Shenali D Waduge

Sri Lanka’s current economic collapse cannot be understood in isolation. It is tied to the 2015 regime change, orchestrated with heavy involvement of the United States and India, which removed the Mahinda Rajapaksa government (though not without its share of faults). The Yahapalana” coalition that came to power in January 2015 was a patchwork alliance of:

• TheUNP (Ranil Wickremesinghe)
• A breakaway SLFP faction led byMaithripala Sirisena (backed by Chandrika Kumaratunga)
• TheTNA (Tamil National Alliance)
• JVP
• Backing from sections of theNGO lobby, civil society activists, Western-funded groups, and pro-Indian intellectuals

This coalition was united not by a shared vision, but by a single mission: to weaken and dismantle the Rajapaksa administration and align Sri Lanka with Western and Indian geopolitical interests by this time India had become a QUAD partner.

Some of the pro-West and pro-India policy shifts during 2015–2019 included:

• Co-sponsoring theUNHRC Resolution 30/1 against own country & its armed forces (2015) – unprecedented in history.
• Entering into strategic agreements like theETCA framework with India and moving toward US-backed pacts such as MCC, ACSA, SOFA. ACSA signed in 2017.
• Weakening state enterprises and pushingprivatization/foreignization agendas.
• Re-orienting economic borrowing away from concessional loans(low interest, long term) toward short-term International Sovereign Bonds (ISBs) — overwhelmingly purchased by US-based venture funds and hedge funds.

Between 2015–2019, Sri Lanka issued over USD 12 billion in ISBs, at interest rates often 6–8%, repayable in lump sums. These borrowings, unlike earlier concessional loans from Japan, China, or multilaterals, became a debt time bomb that directly caused the reserve crisis of 2020–2022.

The same external forces that engineered 2015 re-emerged in 2022 during the Aragalaya.” Mass protests, fueled by both genuine hardship and NGO/social media campaigns, forced President Gotabaya Rajapaksa out of office.

Who returned to power? Ranil Wickremesinghe — unelected, with only one seat in Parliament, but acceptable to Washington, New Delhi, and global financial actors.

Today, many who do not know this history are being made to believe Ranil is the savior” of the economy. The reality is that the economic foundations of collapse were laid during the 2015–2019 Yahapalana years, under his leadership, with full external backing.

Q1: Who actually declared Sri Lanka’s default?

A: It was not Parliament or the President.

The declaration came from the Central Bank Governor Nandalal Weerasinghe and Finance Minister Ali Sabry in April 2022.

Q2: Why did they declare default?
A: They claimed Sri Lanka had no foreign reserves to pay creditors.

Q3.What resulted from declaring default

Critics argue it was a hasty, externally-influenced decision that shut the door on alternative options like bilateral support, bridge financing, or negotiated restructuring.

Declaring default meant Sri Lanka could no longer borrow normally, open LCs… this decision indirectly forced Sri Lanka into the arms of the IMF under strict conditions.

Q4. How did Sri Lanka suddenly suffer shortages in fuel, gas and essentials?

Once default was declared, Sri Lanka lost access to normal credit lines.

Suppliers demanded cash upfront.

Sri Lanka had very low foreign reserves (dollars) to pay for fuel shipments, cooking gas, medicines, and other essentials couldn’t be paid for.

This caused the long queues, blackouts, and shortages people faced in 2022.

Q5: Why didn’t Sri Lanka have enough foreign reserves?

A: Because Sri Lanka had borrowed heavily in short-term commercial loans (ISBs) instead of relying mainly on concessional loans.

These loans had to be repaid in big lump sums. At the same time, the country’s exports were too low compared to what we spent on imports (fuel, food, medicine, vehicles, luxury goods).

Tourism and remittances — two big dollar earners — also dropped sharply after 2019 COVID.

By 2021–22, the government had to spend almost all the reserves just to service old debt, leaving nothing for essentials.

Q6: Who was responsible for taking short-term commercial loans (ISBs), and why were these taken? How much, when, and on what terms?

