Political Landscape of Sri Lanka’s 2022 Economic Crisis

This chapter investigates the root causes of Sri Lanka’s first-ever economic crisis through a political lens. It examines the role of three political regimes since 2005 (to 2022) for this purpose. It adopts a qualitative, in-depth case study approach, predominantly utilizing the secondary data collected through a thorough analysis of existing documents, including the review of the literature. The findings of the research reveal how the extreme level of clientelism practiced by the 2005–2014 government (prioritizing short-term political gains over sustainable economic policies) ultimately weakened the country’s economy and made it vulnerable to external shocks. It further reveals how the succeeding governments (2015–2022) continued the same practices for their “political survival” rather than correcting such policies, thereby leading the economy of the country to be fragile over the years. The research also emphasizes the “rationality” of the political patrons in making the policy decisions, which were rooted in their expected (personal) political gains rather than collective benefits for the community. While acknowledging the impact of external triggers like the COVID-19 pandemic and Easter Sunday Attacks on eliciting the crisis, the chapter emphasizes how the two major political decisions, that is, reliance on Chinese development funds and capital market borrowings, led Sri Lanka’s economy into an economic crisis, through exacerbating foreign debt in the long term. This research, taking Sri Lanka as an example, reveals the intricate relationship between a country’s political landscape and its economic outcomes.