It was around October 2021 and Jayaweera, a Sri Lankan media mogul and close friend of Sri Lankan President Gotabaya Rajapaksa, had invited Basil Rajapaksa, the President’s younger brother, who was also the Finance Minister, for dinner. Little love was lost between Basil Rajapaksa and Jayaweera, who had long distrusted each other. However, as the pair dined in his elegant office in Colombo, the media mogul had some pressing questions for the man in charge of Sri Lanka’s economy. Was the country headed for a terrible crash? “Basil couldn’t even answer my basic questions,” Jayaweera said. “He was giving very poor answers – that we will find money from here, from there, saying that it would be fine to pay off our debts. I saw then that he really didn’t understand economics at all. that’s done, dusted, finished for us.” Former Sri Lankan Finance Minister Basil Rajapaksa. Photo: AFP/Getty Images What came less than six months later was the worst economic crisis Sri Lanka has experienced since independence in 1948. The woes it has caused, as the coffers dry up and the country cannot import fuel, food and medicine, have not leaving almost no one on the island of 22 million people unscathed. According to the UN, Sri Lanka is facing a “terrible humanitarian crisis”. Many are struggling for one meal a day, surgeries and cancer treatments are on hold, schools are closed and gasoline sales have stopped as fuel runs out. “Our economy has completely collapsed,” the prime minister, Ranil Wickremesinghe, told parliament recently. It sparked an unprecedented political reckoning in Sri Lanka, largely focused on the Rajapaksa family dynasty, which held power in Sri Lankan politics for two decades. Since March, mass demonstrations have called for the resignation of the president. Mahinda Rajapaksa, his brother and former prime minister and president, has already resigned due to the pressure, as has Basil Rajapaksa and several other family members who were in cabinet or held political positions. According to those who saw it from the inside, the story of Sri Lanka’s crisis has its roots in this family, which concentrated power to the point where the country came to resemble an authoritarian family business, accountable to no one. until it drove the nation into bankruptcy. . As Sri Lanka began to unravel, the family became embroiled in internal strife and the once cordial relationship between the two brothers Gotabaya and Mahinda turned sour as both clung to power. On May 9, family divisions spilled out into the streets as the country saw its worst violence in more than three decades. Cabinet ministers, opposition politicians, aides and confidants of Rajapaksa – many of whom still have interests and strong ties to various members of the Rajapaksa family – overwhelmingly pointed to Basil, the youngest of the brothers and her so-called general family, as the one who oversaw the fall. Initially operating as a shadowy power broker behind the scenes before becoming finance minister, he was described by several ministers as having unparalleled influence over the president and cabinet, yet he proved inept at managing the economy and ignored multiple warnings that a financial collapse was coming. Mahinda and Gotabaya Rajapaksa wave to supporters at a party convention in 2019. Photo: Eranga Jayawardena/AP “Basil was the real force,” said Udaya Gammanpila, who was a cabinet minister between 2020 and 2022 before Basil removed him in March amid public criticism. “Gotabaya didn’t know how bad things were and Mahinda was getting old and not in the best of health, he was just the top. Everything was controlled by Vasilios.” Basil declined to be interviewed for this article, and his close aides declined to speak on the record. Sri Lanka’s economic problems began long before Gotabaya took power in late 2019. From 1977 onwards, successive governments built the country on a precarious debt foundation. Imports overwhelmingly exceeded exports, and a progressive but costly welfare state further widened the deficit, which was covered by more high-interest borrowing. “This was a ticking time bomb that had been building up for several decades,” Gammanpila said. “Everything was built with loans, not money.” Since 2005, when Mahinda was elected president and the family began to dominate the political landscape, they have also begun borrowing relentlessly, first to pay for Sri Lanka’s three-decade civil war against minority Tamil separatists, which ended brutally. in 2009, then for a “hyper-development” development spree of roads, airports, stadiums and power grids. GDP rose from $20 billion (£16.6 billion) to $80 billion, but in the process more than $14 billion was borrowed, and the Rajapaksas were all mired in charges of large-scale corruption, from bribery to money laundering. Scooter