Sri Lanka’s President has appointed a new Prime Minister, Ranil Wickremesinghe, a familiar face in the role, as the country’s economic crisis spirals into a full-blown political catastrophe and a violent conflagration between security forces, supporters of the current President and protesters demanding radical political and economic changes.
Wickremesinghe returns to power after five previous terms as country’s Prime Minister; He replaces former Prime Minister Mahinda Rajapaksa, who along with his brother President Gotabaya Rajapaksa oversaw the country’s economic meltdown. Mahinda resigned last week amid increasingly violent protests that have left nine dead and more than three hundred injured, according to Reuters.
As Vox’s Natasha Ishak explained in April, Sri Lanka’s economy is in shambles, largely due to the country defaulting on about $50 billion worth of foreign loans for the first time in its history as an independent nation . Over the past three years, Sri Lanka’s foreign tourism sector has been hit on and off – a spate of church bombings in 2019, the Covid-19 pandemic and Russia’s invasion of Ukraine – which previously cost about US$4.4 billion annually. dollars and was a leading economic engine. These crises, exacerbated by the Rajapaksa’s financial mismanagement, have led to critical shortages of commodities such as milk, fuel, food and medicines, as well as widespread power outages – which in turn have led to widespread protests and a spiral into political chaos.
The Rajapaksas are a political dynasty in Sri Lanka and their reach in government was considerable; alongside Mahinda and Gotabaya, her brother served as finance minister until April 4. Gotabaya, the President, fired his younger brother Basil, and replaced other cabinet officials at the time, but protesters and politicians alike were unimpressed; Udaya Gammanpila, leader of the Pivithuru Hela Urumaya party, wrote on Twitter that the switch is reminiscent of “old wine in a new bottle,” according to Reuters.
Of course, Sri Lanka’s economic troubles did not begin with the current Rajapaksa government, as Alan Keenan of the International Crisis Group explained in an April article:
“Sri Lanka’s economic catastrophe has deep roots: the country has long lived beyond its means – borrowed too much and taxed too little – and produced below its potential. But the Rajapaksa government’s gross negligence in economic affairs since taking office in November 2019 has greatly exacerbated the island’s chronic problems.”
Dynasty, however, has been a big part of the problem since Mahinda was first elected president in 2005, according to a 2018 New York Times article. Over the past decade, the country has taken on a number of loans, including about $5 billion from China. Through his so-called Belt and Road Initiative, China has invested in a series of infrastructure projects in more than 100 countries around the world; Allegedly, such projects would both create jobs and, in the case of Sri Lanka, create a port on a busy trade route. However, as Ishak pointed out in her article, the Hambantota port project was eventually turned over to China as collateral when the Sri Lankan government was unable to repay or renegotiate the loans – or complete the project successfully, at least in part because of rampant growth Corruption.
Gotabaya was elected president in 2019 and the Rajapaksa dynasty was in power again; That meant more ambitious infrastructure projects despite mounting foreign debt and dwindling foreign exchange reserves for importing essential goods due to a lack of foreign revenue from tourism and other sectors. Gotabaya also cut taxes when he came to power and prevented the government from buying foreign exchange reserves. On top of that, a chemical fertilizer import ban introduced in 2021, intended to save these foreign exchange reserves, decimated the agricultural sector.
The result, Keenan writes, was “Sri Lanka’s worst economic crisis in nearly 75 years of independence.” The protests, he wrote in April, “have now turned into a nationwide uprising,” despite the Rajapaksa government’s “call for political repression.” Protesters even forced Mahinda to flee his Temple Trees estate and hand in his resignation on Monday after attempting to breach the compound.
Who is Ranil Wickremesinghe?
After half-hearted attempts to form a new government in April, and amid mounting threats to his rule, Gotabaya appointed Wickremesinghe to take over his brother’s office; He was sworn in on Thursday and first served as prime minister under President DB Wijetunga in 1993.
As Al Jazeera reports, Wickremesinghe is the product of families long active in the civil service and political class, even before independence. Trained as a lawyer, Wickremesinghe is now the leader of the United National Party of Sri Lanka and has held several government posts including Deputy Foreign Minister and Minister for Industry. In that post, Wickremesinghe brought in foreign investors – perhaps a key selling point for his current appointment as his ties with India and Western countries could help negotiate Sri Lanka out of its current economic turmoil.
However, as the BBC points out, Wickremesinghe has never served a full term as prime minister and is seen as fairly close to the Rajapaksa clan despite being in the opposition party – some critics even say he was protective of them when they lost power in 2015 Additionally, Wickremesinghe was in office during the 2019 Easter bombings – and claimed he was “not up to speed” on warnings about the attacks, which killed at least 250 people.
How can Sri Lanka get out of this crisis?
Amid deepening economic crises, violent protests and entrenched government corruption, the future of the Sri Lankan government is bleak at best. Protesters are now demanding that Rajapaksa’s remaining family members – including Gotabaya, the president whose office entrance has been occupied by protesters for a month – be removed from government. Many also see Wickremesinghe’s appointment as a slap in the face and symbolic of Gotabaya’s longstanding refusal to acknowledge his government’s role in the crisis.
According to Paikiasothy Saravanamuttu, executive director of the Center for Policy Alternatives, a Colombo-based think tank, Wickremesinghe has a daunting task ahead of him if he is to lead the country out of its current crisis.
“Mr. Wickremesinghe needs to focus on both the political and economic dimensions of our government crisis,” he told Vox via email. “Neglecting the political dimensions will undermine the economic one.”
Chief among the issues Wickremesinghe needs to address is securing support from the International Monetary Fund for basic commodities purchases, Saravanamuttu said. The IMF may issue Rapid Financing Instruments (RFIs) to countries in need of immediate assistance due to natural disasters or other forces beyond its control, but Sri Lanka’s circumstances fall outside the typical remit of an RFI. Finance Minister Ali Sabry, replacing Basil Rajapaksa, formally requested IMF assistance in April and is working with the IMF to try to negotiate some sort of arrangement; However, as he said in an address to parliament in early May, any agreement will be based on the restructuring of the country’s debt and will take six months to kick-start.
But the economic and political crises are so closely intertwined that, Saravanamuttu said, resolving one would not alleviate the other; Both issues must be addressed for Sri Lanka to recover. “[Wickremesinghe] must ensure we get the bridge funding and the deal with the IMF, as well as trim the Executive Presidency’s powers and set a date for Gotabaya Rajapaksa’s resignation and the abolition of the Executive Presidency office,” he said. According to the Associated Press, Wickremesinghe is meeting with diplomats from Japan, the US, the European Union, Germany, China and India to float the idea of an aid consortium to bail out the country quickly, but the political dimensions are yet to be tackled significantly .
To date, Gotabaya has indicated no intention to step down and retains the sweeping executive powers introduced under his rule in October 2020; These include the power to make a number of important appointments and to dissolve Parliament at any time halfway through its five-year term. Although Gotabaya has raised the idea of curtailing those powers and reiterated his intention to do so in a speech to the nation on Wednesday, it has yet to move forward. As of Saturday, he remains in office and appointed four new cabinet ministers, all from his Sri Lankan party, Podujana Peramuna, to bring stability until a new cabinet can be formed. A strict nationwide curfew imposed on Monday continues, as do orders for security services to shoot on site anyone suspected of involvement in acts of vandalism or arson.
But protesters, both on the streets and online, are still demanding Gotabaya’s resignation, which Saravanamuttu says is vital to the country’s future.
“The demands of the people are for the President to go and if he doesn’t address that, it will hurt the country.”