A:

Until 2014, Sri Lanka’s foreign debt was mostly long-term concessional loans from Japan, ADB, and World Bank — low interest, long repayment (20–30 years).

In 2015–2019, under Prime Minister Ranil Wickremesinghe’s Yahapalana Government, the debt strategy changed.

Instead of long-term concessional loans, they shifted to International Sovereign Bonds (ISBs) — short-term, commercial borrowings at 6%–8% interest.

These loans were like taking payday loans — high interest, short term, and had to be repaid all at once — unlike concessional loans that are like a mortgage (low interest, long repayment).

• How much?Between 2015–2019, nearly $12.5 billion in ISBs were borrowed.
• Why?To cover budget deficits, maintain artificial stability of the rupee, and repay maturing old ISBs instead of negotiating restructuring.
• Terms:These loans were lump sum repayment (no gradual installments), unlike concessional loans which are paid slowly.
• Impact:By 2020–22, huge repayments came due all at once. With low reserves and no backup plan, Sri Lanka was pushed into default.

Who was responsible when Sri Lanka turned to ISBs (2015–2019)?

Key decision-makers:

• Prime Minister / Minister of Policy Planning:Ranil Wickremesinghe (UNP) — architect of economic policy shift.

Finance Ministers:

• Ravi Karunanayake(2015–2017)
• Mangala Samaraweera(2017–2019)

Central Bank Governors:

• Arjuna Mahendran(2015–2016) — infamous for the 2015 Bond Scam.
• Indrajit Coomaraswamy(2016–2019) — continued ISB dependence.

Economic Advisors / Think Tanks backing policy:

• Advocates of liberalization” & ISBs included officials tied toPathfinder Foundation, Advocata Institute, Verité Research (many with foreign donor influence).

So, the trap was created during 2015–2019:

short-term borrowing, high interest, lump sum repayments, no reserves built.

Q7. Who is being blamed for the economic crisis?

A: The common narrative pushed locally and internationally is that Gotabaya Rajapaksa is solely responsible. But this is not accurate.

• The roots of the crisis go back to 2015–2019 under the Yahapalana (Sirisena–Ranil) Government, which shifted Sri Lanka from low-interest, long-term concessional loans to high-interest, short-term ISBs (mostly from US venture funds). This created the debt trap.
• By the time Gotabaya took office in Nov 2019, 70% of ISB repayments were already locked in (had to be paid)
• The COVID-19 pandemic (2020–2021) wiped out tourism and remittances, cutting $8–10 billion in annual foreign exchange. JVP carried out campaign scaring people from sending remittances back home.
• The 2022 global commodity shock (oil, gas, food) after the Ukraine war made imports unaffordable.
• Yes, Gotabaya made policy mistakes (fertilizer ban, not taking loans or reaching out to traditional friendly nations, prioritizing reserves). But he did not create the structural debt crisis — he inherited it.

So, blaming Gotabaya alone hides the bigger story: the 2015–2019 decisions and externally influenced regime changes that laid the foundation.

Q8. When Gotabaya Rajapaksa failed, why was Ranil Wickremesinghe the only one who came forward?

A: Because the crisis was engineered in such a way that Gotabaya would take the fall and Ranil could return as the saviour.”

• Ranil had no public mandatein 2020 (he lost his seat, his party UNP collapsed), yet he was the only option” offered when GR resigned.
• He allowed Gotabaya to carry the blamefor the ISB repayments that were actually created under his own (2015–2019) Yahapalana tenure.
• Once public anger was directed only at GR through the aragalaya, Ranil could step in as President without election.
• This gave him the perfect chance to continue what he could not finishduring 2015–2019:
  • Strengthening Western and Indian influence in Sri Lanka.
  • Carrying forward IMF-led austerity reforms.
  • Restructuring state assets (privatization) to foreign interests.
  • Re-aligning foreign policy away from China.

