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Arvind Mohan

October 7th, 2024

Sri Lanka swipes Left in Landmark Presidential Election

0 comments | 6 shares

Estimated reading time: 10 minutes

Arvind Mohan

October 7th, 2024

Sri Lanka swipes Left in Landmark Presidential Election

0 comments | 6 shares

Estimated reading time: 10 minutes

The recent Presidential election in Sri Lanka has overturned the country’s historic relationship with political dynasties and ushered in a new political era at a time of serious economic crises and political legitimacy. As the parliamentary elections approach in mid-November, Arvind Mohan looks at the various challenges for President Anura Dissanayake.

 

On 23 September 2024, Sri Lanka’s Leftist leader Anura Kumara Dissanayake was sworn into office as the ninth President. The election was held after the island nation’s worst economic crisis after its independence in 1948.  Since the sovereign default in 2022, more than 25 per cent of the population has slipped back into poverty; unsurprisingly, citizens had been waiting patiently to democratically punish the political élites who led them to this dark alley. The Presidential election was their moment of judgment.

After more than half a century of its formation, the Janatha Vimukthi Peramuna (JVP; lit., People’s Liberation Front) has succeeded in being elected to power. Political parties and leaders seen close to the earlier government lost their credibility and the National People’s Power (NPP) coalition spearheaded by the JVP succeeded in filling the void. Not for the first time in its history, the JVP has staged a spectacular comeback: President Dissanayake won 42.3 per cent of votes after bagging just 3.8 per cent in the previous election. This success rides on the back of an impressive grassroots campaign, becoming the voice of disgruntled citizens, especially the unemployed youth clamouring for systemic change after the Aragalaya (People’s Struggle) in 2022.

Most citizens wanted a clear break from the ancien régime and a vote for the NPP was one against kleptocracy. The two main rival candidates, incumbent Ranil Wickremesinghe (who was the face of the unpopular International Monetary Fund (IMF) program) and Sajith Premadasa (who failed to distance himself enough from Wickremesinghe-led United National Party (UNP) policies and ideas) were tainted as establishment figures. They were representative of the old guard, culpable for the economic travails in different degrees and the subsequent political chaos.

As the Left party wins the national election for the first time in Sri Lanka’s democratic history, there are important political and economic repercussions.

Political Fallout

The JVP has a history of violent insurrections in 1971 and 1987–89 that were brutally crushed by the state; an estimated 40,000 people died and countless disappeared during the period 1987–91.

President Dissanayake has assured the electorate that the violent chapters in its history are now long in the past and that the party has embraced democratic politics for more than three decades. JVP’s rivals argued that the party’s moderation and non-violence is a smokescreen and, once in power, they would return to their radical/violent path. The voters clearly rejected this scaremongering; even as opponents warned of NPP’s lack of administrative experience, the voters were brave enough to test novelty.

Since its formation in 2019, the NPP has been careful not to box itself into an ideological corner. The party successfully crafted a broad coalition that channelled the widespread anger against the status quo cutting across ideological labels. NPP realised that its attraction to the voter owed to its message of change, not its ideological radicalism. In turn, the voters have demanded from the new President a recalibrated social contract between the rulers and the citizens, and not a violent revolution, especially since the upcoming parliamentary elections (slated for mid-November) will likely yield a divided house, forcing Dissanayake to govern by bargaining in a coalition government.

With the electoral decimation of the UNP, Sri Lanka Podujana Peramuna (Sri Lanka People’s Front (SLPP)) and the Sri Lanka Freedom Party (SLFP), the three traditional mainstream parties are now reduced to being  the smaller parties. Their future is difficult because winning back public trust after decades of perceived poor governance poses daunting challenges. The NPP and the Samagi Jana Balawegaya (SJB), both emerging as the dominant political forces, will intensify their rivalry considering they rely on similar social coalitions. Both parties will increasingly look to court the three main ethnic minority communities — North-East Tamils, Malaiyaha Tamils and Muslims, to widen their base.

