Sri Lanka’s president has named a new prime minister, Ranil Wickremesinghe, a familiar face in the role, as the country’s economic crisis turns into a real political disaster and a violent conflagration between security forces, supporters of the current president and protesters demanding radical political and economic change.
Wickremesinghe returns to office after five previous terms as the country’s prime minister; he replaces former Prime Minister Mahinda Rajapaksa, who together with his brother President Gotabaya Rajapaksa oversaw the country’s economic collapse. Mahinda resigned last week amid increasingly violent protests, in which nine people were killed 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 around $50 billion in foreign loans, for the first time in its history as a independent nation. The last three years have seen successive blows to Sri Lanka’s foreign tourism sector – a series of church bombings in 2019, the Covid-19 pandemic and Russia’s invasion of Ukraine. – which previously brought in around $4.4 billion a year and was a leading economic driver. These crises, exacerbated by the Rajapaksa’s financial mismanagement, led to a critical shortage of goods, including milk, fuel, food and medicine, and prolonged power cuts, in turn leading to widespread protests and a spiral in political chaos.
The Rajapaksas are a political dynasty in Sri Lanka and their reach in government has been significant; in addition to Mahinda and Gotabaya, their brother served until April 4 as finance minister. Gotabaya, the president, fired his younger brother, Basil, and replaced other cabinet members at the time, but protesters and politicians were unimpressed; Udaya Gammanpila, leader of the Pivithuru Hela Urumaya party, wrote on Twitter that the change was reminiscent of “old wine in a new bottle”, according to Reuters.
Of course, Sri Lanka’s economic problems did not start with the current Rajapaksa government, as Alan Keenan of the International Crisis Group explained in an April article:
“Sri Lanka’s economic disaster has deep roots: the country has long lived beyond its means – borrowing too much and taxing too little – and producing below its potential. But the Rajapaksa administration’s gross negligence in economic matters since it came to power in November 2019 has greatly compounded the island’s chronic problems.
However, dynasty has been a big part of the problem since Mahinda was first elected president in 2005, as described in a 2018 New York Times article. Over the past decade, the country has taken out a number of loans, including about $5 billion from China. Through his so-called Belt and Road Initiative, China has invested in a number of infrastructure projects in more than 100 countries around the world; ostensibly, such projects would create jobs and, in the case of Sri Lanka, provide a port on a bustling trade route. However, as Ishak pointed out in his article, the Hambantota port project was ultimately handed over to China as collateral when the Sri Lankan government was unable to repay or renegotiate the loans – or carry out the project, due, at least in part, to rampant corruption.
Gotabaya was elected president in 2019 and the Rajapaksa dynasty was once again in charge; this meant more ambitious infrastructure projects, despite rising foreign debt and dwindling foreign exchange reserves to import essential goods, due to the lack of foreign income from tourism and other sectors. Gotabaya also cut taxes when he came to power, preventing the government from buying foreign currency reserves. To top it off, a 2021 ban on imported chemical fertilizers, which was intended to save those foreign exchange reserves, decimated the agricultural sector.
What resulted, Keenan writes, is “Sri Lanka’s worst economic crisis in nearly 75 years of independence.” The protests, he wrote in April, “have now turned into a national uprising”, despite the Rajapaksa government’s “reputation for political repression”. Protesters even forced Mahinda to flee his estate, Temple Trees, and hand in his resignation on Monday after trying to enter the compound.
Who is Ranil Wickremesinghe?
After half-hearted attempts to form a new government in April and amid growing threats to his rule, Gotabaya appointed Wickremesinghe to take over his brother’s office; he was sworn in on Thursday and was first prime minister in 1993, under President DB Wijetunga.
Wickremesinghe is the product of families with a long history of civil service and politics, dating back even before independence, as reported by Al Jazeera. A lawyer by training, Wickremesinghe is today the head of the United National Party of Sri Lanka and has held several government posts, including that of deputy minister of foreign affairs and minister of industry. In this post, Wickremesinghe has brought in foreign investors – perhaps a crucial selling point for his current appointment, as his connections with India and Western countries could help lift 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 to be quite close to the Rajapaksa clan despite his membership in the opposition party – even, according to some critics, protecting them when they lost power in 2015. Furthermore, Wickremesinghe was in charge during the 2019 Easter bombings – and claimed he was ‘out of the loop’ when it came to warnings about the attacks, which killed at least 250 people.
How can Sri Lanka get out of this crisis?
In the face of deepening economic crises, violent protests and entrenched government corruption, the future of the Sri Lankan government is murky at best. Currently, protesters are demanding that the remaining members of the Rajapaksa family – including Gotabaya, the president, whose office entrance protesters have occupied for a month – be removed from government. Many also see Wickremesinghe’s appointment as a slap in the face and emblematic of Gotabaya’s longstanding refusal to admit 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 huge task ahead of him if he is to lead the country out of its current crisis.
“Mr. Wickremesinghe must focus on both the political and economic dimensions of our governance crisis,” he told Vox via email. “Neglecting the political dimensions will undermine the economic.”
The main problem Wickremesinghe needs to tackle is getting help from the International Monetary Fund to buy basic commodities, Saravanamuttu said. The IMF can issue Rapid Financing Instruments, or RFIs, to countries in need of immediate assistance due to natural disaster or other forces beyond its control, but the situation in Sri Lanka falls outside the mandate. typical of an RFI. Finance Minister Ali Sabry, who replaced Basil Rajapaksa, formally requested IMF assistance in April and worked with the IMF to try to negotiate some sort of deal; However, as he said in an address to parliament earlier in May, any deal will be based on national debt restructuring and would take six months to implement.
But the economic and political crises are so deeply intertwined that, according to Saravanamuttu, resolving one would not alleviate the other; both of these issues need to be addressed for Sri Lanka to recover. “[Wickremesinghe] must ensure that we get the bridging financing and the agreement with the IMF, as well as cut the powers of the executive presidency and set a date for the resignation of Gotabaya Rajapaksa and for the abolition of the post of executive presidency, “said he declared. According to the Associated Press, Wickremesinghe is meeting with diplomats from Japan, the United States, the European Union, Germany, China and India to float the idea of an aid consortium to help bail out the country quickly, but the political dimensions have yet to be dealt with in depth.
So far, Gotabaya has expressed no intention of stepping down from his post and retains the broad executive powers instituted under his rule in October 2020; this includes the power to make a series of major appointments and to dissolve parliament at any time after halfway through its five-year term. Although Gotabaya has floated the idea of curtailing those powers and reiterated his intention to do so in an address to the nation on Wednesday, that has yet to move forward. Since Saturday he has retained his post and appointed four new ministers, all from his Sri Lankan Podujana Peramuna party, in a bid for stability until a new cabinet can be formed. A strict nationwide curfew imposed on Monday continues, as do orders for security services to shoot anyone suspected of involvement in vandalism or arson.
But protesters, both on the streets and online, are still demanding the resignation of Gotabaya, which Saravanamuttu says is crucial for the country’s future.
“The demands of the people are that the president leaves and not meeting them will be to the detriment of the country.”