
before long the situation was horrific
citizens began starving and there was a
shortage of everything food and fuel
being the most pressing
long fuel lines are a common sight
arguments occur and fights break out
one rickshaw driver even dies of heat
stroke
the government is now so short on funds
that it’s going to start printing money
to pay employees salaries and most of us
know how that turns out
it’s basically the end of the line for
the sri lankan economy sri lanka no
longer has money to import goods and
they can no longer function to produce
enough revenue
in april the government defaulted on its
external debt worth 51 billion 7 billion
more is due at the end of the year
starting in early april of 2021 protests
began to erupt all over sri lanka at
first the government tried to squash the
protesters triggering deadly crashes
across the country but they couldn’t
hold back the tide of anger
the rajapaksa brothers once held by many
as heroes for winning the civil war are
now reviled as leaders it’s a dramatic
fall from grace for a family that
dominated sri lankan politics for over a
decade
the former president mahinda rajapaksa
had to be evacuated from his official
residence after protesters attempted to
storm the house other family houses at
the rajapaksas have also been targeted
elsewhere in sri lanka people are so
frustrated
because of rajapaksa
we need our money back we need our
country back we are here to support us
these people
i mean everyone can see that how much
we’re suffering there’s lines everywhere
gas petrol
currently sri lanka isn’t a very risky
situation with great uncertainty and
just to highlight this as i was
finishing up the episode more news broke
on june 10th hundreds of thousands of
protesters broke into president
gottayaba’s official residence
[Applause]
and they swarmed into the office of a
president already fled
[Applause]
at 10 am local time he fled
gotayaba’s motorcade was seen speeding
down the highway out of the city
his secretary and other officials didn’t
know his whereabouts but he was later
stopped at the airport trying to flee
the country to dubai
after he left protesters wearing helmets
and waving sri lankan flags broke into
the president’s residence some cooking
food in the kitchen while others are
seen swimming in the pool there was even
a piano sing-along in one of the rooms
to lift morale
and for the first time several sri
lankan military personnel joined the
protesters marking a turning point in
the government’s control of the
situation
the protests and storming of the
government residents also shows what
happens when governments lose control of
an economy
all other world governments should be
watching this closely
overall it’s a tragic situation a potent
combination of government mismanagement
and external economic and geopolitical
factors
moreover without a stable government
it’s going to be very difficult to
negotiate loans or restructure the
country’s debts
so it looks like the end of the
rajapaksa family dynasty and the long
years of complete control it exercised
over this island nation
so how can this be fixed
well basically the only option is to get
loans sri lanka is seeking emergency
loans of 3 billion to pay for essential
imports such as fuel
the world bank has agreed to lend 600
million and the government is also
asking for 4 billion from the
international mandatory fund the imf
said that the government must raise
interest rates and taxes as a condition
for the loan which would make the
country’s cost of living crisis even
worse
they’re also seeking help from china
india qatar australia japan the us and
more
sri lanka and india have signed a 1
billion credit line for importing
essentials including food and medicine
sri lanka owes 6.5 billion dollars to
china and the two are in talks on how to
restructure the debt
china agreed to bolster sri lanka’s
foreign currency reserves by swapping
the sri lankan rupee for its currency
the remnimi though since then china has
signaled displeasure over sri lanka also
approaching the imf for help
the rajapaksas are now not only
concerned for their political future but
also for their safety and security when
a new government takes over
we can only hope that things turn around
for the nation and they can get the
resources they need to rebuild their
economy no citizen of any nation
deserves what has happened to the people
of sri lanka
so i’ve been sitting on the script for a
couple of months just waiting and seeing
if things would improve but they really
haven’t so i think it’s ultimately
important that people know what’s going
on here so stay safe out there if you’re
from sri lanka
generally speaking the news cycle can be
quite negative but what if you could
just leave it all behind put a stop to
the endless doom scrolling and internet
arguments well that’s what many people
have started to do it’s a phenomena
dubbed the dumb phone revolution it’s
living a life with a phone that only
does calls and texts i’ve made a cold
fusion episode on it and it’s an
interesting look into why and how this
is happening if you want to see this
episode right now you can head to my
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some housekeeping before i leave you for
those of you who follow my music be sure
to check out my new album hello world on
bandcamp it’ll be on spotify soon but
yeah that’s it from me my name is dagogo
and you’ve been watching cold fusion and
i’ll see you again soon for the next
episode
cheers guys
have a good
[Music]
you

 

 

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