Sri Lanka’s Political-Economic Crisis: Corruption, Abuse of Power, and Economic Crime
Connections Between Political Instability and Financial Misdeeds
Background
The island nation of Sri Lanka has been experiencing a severe political and economic crisis characterized by rampant corruption, abuse of power, and economic crime. Asanga Abeyagoonasekera’s new research, published in the Journal of Financial Crime, sheds light on the root causes of this crisis and its far-reaching implications.
Research Overview
Abeyagoonasekera explores the connection between Sri Lanka’s political-economic crisis and the deeply entrenched culture of corruption. The study delves into the autocratic rule, elite dominance of state extractive systems, and how these factors have contributed to the country’s downfall.
Recent Developments in Sri Lanka
Political Dynamics
In recent years, the situation in Sri Lanka worsened under the leadership of Gotabaya Rajapaksa, who introduced a centralization of power, reduced competitive modes, and shifted towards a monopolistic corruption structure. This led to the first family and military rule becoming the center of power, with powerful elites supporting the authoritarian model.
Case Studies and Findings
Abeyagoonasekera presents five case studies investigating political misdeeds and their implications on economic crime. The research employs qualitative analysis using secondary data and, in one case, quantitative data. Primary data was captured through field research to further examine political and social analyses.
Insider Trading
One case study focuses on insider trading. The study examines how political connections played a significant role in these incidents and how they contributed to the economic crisis.
Impact of Political Instability on Economic Crime
Corruption and the Autocratic Model
The research reveals how Sri Lanka’s autocratic political model has failed to combat corruption effectively, leading to the country’s economic crisis. Transnational mechanisms aimed at addressing corruption had limited impact due to a lack of commitment to combating corruption within the country.
External Influence
External forces, such as China’s involvement in Sri Lanka, have also contributed to elite capture and the political instability. However, the study’s scope is limited, addressing only one external factor.
Limitations and Recommendations
While the study offers crucial insights, it still has some limitations. These include:
- A narrow focus on only five case studies
- The need for a more extensive analysis of transnational mechanisms
- Limited access to primary data under the heavy autocratic regime in Sri Lanka
Despite the limitations, Abeyagoonasekera’s research is valuable to an international audience. The study provides recommendations for transnational mechanisms to address corruption effectively and offers solutions for the Sri Lankan crisis.
Conclusion
Economic crime is a significant factor driving poverty and economic crises. The case of Sri Lanka serves as a cautionary tale for many developing nations facing similar issues. Understanding the connections between corruption, political instability, and economic crime is essential in addressing these challenges and fostering sustainable and prosperous societies.