Family Ties Led to Sri Lanka's Collapse. What Does This Mean for South Asia?

Sri Lanka, once known as the “Pearl of the Indian Ocean,” is today a failed state in South Asia. Commentators have asserted a wide range of perspectives about the reasons for its failure. Some blame external forces such as debt and geopolitics, while others point out internal factors such as government mismanagement and inefficiency. These analyses underappreciate one of the core factors underlying this catastrophe: “familycracy,” or a system of government in which one or several families continuously or by turn hold all the political, economic, social, and military power of a state. Family kinship becomes the only criterion for advancement to the top of the socio-political hierarchy.

In Sri Lanka, for decades, only a few families have controlled wealth and political power. This tradition has created a vicious cycle in which political parties and all other functioning institutions serve primarily the interest of these families and not the state. Elections have become a process of handing power from one family to another, with succession tightly controlled.

Booted out in the crisis, the most recent family to hold power were the Rajapaksas. The Rajapaksa family regime spanned nearly fifteen years from 2005 to 2022, briefly interrupted from 2015 to 2019. The family first came to power in 2005 when Mahinda Rajapaksa won the presidency by projecting himself as an ordinary man from the rural south—a stark contrast to the metropolitan, westernized political elite then in Colombo.

Soon after winning the presidency, Mahinda Rajapaksa gained popularity through eliminating the militant Tamil separatist group, the Liberation Tigers of Tamil Eelam (LTTE), effectively ending the Sri Lankan Civil War in 2009 after nearly thirty years of conflict. As a decades-long issue for the Sinhalese-majority population, the end of the war increased the Rajapaksa family’s popularity but drained the Sri Lankan economy. Mahinda Rajapaksa’s brutal tactics in war, including war crimes and gross violations of human rights, also resulted in Sri Lanka’s being shunned by the world. For example, Western investors withdrew from their commitments to invest in the Sri Lankan apparel and tech industries. With the loss of such traditional investors, the Rajapaksa regime turned to China as their last resort, preferring Chinese soft loans for tourism and infrastructure that resulted in quick development over Western investment in human capital and the tech industry. These soft loans in turn harmed the economy but ensured family profit. 

As a result of Sri Lanka’s weak economy, the family recognized that winning the support of the armed forces would be crucial to maintaining power in the years following the end of the war. The Rajapaksa government thus incentivized the military by allocating a disproportionate share of government spending to the armed forces. By 2014, the Rajapaksa government was allocating 13.51 percent of its total spending to the military, one of the highest peacetime percentages in the world.

Despite losing power in 2015 to President Maithiripala Sirisena, who also came from an elite family, the Rajapaksa family regained the presidency after Islamist terrorists bombed three churches in 2019. In their response to these bombings, the family successfully portrayed themselves as strong leaders capable of maintaining law and order. Once they regained power, they appointed several family members to crucial government positions without justifying their credentials. At one point, more than forty Rajapaksa family members held top government positions, including the presidency, the prime ministership, and a number of chief ministerial positions.

The Rajapaksa family’s way of accumulating wealth and power turned the country into virtually a family enterprise. As a developing nation, Sri Lanka should have prioritized investment in human capital and heavy industry. Instead, in order to maintain power, Rajapaksa brothers Mahinda and Gotabaya prioritized short-term, quick-fix initiatives and disregarded long-term strategic planning. They focused their energy on building visible, physical infrastructure such as ports and cities to showcase tangible development to their citizens. The largest of these projects were intended to profit their hometown, their core political supporters, and their family business, and are commonly cited as a cause of Sri Lanka’s bankruptcy. The brothers used excessive loans from external sources to fund these failed mega projects, including Hambantota Port, which was primarily funded by Chinese loans. Constructed with foreign loans obtained at high interest rates, the port failed to generate sufficient revenue to match its debt obligations. Furthermore, nepotism bred inefficiency in the Sri Lankan government. Ministers appointed based on family ties rather than merit made numerous poor decisions, one of which resulted in a fertilizer crisis for farmers and ultimately caused a food shortage this year. In addition to addressing the food shortage, Colombo has now had to use a big chunk of its foreign reserves to tackle the global fuel and essential commodity crises.

Sri Lanka’s current economic crisis is thus a wake-up call for all nations in South Asia. Two countries in particular—Bangladesh and Pakistan—have similar trends of “familycratic” democracy while India is still grappling with the after-effects of “familycracy” politics.

Bangladesh, a country of 165 million people and fertile land with a long coast along the Bay of Bengal, has much potential to become a prosperous nation. However, a decades-long power struggle between two dynastic families—the Sheikhs and the Zias—has stymied Bangladesh in reaching the status of a middle-income country. Like the Rajapaksas in Sri Lanka, the Sheikh and Zia families have made Bangladesh’s two leading political parties, the Bangladesh Awani League and the Bangladesh Nationalist Party, their personal family property. These two families agree only that state power should remain in their hands, leading to their failure to ensure free and fair elections. This decades-long political impasse has resulted in the stagnation of development and the destruction of the meritocracy, in essence hindering Bangladesh’s nation-building process.

The situation in Pakistan is even more dire. Pakistan has followed the same trend of family dynastic rule relying on excessive loans. Three families—the Bhuttos, the Sharifs, and the Zandaris—have together ruled throughout most of Pakistan’s history. Like the Rajapaksas, they forge ties with Pakistan’s armed forces rather than its citizens and seek external loans for use on visible, physical development rather than human capital or nation-building. In addition, the military’s control over civil politics has turned the country into rule by vested quarters, including political elites, dynastic families, and the military. Pakistan has already experienced a severe economic crisis, and the ousting of Imran Khan, the only prime minister of non-dynastic family origin, has opened the door for another family dynasty to take power.

India, on the other hand, has barely escaped the “familycracy” trap. Before the Bharatiya Janata Party’s (BJP) Prime Minister Narendra Modi took power, the leading Congress Party was under the decades-long control of the Nehru-Gandhi family. In fact, a crucial element of Modi’s popularity is that he rose to the highest office in the country without family connections. However, the Gandhi dynasty’s grip on the Congress Party continues to have effects—the heir apparent today is Jawaharlal Nehru’s unpopular great grandson Rahul Gandhi whose dominance in the party has obstructed the rise of a viable Indian opposition figure who could stand as an alternative to Modi’s brand of Hindu nationalism.

In sum, “familycracy” is a common pattern across South Asia, and the Sri Lankan people are paying its high price. Now is the moment for other South Asian nations to learn from the Sri Lankan crisis and reverse their course or face a similar catastrophe.