The President of Sri Lanka has appointed a new Prime Minister, Ranil Wickremesinghe, a familiar face in the role, as the country’s economic crisis turns into a full-blown political disaster and violent fire between security forces, supporters of the current president and protesters demanding radical political and economic change.
Wickremesinghe returns to the office after five previous stints as the country’s prime minister; he replaces former Prime Minister Mahinda Rajapaksa, who, along with his brother President Gotabaya Rajapaksa, oversaw the country’s economic collapse. Mahinda resigned last week amid increasingly violent protests, killing nine people and injuring more than three hundredaccording to Reuters.
As cafemadrid’s Natasha Ishak explained in April, Sri Lanka’s economy is in shambles, largely due to the country defaulting on about $50 billion in foreign loans for the first time in its history as an independent nation. Over the past three years, there have been consecutive hits to Sri Lanka’s foreign tourism sector – a series of church bombings in 2019, the Covid-19 pandemic and the Russian invasion of Ukraine – which previously brought in about $4.4 billion a year and a leading economic engine. Those crises, exacerbated by the Rajapaksa’s financial mismanagement, have led to a critical shortage of goods, including milk, fuel, food and medicine, and prolonged power cuts – which in turn led to widespread protests and political chaos.
The Rajapaksas are a political dynasty in Sri Lanka and their reach in government has been considerable; next to Mahinda and Gotabaya, their brother served as finance minister until April 4.† Gotabaya, the president, has fired his younger brother Basil. and replaced other cabinet officials at the time, but protesters and politicians were unimpressed; Udaya Gammanpila, head of the Pivithuru Hela Urumaya party, wrote on Twitter that the switch 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, such as the International Crisis Group Alan Keenan explained in an April piece†
“Sri Lanka’s economic disaster 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 gross negligence of the Rajapaksa government on the economic front since it came to power in November 2019 has significantly exacerbated the island’s chronic problems.”
However, the dynasty has been a big part of the problem since Mahinda was first elected president in 2005, as a 2018 piece of the New York Times describes:† Over the past decade, the country has taken out a number of loans, including about $5 billion from China. Due to its so-called Belt and Road Initiative has China invested in a number of infrastructure projects in more than 100 countries around the world; ostensibly, such projects would both create jobs and, in the case of Sri Lanka, a port on a busy trade route. However, as Ishak noted in her piece, the Hambantota port project eventually became transferred to China as collateral when the Sri Lankan government was unable to repay or renegotiate the loans — or successfully complete the project, at least in part because of rampant corruption.
Gotabaya was elected president in 2019 and the Rajapaksa dynasty was once again in charge; that meant more ambitious infrastructure projects, despite rising foreign debt and declining 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, hampering the government’s ability to buy up foreign exchange reserves. In addition, a 2021 ban on imported chemical fertilizers designed to conserve those foreign exchange reserves has decimated the agricultural sector.
What has 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 nationwide uprising”, despite the “reputation of the government in Rajapaksa for political repression”. Protesters even forced Mahinda to flee his estateTemple Trees, and resigned on Monday after trying to breach the compound.
Who is Ranil Wickremesinghe?
After half-hearted efforts 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 in 1993, under President DB Wijetunga.
Wickremesinghe is the product of families who have long been active in the civil service and in the political class, even before independence, as Al Jazeera reports. Trained as a lawyer, Wickremesinghe is now the head of the United National Party of Sri Lanka and has held various government positions including Deputy Foreign Minister and Industry Minister. In that position, Wickremesinghe brought in foreign investors – perhaps a crucial selling point for his current appointment, as his relations with India and western countries could help lift Sri Lanka out of the current economic turmoil.
However, as the BBC points outWickremesinghe has never served a full term as prime minister and is seen as close to the Rajapaksa clan, despite being in the opposition party — even protecting them, some critics say, when they lost power in 2015. In addition, Wickremesinghe was in office during the 2019 Easter bombings — and claimed that he “out of the loop” regarding warnings about the attacks, which left at least 250 dead.
How can Sri Lanka get out of this crisis?
In the face of worsening economic crises, violent protests and entrenched government corruption, the future of Sri Lanka’s government is murky at best. At this time, protesters are demanding that the remaining Rajapaksa family members – including Gotabaya, the president, whose office entrance protesters have occupied in the past month? – be removed from government. Many also see Wickremesinghe’s appointment as a slap in the face and symbolic of Gotabaya’s long-standing refusal to admit his government’s role in the crisis.
According to Paikiasothy Saravanamuttu, the executive director of the Center for Policy Alternatives, a think tank in Colombo, Wickremesinghe has a huge task ahead of him if he is to get the country out of the current crisis.
“Mr Wickremesinghe needs to focus on both the political and economic dimensions of our governance crisis,” he told cafemadrid via email. “Neglecting the political dimensions will undermine the economic one.”
The most important of the problems Wickremesinghe has to address is getting help from the International Monetary Fund to buy basic goods, Saravanamuttu said. The IMF can issue rapid financing instruments, or RFIs, to countries in need of immediate assistance due to a natural disaster or other forces beyond its control, but conditions in Sri Lanka are not within the typical remit of an RFI. Finance Minister Ali Sabry, who replaced Basil Rajapaksa, formally requested help from the IMF in April, and has been working with the IMF to negotiate some sort of deal; however, like him said in a speech to Parliament earlier in May, any deal will be based on sovereign debt restructuring and would take six months to get underway.
But the economic and political crises are so deeply intertwined that, Saravanamuttu said, solving one would not ease the other; both issues need to be addressed for Sri Lanka to recover. †[Wickremesinghe] must ensure that we get the bridge funding and the agreement with the IMF, as well as curtail the powers of the executive presidency and set a date for Gotabaya Rajapaksa to resign and the office of executive presidency be abolished,” he said. Wickremesinghe is, according to the Associated Pressmeeting with diplomats from Japan, the US, the European Union, Germany, China and India to put forward the idea of an aid consortium to help rescue the country quickly, but the political dimensions have yet to be substantially addressed.
At present, Gotabaya has not expressed the intention to resign from office and retains 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 half of its five-year term. Although Gotabaya has came up with the idea to limit those powers and repeated his intention on Wednesday to do this in a speech to the nation, which has yet to make progress. From Saturday he will keep his office and appointed four new ministers, all belonging to 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 forces to shoot at the scene anyone deemed to be taking part in vandalism or arson.
But protesters, both on the street and onlineare still demanding Gotabaya’s resignation, which Saravanamuttu says is crucial for the country’s future.
“The people are demanding that the president leave and if this is not addressed it will be at the expense of the country.”