Minorities in the country have been historically wary of the JVP due to its Sinhala-nationalist policies in the 1980s. The party held the view that ethnic issues should not be resolved by the devolution of power but by building a unitary socialist state. The JVP is yet to win over their trust as attested by votes in Tamil-dominant areas in the North-East where Premadasa had a clear lead over Dissanayake. While Dissanayake has vouched to hold elections to provincial councils in contrast to the party’s earlier position, the Tamil community’s plea for justice for war crimes and human rights violations committed by the armed forces during the Civil War are likely to remain unheeded. The JVP has recently toned down its Sinhala chauvinism but has not abandoned it. The quest for a political solution to the Tamil issue will be elusive under Dissanayake’s presidency.

Economic Challenges

Sri Lanka’s economic future hinges on how the new government handles the remaining two-and-half years IMF support program (ending 2026). The IMF program is unpopular among sections of the public.  The JVP had promised to make adjustments by assisting the vulnerable groups via increased direct cash transfers and cutting down taxes. President Dissanayake will not challenge the consensus among the majority of the political class regarding the necessity of the IMF Agreement. Most of the IMF-induced reform measures will be continued even if he tries to alleviate the bitter dose of austerity.

The IMF program is also supported by the United States, India and China, leaving Dissanayake with little geo-political leg room to renegotiate the bailout in its entirety. Given the precarious state of the economy, the NPP will look to revise the burden-sharing costs during the adjustment; it will not be adventurous enough to deviate from the basic structural conditions of the IMF program.

The JVP has kept its economic choices open and will not upset the apple cart. While the JVP traces its origins to Marxist ideology, the NPP manifesto did not promise a new anti-capitalist dawn. Dissanayake and his partners have substantially toned down their Marxist–Leninist talking points and repeatedly underlined the necessity to fight corruption and establish accountability in governance. Their manifesto emphasised boosting domestic production-based economic growth to improve the state revenue. The party has also not shied away from wooing businessmen in Colombo, demonstrating political tact and pragmatism.

The new President will enjoy a considerable degree of public trust and confidence; however, the challenges before him are onerous. Available forecasts for Sri Lanka’s economy project a growth rate between 2–4 per cent in 2024, a positive turnaround after the economic contraction in 2022, but modest by the standards of developing countries. Gross Domestic Product (GDP) is not expected to climb back to 2022 levels till at least 2027. Low growth will hinder achieving the IMF’s Debt Sustainability Analysis targets and prevent kickstarting public and private investment.

Sri Lanka also faces debt repayment risks in the medium term. Under the various deals with bilateral lenders like India and China, the island nation has relief on debt repayments until 2028. Financial institutions will keep their taps open during this period. Subsequently, the country is expected to resume borrowing from capital markets and fill up its foreign exchange coffins to pay debts. The window to bring about transformative growth is thus not too broad. Failure will result in another round of IMF programs and more painful austerity measures potentially sparking renewed unrest.

For the new administration, it is not enough to meet the stabilisation targets set out by the IMF program. In several of the 16 previous IMF programs these targets were achieved, yet they failed to usher in the structural transformation required by nurturing an outward-oriented economy that can deliver export growth. Returning to a fiscal deficit-fuelled growth path risks playing to the same script and will only defer another shock to the economy. Most of the structural transformation required to generate improved quality of high growth — such as a change in trade policy, improving tax to GDP ratio and more transparency in governance — is awaited.

The parliamentary elections are scheduled on 14 November and the NPP will require a working majority to implement policy changes. The patience of the electorate, who have suffered ample hardship, is running thin. The voters have played their party by rejecting the country’s foremost political dynasties and have placed an outsider at the helm of the affairs. President Dissanayake has inherited the unenviable responsibility of correcting decades of economic mismanagement and turning a fresh leaf in the country’s chequered history.

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The views expressed here are those of the author and do not represent the views of the ‘South Asia @ LSE’ blog, the LSE South Asia Centre or the London School of Economics and Political Science. Please click here for our Comments Policy.

This blogpost may not be reposted by anyone without prior written consent of LSE South Asia Centre; please e-mail southasia@lse.ac.uk for permission.

Banner image © Chathura Anuradha Subasinghe, ‘Man waving Sri Lanka’s National Flag’, 2023, Unsplash.

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About the author

Arvind Mohan

Arvind Mohan completed his Masters in International Relations and Area Studies from Jawaharlal Nehru University, New Delhi, and is currently working as a geopolitical analyst with MitKat Advisory. His research interests include security dynamics and regional politics in South Asia.

Posted In: Sri Lanka

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