Sri Lanka is facing an economic and political crisis. Here's what you need to know

Protesters demand the resignation of Sri Lanka's President Gotabaya Rajapaksa in Colombo on April 4.

(CNN)Sri Lanka, an island nation of 22 million, is facing an economic and political crisis, with protesters taking to the streets in defiance of curfews and government ministers stepping down en masse.

Driving the discontent is the worst economic downturn since the South Asian country gained independence in 1948, with crippling inflation sending the cost of basic goods skyrocketing.
Anger, which has been simmering for weeks, boiled over last Thursday, turning protests violent -- and throwing the government into disorder.
    Here's what you need to know.

      What caused the economic crisis?

      Experts say the crisis has been years in the making, driven by a little bad luck and a lot of government mismanagement.
      Over the past decade, the Sri Lankan government has borrowed vast sums of money from foreign lenders to fund public services, said Murtaza Jafferjee, chair of Colombo-based think tank Advocata Institute.
        This borrowing spree has coincided with a series of hammer blows to the Sri Lankan economy, from both natural disasters -- such as heavy monsoons -- to man-made catastrophes, including a government ban on chemical fertilizers that decimated farmers' harvests.
        These problems were compounded in 2018, when the President's dismissal of the Prime Minister sparked a constitutional crisis; the following year, when hundreds of people at churches and luxury hotels were killed in the 2019 Easter bombings; and from 2020 onwards with the arrival of the Covid-19 pandemic.
        Facing a massive deficit, President Gotabaya Rajapaksa slashed taxes in a doomed attempt to stimulate the economy.
        But the move backfired, instead hitting government revenue. That prompted rating agencies to downgrade Sri Lanka to near default levels, meaning the country lost access to overseas markets.
        Sri Lanka then had to fall back on its foreign exchange reserves to pay off government debt, shrinking its reserves from $6.9 billion in 2018 to $2.2 billion this year. This impacted imports of fuel and other essentials, which sent prices soaring.
        Topping all that, the government in March floated the Sri Lankan rupee -- meaning its price was determined based on the demand and supply of foreign exchange markets.
        That move appeared aimed at devaluing the currency to qualify for a loan from the International Monetary Fund (IMF) and encourage remittances.
        However, the plunging of the rupee against the US dollar only made things worse for ordinary Sri Lankans.

        What does this mean for people on the ground?

        For Sri Lankans, the crisis has turned their daily lives into an endless cycle of waiting in lines for basic goods, many of which are being rationed.
        In recent weeks, shops have been forced to close because they can't run fridges, air conditioners or fans. Soldiers are stationed at gas stations to calm customers, who line up for hours in the searing heat to fill their tanks. Some people have even died waiting.
        One mother in the capital, Colombo, told CNN she was waiting for propane gas so that she could cook meals for her family. Others say the cost of bread has more than doubled, while auto rickshaw and taxi drivers say the fuel rations are too meager to make a living.
        Some are caught in an impossible position -- they have to work to feed their families, but must also queue for supplies. One street sweeper with two young sons told CNN she quietly slips away from work to join lines for food, before hurrying back.