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What Sri Lanka reveals about the risks in emerging markets

A number of developing economies face growing pressure from soaring energy and food costs and a stronger US dollar

In a more optimistic era, the overthrow by Sri Lankans of a feckless government they blamed for their country’s economic collapse might have been called a Velvet Revolution. It began last Saturday when tens of thousands descended on the largest city Colombo and poured into public buildings, including President Gotabaya Rajapaksa’s official residence, amid chants of “Gota, go home”.

The president had fled for his safety, but in scenes reminiscent of many late 20th-century regime collapses, the crowds hunkered down in the palace, sitting behind the president’s desk, bathing in his pool, and showering in his bathrooms.

By week’s end Rajapaksa was indeed gone — first on a military jet to the Maldives, then to Singapore, from where he finally tendered his resignation via email. With the military showing restraint, by this Friday protesters were leaving the government buildings.

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