Unravelling the Financial Crisis of Sri Lanka: Exploring Policy Blunders
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Author: Candauda Arachchige Saliya
Author Address: Professor, SLIIT Business School, Sri Lanka Institute of Information Technology, Malabe (Sri Lanka)
Keywords: Autocratic rule, corruption, economic reforms, naïve rulers.
JEL Codes: D01, F45, F59, G10, G28, G38.
Abstract
This study explored the political-economic turmoil in Sri Lanka, with a focus on policy implementation. It delved into the dynamics of autocratic governance and elite control within the country's extractive systems, which had evolved over decades. Employing a case study methodology using data from authenticated published sources, this research unveiled how ill-conceived policies, orchestrated by China-backed politicians and naïve administrators, primarily triggered the economic crisis. Mismanagement, policy missteps, and corruption fueled widespread social unrest and protests, culminating in the economic downturn. These policy blunders include tax reductions, bans on fertilizer and agrochemical imports, excessive currency printing, and exchange rate manipulation.
Description
Indian J Econ Dev, 2025, 21(1), 40-47
https://doi.org/10.35716/IJED-23454