The new president of Sri Lanka, Anura Kumara Dissanayake, was sworn into office Monday September 23 after winning a snap election held five days prior. Under the tough austerity program imposed on Sri Lanka as part of a $2.9 billion International Monetary Fund (IMF) bailout agreement, former President Ranil Wickremesinghe had introduced sharp increases to income tax and electricity prices as part of an economic stabilization plan, prompting public outrage over rising food costs. Wickremesinghe took power in 2022 after huge protests over economic mismanagement led to the ousting of Gotabaya Rajapaksa, Winston’s brother. Janatha Vimukthi Peramuna (JVP) leader and National People’s Party (NPP) chief candidate Dissanayake assured the IMF agreement would not be terminated, but that his government will re-negotiate it to “reduce” its impact on Sri Lanka.
In his inauguration speech, Dissanayake called for unity across the nation, saying, “There are things I know and things I don’t know, but I will seek the best advice and do my best.” He also posted on X stating, “This victory belongs to all of us,” recognizing the collective effort of his supporters. Economic experts, however, have expressed concerns about the road ahead. The NPP has criticized the current IMF terms as disproportionately affecting the poor and working classes. Rajni Gamage, a research fellow at the National University of Singapore, told Al Jazeera, “they [the NPP] feel like the deal has been quite unfair and that it favors wealthier sections more.”
Dissanayake’s decision to dissolve parliament just one day after taking office signals his commitment to seeking a fresh mandate to implement his policies. By dissolving the 225-member parliament, in which the NPP held only three seats, Dissanayake hoped to gain broader support for his economic policies and reforms. However, dissolving parliament creates uncertainty. Should the elections result in a divided government, Dissanayake’s policies could face significant pushback. While his decision to dissolve parliament aligns with his campaign promises, his real test lies in whether he can balance domestic expectations with international pressures to navigate the economic crisis effectively.
Dissanayake is a veteran Sri Lankan politician. AP News reported that his political career started when he was studying at the university and joined the Socialist Students’ Union — the student wing of the JVP. Meanwhile, the underlying causes of the economic collapse which forced Rajapaksa out in 2022 are age-old. Sri Lanka found itself in a deepening financial crisis with its access to international credit in a choke-hold last year after borrowing heavily following the end of civil war in 2009, compounded by COVID-19 hitting tourism, Al Jazeera reported. This was exacerbated by the unfunded tax cuts in 2019. Inflation then rose nearly 74% until the end of 2022, sending millions into poverty. Real wages are still lower than they were before the crisis, and according to local analysts, Sri Lanka’s poverty rate has doubled. The nation is still grappling with foreign debt and the geopolitics of lying between two countries, one vying for greater influence in Sri Lanka while the other works to preserve its own dominance.
The presidency of Dissanayake is, undoubtedly, the one which determines everything for Sri Lanka. The current crisis facing the nation is a non-typical collapse brought on by years of mismanagement and exacerbated due to various global phenomena; this problem will not correct itself suddenly. The IMF deal provides a way out, but it needs to be handled carefully so as not to further hurt the most vulnerable amongst us. Going forward, how the president manages competing demands from overseas creditors and ordinary Sri Lankans trying to go about their daily lives will determine his success. Ultimately, affecting economic reforms without crushing the public under austerity for a third time is a balancing act that Dissanayake will also have to tread carefully on.
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