The year in Sri Lanka was dominated by a severe economic crisis which led the central bank to declare financial default for the first time in the country’s history. The crisis has generated a large popular movement against President Rajapaksa and the Prime Minister which, after months of massive street protests, led to the resignations of both. After much hesitation, the new government negotiated a program of financial
aid with the International Monetary Fund. However, many unknowns remained about the new President’s ability to introduce the reforms imposed by the international partners, and about the sacrifices that will be required of an already exhausted population.
Although the military has avoided openly entering politics, the use of violence by the security forces and the new government’s hard line towards the protesters placed great uncertainty over the future of Sri Lankan democracy. Colombo’s need for urgent
economic support has also led to a rapprochement with India, which has been the regional partner most willing to approve aid packages for the island-nation.
