In the heart of the Indian Ocean lies Sri Lanka, an island nation that withstood the test of time, enduring the scars of colonialism, civil unrest, and economic upheavals. Today, this country, home to 22 million souls, stands at a crucial juncture, grappling with a financial crisis that arguably surpasses all economic challenges it has faced since gaining independence in 1948.
The recent approval by the International Monetary Fund (IMF) of a $ 337 million disbursement is more than just a financial lifeline; it is a beacon of hope in these turbulent times.
Historically, Sri Lanka has been a nation of profound potential, often lauded for its intellectual prowess and innovative spirit. Marco Polo, the famed Italian explorer, once described it as “the best island of its size in the world”. Indeed, Sri Lanka’s strategic location has been both a blessing and a curse, attracting colonial powers and becoming a focal point in the geopolitical chess game of modern superpowers.
The IMF’s intervention, while crucial, is not a panacea for the deep-rooted issues plaguing the nation. Sri Lanka’s path to recovery is fraught with internal and external challenges. This is not merely a financial crisis; it is a crisis of governance, trust, and societal resilience.
Historical context
In examining Sri Lanka’s plight, one cannot ignore the historical context. In the period between 1505-1948, from the Portuguese and Dutch to the British, colonial powers exploited its resources, leaving a legacy of division and disenchantment. The post-independence era was equally tumultuous, with internal conflicts and economic mismanagement aggravating the situation. The recent pandemic and the resultant global economic downturn were the final straws that broke the camel’s back, pushing the nation into unprecedented economic despair.
The IMF’s recent decision to disburse $ 337 million is a testament to the critical role international stakeholders play in the nation’s stability. However, it is imperative to recognise that while foreign aid is necessary, it is insufficient. The need for robust internal reforms, transparent governance, and a reinvigoration of democratic principles cannot be overstated.
The international media rushed to Sri Lanka to cover the political and economic crisis in 2022. The news reporters landed in Colombo and spoke to anyone who they could get hold of. Many Sri Lankans became overnight superstars. However, no one is covering Sri Lanka’s story now that the country is back in business.
Sri Lanka has been accustomed to one-sided stories by global news agencies and the country’s lousy press has accumulated over the last 43 years. It’s a miracle that visitors and investors keep coming back to the country. This is an unexplainable phenomenon; Sri Lanka is remarkable!
Nearly 30 years of terrorism and civil war, courtesy of the LTTE, have crushed the country’s social fabric. The Janatha Vimukthi Peramuna (JVP), the Marxist party under slain leader Rohana Wijeweera, led two armed revolutions in 1971 and 1988/’89, which ended with over 60,000 being killed.
The assassinations of political leaders, journalists, political thinkers, academics, artists, and many more gave a reason for the mass migration of Sri Lankans to other lucrative destinations over the last 43 years. The diaspora of two million Sri Lankans is still the nation’s lifeblood, but most will not return.
My generation battled the hardest when the north and south were on fire during 1988/’89. That was an era when our bags were checked at schools for bombs, drills were held to safeguard lives from explosions, and we lived hearing the anti-Indian and Western imperialism narrative all our lives. Dead bodies were floating on rivers and charred bodies were on display.
Perhaps this is why Sri Lankans do not understand fear; even in the most difficult times, the countrymen find enough reasons to enjoy life.
Successive governments used brute force to crush rebellions and especially in ’88/’89, the paramilitary was also used in the south to annihilate the JVP. Ultimately, between 1983 and 2009, the country lost thousands of youth who could have contributed to the nation. The economic loss was catastrophic, but the loss of human lives comes above all. There is no justification for killing, irrespective of which side you are on.
If the colonial masters divided and conquered the people of the country, the politicians took that to extremes. I still see the scars of racism and religious disharmony and it could spike again next year in the election cycle.
Unprecedented challenges
Post-independence, Sri Lanka was a rich country. Today, all countries that were behind, including Singapore, Taiwan, India, China, Vietnam, and even Bangladesh, have passed Sri Lanka with a significant lead. Sri Lanka never lived up to its potential and probably never will. It requires serious leadership – not in one, but in all areas.
Most of my friends are in the C-suite in the corporate world and the challenges they are facing now are beyond comprehension. There will be a day when Sri Lanka has to open its borders to expatriates to work here to build the country just like the UAE, Qatar, KSA, and Singapore did. It’s inevitable. Sri Lanka needs enterprises that can create employment opportunities for the locals and invite expatriates to expand their talent pool. Donating aid and loans is the easiest thing to do for superpowers, but they do not have skin in the game. Sri Lanka does not need sympathy but requires empathy from the world.
