Opinion | Sri Lanka died in a Western debt trap and others will follow

As a Sri Lankan, watching international news coverage of my country’s economic and political implosion is like showing up at your own funeral, with everyone speculating about how you died.

Western media accuse China of luring us into a debt trap. Tucker Carlson says environmental, social and corporate governance programs have killed us. Everyone blames the Rajapaksa, the corrupt political dynasty that ruled us until massive protests from angry Sri Lankans drove them out last month.

But from my point of view, the ultimate fault lies with the West-dominated neoliberal system that keeps developing countries in a form of debt-fueled colonization. The system is in crisis, its shaky foundations unmasked by the reversals of the war in Ukraine, resulting in food and fuel shortages, the pandemic and looming insolvency and starvation around the world.

Sri Lanka is exhibit A. We were once an economic hope, with an educated population and an average income among the highest in South Asia. But it was an illusion. After 450 years of colonialism, 40 years of neoliberalism and four years of total failure by our politicians, Sri Lanka and its people have been left in misery.

Former President Gotabaya Rajapaksa exacerbated our debt problems, but the economy was structurally unhealthy in all administrations. We simply import too much, export too little and cover the difference with debt. This unsustainable economy was always about to collapse.

But we’re just the canary in the coal mine. The whole world is connected to this failing system and the pain will be widespread.

Here’s how the last few months have been feeling.

I have a machine, which has now turned into a giant paperweight. Sri Lanka literally ran out of gas, so my kids asked if they could play with it. That’s all it’s good for. Getting fuel took days to wait in overwhelming queues. I gave up. I traveled by bus or bicycle. Most of the economy has stopped moving. Now the fuel has been rationed, but irrationally. The rich get enough fuel for gasoline-consuming SUVs, while working taxis don’t get enough and tractor owners struggle to get anything.

The rupee has lost nearly half of its value since March and many goods are out of stock. You learn to react to the first sign of trouble: when the power outages started a few months ago, my wife and I bought an expensive rechargeable fan; days later, they were out of stock. When the fuel cuts became severe, we immediately bought bikes and the next day their price went up. Commodities such as rice, vegetables, fish and chicken have risen in price.

Many Sri Lankans eat one meal a day; some are starving. Each week brings a new class of people reduced to begging to survive on my door.

I earn in dollars as an online writer, so when the rupee depreciated and was devalued, I actually got a raise. We can afford solar backups and batteries to maintain power. But many others are at the mercy of blackouts. People could not work because factories and other workplaces closed and children could not sleep in the heat. The first major protests began in March after an entire night of this, when it seemed the whole country was sleep-deprived and furious.

Last month, protesters broke into the presidential residence and the prime minister’s office, and that was the only thing that made me feel good. Together with thousands of ordinary Sri Lankans, I was able to see inside these colonial-era fortresses for the first time. It was spontaneous, confident and respectful. Couples went on dates there, parents brought their children. I saw people singing in the president’s house, a mother dancing with her baby, people swimming in the pool. I walked around a hall lined with plaques with the names of British colonizers, which have seamlessly become the names of our own presidents.

In the prime minister’s office, someone was playing the piano and a shirtless man wrapped in a Sri Lankan flag slept on a sofa. Four boys had organized a carrot game and were leafing through the records. A child happily crossed the lawn outside and a community kitchen served rice to anyone who was hungry. It was a beautiful sight in a space where the elites had already munched on canap├ęs, surrounded by armed guards. He was full of hope.

But what had briefly seemed like a true democracy did not last. Parliament simply replaced President Rajapaksa with one of his cronies, Ranil Wickremesinghe, who was prime minister a few times but lost his parliamentary seat in 2020. He denounced protesters and arrested protesters and trade unionists. It was all “constitutional”, eroding trust in the entire liberal democratic system.

Sri Lanka, like so many other countries struggling for solvency, remains a colony with an administration outsourced to the International Monetary Fund. We still export cheap labor and resources and import expensive finished products – the basic colonial model. The country is still divided and conquered by local elites, while the real economic control is held abroad. The IMF has granted 16 loans to Sri Lanka, again under strict conditions. They simply continue to restructure us for further exploitation by creditors.

And as much as the West blames Chinese predatory lending, only about 10 to 20 percent of Sri Lanka’s external debt is owed to China. Most of it is due to US and European financial institutions, or Western allies like Japan. We died in a largely western debt trap.

But big economies are also suffering. Europe faces energy uncertainty, Americans are struggling to fill their tanks, the US may already be in recession, its asset bubble threatens to burst, and British families face food concerns.

It’s about to get worse: The IMF just warned that the likelihood of a global recession is increasing. With the collapse of economies, Western loans simply won’t be repaid and poor nations will get out of the dollar system that supports the Western way of life. Hence, even Americans will not be able to print money to get out of trouble. It has already begun. Sri Lanka has started to settle loans in Indian rupees while India buys Russian oil in rubles. China could buy Saudi oil with the yuan.

The Sri Lankan uprising that ousted our leaders is called Aragalaya. It means “struggle”. It will be long and it is spreading all over the world.

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