In short, Ranil’s rise was not sacrifice, but calculated timing, helped by those who supported the aragalaya which arose because there were no dollars to buy essential commodities — letting Gotabaya fall so he could come in as the solution” to a crisis his camp helped to create. Unfortunately, even the so-called educated are unable to understand this ground reality.

Q9. Does this mean that Ranil Wickremesinghe paved the way for a change of government knowing it would collapse within a short time, being aware of the foreign reserves and financial situation — which the new government was unaware of?

A: Yes.

• The Yahapalana government (2015–2019) under Ranil knew exactly the debt maturity trap they had createdby taking short-term International Sovereign Bonds (ISBs) from US-based venture funds.
• These bonds were stacked to mature in clusters after 2019, meaning whoever came to power would inherit an impossible repayment schedule.
• By late 2019, foreign reserves were already dangerously low. Ranil, as PM and Finance-influencer, was fully aware of this, but the public and even Gotabaya’s camp were not presented with the true picture.
• The new government under GR inherited this time bomb. The pandemic and the 2022 Ukraine war worsened the pressure — but the root causewas already laid by Yahapalana.
• Once the collapse came, the blame was successfully pinned only on GR, creating the vacuum for Ranil to return, unelected, and continue alignment with Western-Indian agendas.

In short, the collapse was not an accident — it was a calculated setup. Ranil’s camp planted the debt trap, kept quiet, let GR walk into it, and then returned when the explosion forced regime change.

Q10. Why is it so difficult for even the educated to understand this very basic ground reality?

A: Several factors contribute to widespread misunderstanding:

1. Complexity of Finance vs. Simplified Narratives
2. ISBs, foreign reserves, debt maturities, and IMF programs are technical. Most media reports simplify them into GR failed” or Ranil saved us,” hiding the underlying debt trap.

• Controlled Information and Media Spin
• Many outlets pushed a narrative that blamed Gotabaya Rajapaksa for the crisis, while portraying Ranil as the saviour,” obscuring the 2015–2019 origins.

• External Influence & Political Engineering
• US-India-backed political maneuvering and the global financial connections of ISBs were not highlighted publicly. Ordinary citizens or even the educated were often unaware of who orchestrated the debt structure.

• Focus on Immediate Crises
• People saw queues, shortages, and inflation. They reacted emotionally to visible suffering rather than analyzing the policy decisions made years earlierthat caused the crisis.

• Misinformation & False Hero Narratives
• Social media and international coverage frequently cast Ranil as the problem-solver, while ignoring that his policies in 2015–2019 created the time-bomb.

Even educated citizens can be misled if the historical context, technical debt structure, and foreign influence are not clearly explained. Without connecting 2015–2019 policies to 2022 collapse, the public is left with a distorted saviour vs. failure” story, rather than the real picture.

Q11. Did Ranil reduce the debt burden after taking office?

A: No. The debt burden continued to grow under his leadership, largely because he relied on IMF-backed loans, new bilateral loans, and domestic borrowing to meet repayment schedules, rather than restructuring the economy for long-term sustainability.

Q12. Did Ranil reverse the ISB debt trap created in 2015–2019?

A: No. The ISBs taken earlier were still maturing, and Ranil’s government continued servicing them under IMF conditionalities. The structural debt problem remains — repayments from 2027 onward are still huge, leaving little room for development.

Q13. Did citizens see immediate relief under Ranil?

A: Not substantially. While he stabilized some short-term imports, citizens continued to face higher taxes, reduced subsidies, inflation, and privatization of state assets, which were part of IMF-mandated austerity measures.

Q14. Did Ranil create new foreign reserves or sustainable income streams?

A: No. The focus was on managing existing obligations, not building long-term reserves or reviving exports and tourism to pre-crisis levels. Economic growth remains weak.

Q15. Did Ranil take steps to protect strategic national assets?

A: No.

During his tenure, several privatizations and foreign partnerships continued in key sectors such as ports, energy, and airports, reducing national control over strategic resources. A notable example is the leasing of Hambantota Port to a Chinese company for 99 years, in exchange for around $1.1 billion, effectively handing over operational control of a major national asset for nearly a century.