riders pass the Galle Fort in Galle, Sri Lanka. Photo: Ishara S Kodikara/AFP/Getty Images Mahinda lost the 2014 presidential election, but the dynasty had no intention of relinquishing power. Basil, who was out on bail on corruption charges that were later dismissed, set out to found a new political party, the Sri Lanka Podujana Peramuna (SLPP). After a constitutional amendment meant that Mahinda was not allowed to run for a third term, it was decided – after considerable resistance from some in the family – that Gotabaya would be their candidate in the November 2019 presidential election. But speaking in 2018, Basil made his intentions known. “The truth is that if Gotabaya emerges, it will be me who runs the country as he is new to politics,” he told local media. Gotabaya, an austere, pious and upright military man, was the opposite of his elder brother, the charismatic and politically astute Mahinda. He had attracted the support of an influential group of intellectuals, business leaders and academics, who believed he would carve his own path away from the previous Rajapaksa regime. However, Gotabaya’s experience in politics was limited. he held only the unelected post of defense minister in the Mahinda administration, where he was honored for ending the civil war, despite accusations of war crimes. Once Gotabaya took office, “the family took over. he was only dancing to their tune,” said Nalaka Godahewa, a former chief executive turned SLPP MP who had supported Gotabaya. Basil loyalists were given key cabinet portfolios and the family parachuted in PB Jayasundara, a bureaucrat with a decades-long relationship with Mahinda and Basil, to become secretary and economic adviser to the president. Jayasundara was once barred from holding public office, but this was later overturned. “Gotabaya had no political experience and knew nothing about finance. it was entirely dependent on PB Jayasundara to manage the economy,” said Charitha Herath, an SLPP MP who sat on several parliamentary finance committees. “The problem was that he was giving very bad advice.” A soldier guards gas cylinders in Colombo that are to be distributed to those struggling in the economic crisis. Photo: Adnan Abidi/Reuters On his advice, Gotabaya implemented sweeping tax cuts in 2019, despite international warnings against him, causing government revenue to fall by more than a trillion rupiah in two years. As Sri Lanka was hit by Covid and money from tourism and foreign remittances dried up, Jayasundara pushed back on import bans and went to the IMF to restructure the country’s loans, even as debt repayments mounted and warnings were issued by the monetary central bank’s board since November 2020. He is also accused of feeding the president misleading information, including a cash flow statement – which Jayaweera said he saw for himself during a meeting with Gotabaya in early 2021 – which presented a rosy picture of Sri Lanka’s output. The Rajapaksas’ grip on government became even tighter after the SLPP swept the 2020 parliamentary elections. Mahinda became prime minister, while his son and heir apparent, Namal Rajapaksa, was inducted into the cabinet, as was his older brother Rajapaksa, Chamal. “The Rajapaksas controlled the whole country,” said Asanga Abeyagoonasekera, a Sri Lankan political analyst and author. “The government became authoritarian, hyper-nationalist and heavily militarized.” They pushed for an amendment to the constitution that concentrated more power in the hands of the president and allowed dual citizens to become members of parliament. Shortly thereafter, in July 2021, Basil – who is also a US citizen – became finance minister, although many in the cabinet believed he had already run the economy with Jayasundara behind closed doors. According to several ministers, Basil quickly became the de facto head of the cabinet. He would decide which cabinet papers would be approved and have the final say on all major decisions, while Gotabaya and Mahinda – now in his 70s and retired from decision-making – would nod along with him. “The president accepted whatever proposal Basilios put to him,” said Vasudeva Nanayakkara, a left-wing lawmaker who was a cabinet minister in Gotabaya’s ruling coalition until April this year. Basil did not tolerate dissent in the cabinet and under his watch, those in the cabinet and financial oversight committees claim they were presented with misleading information about the country’s finances. Protesters drag an effigy of Gotabaya Rajapaksa through the streets of Colombo last month. Photo: Eranga Jayawardena/AP “I submitted 11 cabinet documents warning of the impending crisis,” Gammanpila said. “But whenever we brought up a financial issue, Basil felt that we were interfering with his work and he was offended. Repeatedly…
