FIRST PERSON - Alex Magno - The Philippine Star

There was no drama here, only ignominy.

Over the weekend, Sri Lanka’s president Gotabaya Rajapaksa promised to vacate his post on Wednesday, July 13. Now we know why he needed a few days for his resignation to take effect. On Tuesday the 12th, he and his family fled to Maldives by military jet after immigrations authorities denied him exit on a commercial flight.

The youngest of the Rajapaksa brothers, former finance minister Basil, left the country ahead. Their eldest brother Mahinda was president of the country when government finally ended the decades long Tamil insurgency.

Gotabaya served in his brother’s Cabinet as defense secretary. He was held responsible for serious atrocities committed putting down the insurgency. Nevertheless, the overwhelming Sinhalese majority elevated him to the presidency.

Last Tuesday, two decades of political dominance by the Rajapaksa brothers ended ignominiously as protesters occupied the presidential palace and forced Gotabaya into hiding. By fleeing, he abandons his people who are left with no options to dig the country out the hole.

During Gotabaya’s presidency, all fiscal prudence was thrown to the wind. He reduced taxes and borrowed heavily to fund vanity projects. That produced the fiscal and financial crisis now gripping Sri Lanka.

Sri Lanka today has no foreign currency reserves to speak of and is buried in debt it could not service. The country could not import oil, food and medicines until they get their hands on some hard currency. Its 22 million population now faces a grave humanitarian crisis. This is the outcome of fiscal irresponsibility.

Gotabaya’s flight offers no solution. There is no political solution to a fiscal mess. All the political maneuvering will be like changing seats in a sinking ship.

There is now talk of an “all-party” coalition government being formed. In the meantime, since the Prime Minister also resigned, the Speaker of Parliament holds power until new elections are held.

However power is distributed in the projected “all-party” coalition, this will not change the financial facts on the ground. Without fuel supplies, the economy will grind to a halt. Without the capacity to import food, famine will haunt the land. Without the cash to purchase vital medical supplies, many will die.

While Gotabaya enjoys the sun and the sand in Maldives, his country faces a horrific future. The only way to climb out of the fiscal and debt crisis is to tax the people heavily. But if the economy is gone, there will be nothing to tax. A dead horse cannot deliver salvation.

Sri Lanka was not destined for this. Bad governance – specifically bad fiscal management – brought about this fate.

When irresponsible fiscal management brings about a debt crisis, the failed state wins little sympathy from the rest of the world. We saw that when Greece was unable to pay its debt. We see that in the runaway inflation that cripple several African economies for years.

It is simply difficult to summon sympathy for a country that failed to exercise discipline. Because of this, we see no offers of international support to rescue Sri Lanka as the country falls into a bottomless pit.

Gotabaya failed his people. His only choices were to flee or be lynched in the streets. Neither, however, will produce the hard currency the country needs desperately.

Sri Lanka’s terrible predicament should be a lesson for other countries that might be easily seduced by populist promises. In the modern world, competent fiscal management is everything.


Days before events in Sri Lanka reached its crescendo, British Prime Minister Boris Johnson resigned as leader of the Conservative Party. This sets in motion an internal process that will select a new party leader and, therefore, a new prime minister.

With irrepressible wit, the Economist magazine called Johnson’s political demise a “clownfall.” Indeed, everything about Johnson’s time at the top seems comical.

Several weeks ago, the man with the funny hair survived a no-confidence vote in Parliament. Nevertheless, the vote seriously weakened Johnson’s grip over his own party. It simply altered the method of his expulsion.

When the UK was in tight lockdown because of the pandemic, it was found that Johnson held a number of parties at his official residence. This included a merry gathering on the very day funeral services were held for Prince Phillip. The police fined him for every instance of indiscretion.

Those lockdown violations undermined the British leader’s credibility at a time it was needed most.

Britain posted a 9.1 percent inflation rate, one of the highest among the developed economies. This is driven, as it is everywhere else, principally by sharply higher energy costs caused by the war in Ukraine. It is also caused by trade blockages and other inefficiencies resulting from Brexit.

From an economic point of view, Britain’s decision to leave the European Union was a bad idea. But nationalism has always been a seductive ideological proposition. The Conservative Party backed Brexit. The two preceding Conservative prime ministers – Cameron and May – left office mainly because of their failure to effectively manage the economy transitioning from the common market.

Brexit, to be sure, is the original sin. Every British leader is at greater risk of failure because of this unforced error. Exiting the European Union condemns the UK to a long period of economic isolation and stagnation.

Reviving the British economy despite isolation compounded by high energy costs is a serious mission. Johnson, however, added more than a tinge of comedy to the job.


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