The support for entrepreneurs in the country is abysmal and taxation for the sake of taxation is crippling every sector. Exporters are feeling the pressure with high energy cost, tax, and high costs of operation. While Sri Lanka is looking for new Foreign Direct Investment (FDI), we conveniently forget to protect the businesses we already have. Exporters are running on thin margins, and, more often, Sri Lanka’s advantage was the price. The apparel and technology sectors are in severe distress, given global dynamics and sector-specific challenges.
It’s understandable; the Treasury requires income to strengthen the economy and cannot differentiate taxation based on industries, but there is little or no dialogue taking place with the private sector to understand the challenges they are facing. Work pressure has become unbearable for many and some large corporations are finding ways to provide mental health support to employees. The chaos must be addressed collectively, but politics will overrule any hope of unity to solve the pressing problem.
Referendum on the nation’s future
Looking at the current political landscape, the upcoming Presidential Election is a pivotal moment for Sri Lanka. It is not just an election; it is a referendum on the nation’s future, its identity, and its place in the new global order.
The political arena is fragmented, with no clear frontrunner. President Ranil Wickremesinghe, despite his experience, does not lead in opinion polls. Opposition and Samagi Jana Balawegaya (SJB) Leader Sajith Premadasa maintains a core support base without any further gains, while the rise of JVP and National People’s Power (NPP) Leader Anura Kumara Dissanayake (AKD) signals a shift in the political dynamics.
AKD and the JVP are worth watching. Still, inexperienced first-timer/timers with a contrasting Marxist ideology in a political volcano like Sri Lanka are a case to ponder. Over the last year, AKD and the JVP have shown sound political maturity in understanding the gravity of geopolitics but shying away from spelling out the actual plan, if they have a concrete one.
Marxism, capitalism, liberalism, and socialism are mere words for people. Even the socialists become capitalists when in power. The human brain is engraved with anger, jealousy, greed, and disillusion. Usually, it’s difficult to be an idealist in a fractured world. There is little to choose between Wickremesinghe and Premadasa’s foreign and economic policy, but AKD is an unknown quantity. AKD’s real leadership challenge is to convince the hardcore JVP to have flexibility in their ideology to gain nearly seven million votes from his base of 418,000 in 2019.
Any presidential aspirant has to explain the following to the world and the country:
- A solution to the ethnic question and power devolution
- Economic reforms and national economic policy
- Foreign policy in a complex geopolitical power play
The answers to the above need public scrutiny and every statement from any presidential candidate should be held accountable. Since 1994, every presidential candidate promised so much and more often delivered the opposite.
This election, however, is about more than just selecting a leader. It is about charting a course for a nation to battle economic hardships and political instability. The people of Sri Lanka are yearning for change, stability, and a vision that transcends the myopic views of traditional politics.
The international community, particularly countries with strategic interests in the Indian Ocean, play a constructive role supporting Sri Lanka’s journey towards stability and prosperity. The stakes are high, not just for Sri Lanka but for the entire region. A stable, prosperous Sri Lanka is vital for the security and economic well-being of the Indo-Pacific area. The known international stakeholders – the US, China, Japan, and India – will have new competition in Sri Lanka. The Russian interest in Sri Lanka is gaining currency as well, with Putin seeking election next year.
I was in India presenting a paper on ‘The Power of the Indian Ocean’ last week. It was a meeting of diverse academic minds from the region. Most of my colleagues are sure of a third term for Indian Premier Narendra Modi in April/May. Even the pro-INDIA bloc colleagues are conceding silently on the inevitable after the latest assembly election result.
‘Bharath Matha’ is the game’s name and emotionally-charged Indians will be lured unless the Rahul Gandhi-led bloc has something special. Furthermore, Bangladesh and Taiwan going for polls in January, with Sri Lanka’s elections in the latter part of 2024 (likely in August/September) will make for an interesting election year in Asia.
As we look towards the future, it is clear that money alone cannot heal the wounds of this nation. Sri Lanka requires a holistic approach that addresses its economic woes while healing its social fabric. The road ahead is arduous, and the solutions are complex. But one thing is sure: the resilience and spirit of the Sri Lankan people are indomitable.
