Sri Lankans want change. They deserve continuity

By Mihir Sharma

For decades, power in Sri Lanka alternated between two main parties. The fact that there are now three candidates with a legitimate shot at victory in Saturday’s election underscores how thoroughly the old political system has fractured. The winner’s first task must be to maintain some semblance of stability.

Once a model of development, Sri Lanka has suffered a turbulent few years. In 2022, it fell into default for the first time thanks to some seriously questionable economic policies. Protests in Colombo forced the then-president out of office. His prime minister, Ranil Wickremesinghe, was eventually appointed his successor.

Wickremesinghe moved swiftly to stabilize the economy and reach an agreement with Sri Lanka’s lenders, including the International Monetary Fund. He can claim some success: Inflation declined to 1.3% in September 2023 compared to 69.8% a year earlier, while foreign exchange reserves rose to $3.1 billion, or over two months of imports, from $500 million during the crisis.

While the human cost has been high, and the economic turnaround is not complete, the relatively swift return of economic normalcy should logically make the incumbent the front-runner. Instead, the 75-year-old Wickremesinghe, who heads the venerable, center-right United National Party, is running an increasingly distant third.

As the US learned this year, voters don’t always look kindly on septuagenarians unwilling to leave the political scene. Wickremesinghe’s desire to hold onto power — he was first elected prime minister in 1993, but had never previously been president — has proved to be fatal for the UNP.

The question is whether the economy can survive his departure. His administration has built a platform for recovery and even growth. Even so, the country remains heavily indebted. Any fresh shock could tip it back over the edge.

The two leading candidates have cast themselves as change agents. The frontrunner, Sajith Premadasa, was long Wickremesinghe’s rival for power within the UNP and is the son of a former president. (Wickremesinghe is the nephew of another. Sri Lanka is a country with long-lived political dynasties.)

When he left the UNP in 2020, Premadasa seems to have taken most of its voters with him. Many worry he has also abandoned its economic liberalism. While he may not scupper the reform plan entirely, relations with the IMF will undoubtedly become more complicated if he wins.

His closest rival, Anura Kumara Dissanayake, heads the left-wing Janatha Vimukthi Peramuna party. He’s defined himself as an insurgent outsider, seeking to harness the energy of the anti-government protests of two years ago, and is running as the candidate of a coalition of parties and not of the JVP alone.

Typically for such makeovers, there is a dark past Dissanayake wants voters to overlook. The JVP platform is a classically Sri Lankan mixture of Maoism, ethnic supremacism, and economic populism. The island is dominated by the Sinhala ethnic group, and the left of its political spectrum has always had a tinge of Sinhala majoritarianism about it.

Dissanayake has sought to present himself as having moderated on economics and accepted the need to grow exports to pay for imports. But he has clearly sought the votes of those who blame Wickremesinghe’s reforms for a decline in living standards — when, in fact, the rise in poverty is largely due to scarring from the crisis, particularly the lingering effects of high inflation.

Certainly, political reform is important. Wickremesinghe has had a hard time pursuing accountability for past corruption since he depends for support on the parties and personalities who were in power before the crisis.

But the end point of any reform program must be the restoration of general prosperity and growth. Achieving that will require both political and policy stability. The country has already seen what instability and impulsiveness can deliver: The last crisis was entirely driven by ill-advised policy.

Sri Lanka has painstakingly managed this July to work out a preliminary deal on $12.6 billion of its total foreign debt of more than $40 billion. But that’s now been put in jeopardy, and investors are worried about the increased political uncertainty.

Without a good deal on debt, investment and growth will not return to the island, and living standards will remain depressed. That will only feed the cycle of anger and disillusionment that leads to political crises.

Sri Lanka’s new leaders must demonstrate they are more responsible than the old guard they revile. Otherwise, a presidential election that should bring years of turbulence to a close might precipitate a new crisis.