Q16. Did Ranil restore public confidence or independence in policy-making?

A: Partially, but largely within IMF or Western-backed frameworks. Monetary and fiscal policy remained constrained, limiting sovereign control over economic decisions.

Q17. What are the long-term impacts of these sacrifices on Sri Lanka?

A: The combined economic, strategic, and political decisions under Ranil have several lasting consequences:

• Loss of National Control over Strategic Assets
• Leases and other privatizations reduce the country’s control over critical infrastructure.
• Future governments have limited ability to reclaim or use these assets independently.
• Debt Dependency and Economic Vulnerability
• Reliance onIMF programs, US venture fund ISBs, and bilateral loans keeps Sri Lanka under external oversight.
• Fiscal policy is constrained — higher taxes, reduced public services, and limited ability to invest in national development.
• Erosion of Sovereignty
• Geopolitical commitments (MCC, ACSA, ETCA) bind Sri Lanka to Western and Indian strategic interests.
• Reduced freedom to negotiate independently with other global partners, including China, Russia, or Middle Eastern countries.
• Limited Long-Term Economic Growth
• Funds are focused on debt servicing, stabilization, and meeting foreign commitments rather than building new infrastructure or generating domestic revenue.
• Citizens face stagnation in wages, job opportunities, and public service quality.
• Public Discontent and Social Strain
• Prolonged austerity, higher living costs, and cuts in welfare may increase social unrest.
• Future governments will struggle to reverse unpopular policies implemented under external pressure.
• Generational Impact
• National wealth is diverted to foreign debt repayments instead of education, health, or technology investments.
• Future generations inherit the burden of foreign-controlled debt and compromised sovereignty.

Q18. Is the savior” narrative accurate for future generations?

A: No.

While immediate collapse may have been managed, long-term vulnerabilities persist due to high debt, dependency on foreign financing, and continued austerity, leaving future generations exposed.

Present generation may feel only a pinch but future generations will be the one’s suffering for the mistakes of the present leaders of which Ranil Wickremasinghe holds the biggest blame & no one else. Simple Truth: Ranil gave us borrowed oxygen, not a cure. The crisis is still alive, only hidden for now.

Q19. Did Ranil protect Sri Lanka’s self-sufficiency and national interests?

A: No.

Policies under his tenure continued import dependence, did not strengthen agriculture or local industries, and allowed key assets to be privatized or leased. Strategic decisions often prioritized foreign interests over citizen welfare.

Q20. Did Ranil create lasting economic stability and transparency?

A: No.

Debt servicing, IMF conditionalities, and high-interest loans continued. Citizens saw higher taxes, reduced subsidies, and limited growth, while transparency in deals and privatizations remained low. The savior” label obscures that long-term vulnerabilities persist.

As a result of the $12.5 billion in ISBs issued during 2015–2019, Sri Lanka’s total foreign debt of around $37 billion now requires annual repayments of approximately $3–3.5 billion (principal plus interest) starting 2027. Following Ranil’s 2023 move to make the Central Bank independent, the CBSL now answers directly to the IMF rather than the Sri Lankan government. Although citizens fund its operations through taxes and deposits, the CBSL is legally bound to follow IMF directives and has no obligation to act with empathy toward the public. With a freely floating rupee, any depreciation increases the amount of local currency required to convert into dollars to meet these repayments, placing further strain on the national budget and citizens.

While some may credit Ranil Wickremesinghe for stepping in when Sri Lanka lacked leadership, this perception is misleading. He did not inherit an unknown crisis—he returned to carry forward a debt trap and economic collapse that he helped create during 2015–2019. His post-2022 leadership” managed short-term appearances and cash flow but did not resolve structural debt, restore sovereignty, or build sustainable economic foundations. In short, he provided only temporary relief, creating an artificial sense of public loyalty, while locking Sri Lanka further into IMF dependency.

Shenali D Waduge