Who would have thought that out of all the political parties in the country, it would be the National People’s Power (NPP) with its Marxist background that would ultimately capitulate to the Western agenda artfully executed through the International Monetary Fund (IMF)? The great NPP turnaround that has taken less than a year is remarkable, given that about this time last year the party was as anti-IMF as it could possibly get. Yet, here we are.

With each passing week, it is becoming increasingly evident that the NPP is learning – often the hard way – that governing is far more complex than protesting. The bold confidence and ideological rigidity that defined its years in Opposition are now being tempered by the cold arithmetic of economic management and the constraints of global financial realpolitik. In its struggle to transition from protest politics to practical governance, the NPP has found itself doing the very things it condemned.

This transformation is perhaps most striking in the NPP’s complete volte-face on the IMF. For decades, the Janatha Vimukthi Peramuna (JVP), the ideological parent of the NPP, maintained a steadfastly anti-IMF stance. Its leaders castigated the fund as a tool of Western imperialism and financial colonisation. Rallies, leaflets, and fiery speeches all painted the IMF as the villain of Sri Lanka’s economic narrative. But today, that narrative has been dramatically rewritten. The once-maligned institution is now an indispensable partner. Senior NPP MPs, with no hint of irony, proudly declare that the Government will follow the IMF programme to the letter, even as it heaps burden after burden on the people. In just the past couple of weeks, electricity, fuel, and even milk powder prices have shot up.

What is apparent is that the NPP/JVP’s transformation no longer amounts to a subtle policy shift; it is a complete ideological inversion. So much so that one is tempted to ask whether the NPP has outsourced economic policy to the IMF altogether. The fund’s directives now shape fiscal decisions, legislative priorities, and institutional reforms. In its last review, the IMF even reminds the Government of Sri Lanka that pending legislative bills on Public-Private Partnerships (PPPs), State-Owned Enterprises (SOEs), and public asset management must conform to the Public Financial Management (PFM) Act which was passed into law last August as a structural benchmark of the IMF bailout package.

That a global financial institution is not only suggesting but dictating the shape and consistency of domestic legislation is both revealing and troubling. What is even more disturbing is that a party which once found such interventions intolerable now embraces them without question. Where once the JVP would have been on the streets decrying foreign meddling, today the NPP quietly complies. The silence is deafening.

The PFM Act is not without merit. It was the last piece of legislation enacted under the Ranil Wickremesinghe presidency and was designed to replace outdated financial regulations and introduce modern principles of budgeting, expenditure control, debt management, and reporting. It mandates medium-term fiscal planning, enforces results-based spending, and enhances parliamentary oversight. Ministries and agencies are now required to meet performance benchmarks and submit accurate, timely data. These are positive reforms and certainly the way forward.

But context is everything. When such reforms are driven not by domestic initiative but by external pressure and when they are coupled with conditions that reduce the State’s ability to support its own economy, the result is not empowerment but subjugation. The PFM Act may promote transparency, but it is also the scaffolding on which the IMF’s economic restructuring programme is being built, the full weight of which has been thrust on the emaciated shoulders of the long-suffering public.

The IMF’s approach to Sri Lanka is not merely one of fiscal consolidation. It is also a blueprint for asset liquidation. At least that is what the NPP/JVP proclaimed while in Opposition. Be that as it may, now, more than ever, it appears that under the guise of reforms, the country is being primed for the sale of its national assets while austerity measures ranging from aggressive tax hikes to spending cuts are crippling local businesses and shrinking demand. While growth stagnates and asset values decline, foreign entities are smacking their lips, ready to swoop in.

It is in fact the NPP/JVP that during the past 16 IMF interventions consistently claimed that the programmes were not designed for recovery, but rather economic strip-mining. Now, it all seems to be making sense: the IMF loans funds to a distressed economy, imposes structural reforms that undermine local enterprises, and creates a climate where vital public assets become undervalued. These assets, from ports to airports to utilities like the Ceylon Electricity Board, transportation hubs, and even critical industries, are then sold off, often to buyers with links to the very institution providing the bailout. The result is a hollowed-out economy where strategic sectors become foreign-owned. To the credit of the NPP, even former President Wickremesinghe saw no danger in the ‘robber barons’ swooping in. 

What has got tongues wagging is that the current regime is not merely complicit in the IMF-inspired scheme of things, it is even enthusiastic. Gone is the ideological fire that once railed against capitalist exploitation. In its place is a technocratic coolness that speaks the language of fiscal targets and investment climate improvement. Today, the Government celebrates the IMF’s praise in its Fourth Review, touts the passage of reforms, and boasts of adherence to conditionalities, seemingly unaware or unwilling to acknowledge the consequences of such compliance. The party that for the longest time frowned on what it described as ‘crony capitalism’ appears to have put it on steroids. The cruel irony is that the NPP, which built its political identity on opposing such exploitation, now finds itself administering it.

Of course, the Government will argue that these measures are necessary. It will point to the fiscal wreckage inherited from past regimes and the dire need for reform. While that remains a valid point, reform should not come at the cost of sovereignty. Recovery should not entail surrender.

The NPP, while relatively new at the job, must get used to shedding its deference and reassert national interests in its dealings with the IMF. Hardball negotiations must replace blind compliance. Every country that has undergone an IMF programme has had the option to negotiate terms that reflect local priorities, and many have done so with success. In fact, it is a primary election promise of the NPP, which it appears to have forgotten. It must keep in mind that Sri Lanka’s economic autonomy cannot and should not be compromised and is ultra vires its mandate.

It is in this backdrop that a new threat has emerged; one that threatens to undermine a key pillar of Sri Lanka’s export economy. Last week’s imposition of a 30% tariff on Sri Lankan exports to the United States on top of existing tariffs – estimated to be averaging around 16% – places a crushing 46% burden on exports bound for the US.

Apparel, which forms the backbone of Sri Lanka’s export sector, is particularly vulnerable. Unless the Government can urgently negotiate a significant reduction in these tariffs in the next two weeks ahead of the 1 August deadline for further negotiations, Sri Lankan goods run the risk of being priced out of the American market. No buyer will choose Sri Lankan products over cheaper alternatives from India, Vietnam, and the Philippines, which have secured better tariffs. 

Yet, amidst this looming threat, the Government has sought to project an air of euphoria, boasting that it secured a large concession while ignoring the bigger picture: that the country is losing its competitive edge – not only due to tariffs but also rising production costs through electricity and fuel price hikes, and, with it, thousands of jobs and livelihoods being put on the line. The threat is existential, and the response must be proportionate.

So where does all this leave the average Sri Lankan? Burdened by rising costs, diminished job security, and the looming prospect of foreign domination of national assets, the promise of real economic revival feels increasingly like a mirage. While public discourse is clouded by jargon like ‘fiscal consolidation,’ ‘debt sustainability,’ ‘structural reform,’ etc., the ground situation for the average citizen is more hardship and inequality.

The NPP came to power on the back of a historic mandate. It promised transformation, transparency, and sovereignty. It painted itself as the antidote to decades of corruption, mismanagement, and foreign dependency. If it is to live up to its promises, the path ahead demands courage, not compliance.