Will Ranil run?
Last week, I wrote that President Wickremesinghe’s best bet is to go for a Presidential Election first, followed by a snap Parliamentary Election. I will be surprised if this is not the case. Moreover, with power in hand, he is a dangerous proposition.
He could provide relief to the masses starting in March 2024. The April public sector salary increase and increased net of welfare benefits will change the complexion of the presidential race. The Rs. 10,000 monthly income increase may not be big for my readers, but imagine a 20% salary increment? Wickremesinghe will ensure money is credited to bank accounts just before the Presidential Election.
Many predicted that Wickremesinghe would not run again. If you see him shaking hands with more global leaders in the next three months, that indicates that he is running. He has had more than seven lives in politics – bruised, battered, betrayed – and knows all angles of defeat. He has one more chance, this time with Executive power in hand.
The first campaign salvo was done at the Professor Stanley Wijesundera Memorial. Prof. Wijesundera, an Oxford alumnus, was the first Chancellor of the University of Colombo from 1979 to 1989. During the rebellion, the JVP ordered him to shut down the university, an order he steadfastly refused. Refusal was not taken lightly and he was gunned down in the library room on 8 March 1989.
Wijesundera was the brother-in-law of the late Upali Wijewardene. Not only was he a great product of Ceylon/Sri Lanka, he was also a loving father to four children.
Wickremesinghe went down memory lane and reminded the audience what it was like in ’88/’89. State media ran the story and finally it did rounds on digital media. Afterward, the anti-JVP media started the digital media attacks with chilling narratives against the JVP.
One man will have significant influence in stopping AKD. He is Kumar Gunaratnam (KG). Watch him. His stakes will be high in the Presidential Election. He is silent now, but he knows too much about AKD and the JVP. Also, KG has a score to settle with his much-junior AKD. Contrary to popular belief, AKD was never part of the ’88/’89 armed struggle, and his headache will be to defend something he was not part of, actively.
Politics is a blood sport and not for the faint-hearted.
If it’s a three-horse race between Wickremesinghe, Premadasa, and AKD, Sri Lanka will have a second vote count for the first time. If it’s a two-horse race between Wickremesinghe and AKD, it will be an exciting battle of contrasting ideologies, social class, economic and foreign policy, reforms, nepotism, corruption, a 75-year-old vs. a 55-year-old, and a contest of extreme power play.
Should Premadasa exit the race? Well, he can’t do that! In his words, he is a fighter. He stood against Wickremesinghe to form the SJB; he has shown patches of brilliance in the last month with fiery oratory. To Premadasa’s credit, except for three defections, he has held this parliamentary bloc together, but calculative moves are in place to frustrate Premadasa from running. Young Premadada is not Ranasinghe Premadasa, the risk taker, fearless street fighter, and Chanakya. Wickremesinghe knows the distinctions between father and son well. It will be an interesting political play to watch in the coming months.
However, scanning the digital media conversations, AKD is the most famous political brand in the country. He resonates well with the public and, importantly, the youth. AKD’s strength is that he has more credible messengers around him, while Wickremesinghe and Premadasa are confined to ‘one-man shows’.
In contrast, in India, Modi has taken a back step, and the team of Shah, Jaishankar, Sitharaman, Irani, Gadkari, Goyal, and even young Scindia is formidable. Person for person, the BJP won hands down compared to Gandhi’s inner circle. Wickremesinghe and Premadasa don’t have the same luxury as Modi, but the AKD team’s fine oratory skills are relatable and palpable to the masses. Whether team AKD can match fiery oratory to execution of policies and reforms for the benefit of the people will be key.
‘Stability man’
The next Presidential Election will be about the ‘stability man’. Who will be the stability man for Sri Lanka? Will that be Wickremesinghe, Premadasa, or rising star AKD? Or can an outlier like Dilith Jayaweera (Mawbima Janatha Pakshaya [MJP] Leader) be the ‘stability man’?
Sri Lanka stands at a crossroads, facing choices that will define its future. The upcoming Presidential Election is more than just a political contest; it is a moment of truth for a nation striving to reclaim its place in the world.
As Marco Polo observed, this is indeed the best island of its size. Now, it is up to the people of Sri Lanka to prove that they can overcome the challenges and fulfil the promise of their nation. The eyes of the world are watching and history awaits the outcome of this critical juncture in Sri Lanka’s storied journey.
Who is your ‘stability man’?