Why Sri Lanka’s new PM is not the change the country needs

The Sri Lankan president appointed a new prime minister, Ranil Wickremesinghe, a familiar face in office, as the country’s economic crisis spirals into a full-blown political disaster and a violent conflagration between security forces, supporters of the current president, and protesters demanding sweeping political and economic change.

Wickremesinghe returns to office after five previous terms as the country’s prime minister; he is replacing former Prime Minister Mahinda Rajapaksa, who, along with his brother, President Gotabaya Rajapaksa, have overseen the country’s economic collapse. Mahinda resigned last week amid increasingly violent protests, during which nine people were killed and more than 300 injured, according to Reuters.

As Vox’s Natasha Ishak explained in April, Sri Lanka’s economy is in shambles in large part due to the country defaulting on around $50 billion worth of foreign loans, for the first time in its history as an independent nation. The last three years have seen successive shocks to Sri Lanka’s outbound tourism sector: a series of church bombings in 2019, the Covid-19 pandemic, and Russia’s invasion of Ukraine, which previously generated around $4.4 billion annually and was a major economic engine. Those crises, exacerbated by Rajapaksa’s financial mismanagement, have led to critical shortages of goods, including milk, fuel, food and medicine, and prolonged power outages, which in turn have led to widespread protests and spiraling 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, his brother served until April 4 as finance minister. Gotabaya, the president, fired his younger brother, Basil, and replaced other cabinet officials at the time, but neither the protesters nor the politicians were impressed; 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 begin 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 gross neglect of the Rajapaksa administration in economic matters since it came to power in November 2019 has significantly aggravated 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 New York Times article describes. Over the past decade, the country has taken out a number of loans, including around $5 billion from China. Through your call Belt and Road initiative, China has invested in a series 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 eventually given to China as collateral when the Sri Lankan government was unable to repay or renegotiate the loans, or successfully complete the project due, at least in part, to to rampant corruption.

Gotabaya was elected president in 2019 and the Rajapaksa dynasty was back in charge; that meant more ambitious infrastructure projects, despite mounting foreign debt and declining foreign reserves to import essential goods, due to a lack of foreign revenue from tourism and other sectors. Gotabaya also slashed taxes when he came to power, inhibiting the government’s ability to buy foreign exchange reserves. On top of it all, a 2021 ban on imported chemical fertilizers, which was aimed at saving those foreign exchange reserves, decimated the agricultural sector.

The result, writes Keenan, is “Sri Lanka’s worst economic crisis in nearly 75 years of independence.” The protests, he wrote in April, “have now morphed into a national uprising,” despite the Rajapaksa government’s “reputation of political repression.” The protesters even forced Mahinda to flee his property, Temple Trees, and tender his resignation on Monday after they attempted to breach the complex.

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 Thursday and first served as prime minister in 1993, under President DB Wijetunga.

Wickremesinghe is the product of families long active in civil service and politics, going back 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 posts, including deputy foreign minister and minister for industries. In that role, Wickremesinghe attracted foreign investors, perhaps a crucial selling point for his current appointment, as his relations with India and Western countries could help negotiate Sri Lanka out of its current economic crisis. .

However, as the BBC points out, Wickremesinghe has never served a full term as prime minister, and is perceived to be quite close to the Rajapaksa clan despite being in the opposition party, even, say some critics, protecting them when they fell from power. in 2015. Additionally, Wickremesinghe was in office during the 2019 Easter bombings, and claimed he was “out of the loop” regarding 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. At this time, the protesters are demanding that the remaining members of the Rajapaksa family, including Gotabaya, the president, whose entrance to the office the protesters have been occupying for the last month, be removed from the 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 the current crisis.

“Mr. Wickremesinghe has to focus on both the political and economic dimensions of our governance crisis,” he told Vox by email. “Neglecting the political dimensions will undermine the economic ones.”

Chief among the problems Wickremesinghe must address is securing assistance 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 Sri Lanka’s circumstances do not fall under the typical mandate of an RFI. Finance Minister Ali Sabry, who succeeded Basil Rajapaksa, formally requested IMF assistance in April and has been working with the IMF to try to broker some sort of deal; however, as he said in a speech to Parliament in early May, any deal would be based on restructuring the nation’s debt and would take six months to get under way.

But economic and political crises are so deeply intertwined that, Saravanamuttu said, resolving one would not alleviate the other; both issues must be addressed if Sri Lanka is to recover. “[Wickremesinghe] You have to make sure you get the bridge financing and the IMF deal, as well as cut the powers of the CEO and set a date for the resignation of Gotabaya Rajapaksa and the abolition of the office of the CEO,” he said. Wickremesinghe, according to the Associated Press, is meeting with diplomats from Japan, the US, the European Union, Germany, China and India to float the idea of ​​an aid consortium to help rescue the country quickly, but the political dimensions are still they have not arrived. be substantially addressed.

As of now, Gotabaya has not expressed any intention of resigning from his position and retains the broad executive powers instituted under his government in October 2020; this includes the power to make a number of important appointments and to dissolve parliament at any time after the middle of their 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. As of Saturday, he retains his post and appointed four new cabinet ministers, all from his Sri Lanka Podujana Peramuna party, in a bid to achieve stability until a new cabinet can be formed. He continues a strict nationwide curfew, imposed on Monday, as well as orders for security services to shoot on the spot anyone seen as engaging in acts of vandalism or arson.

But protesters, both in the streets and online, continue to demand Gotabaya’s resignation, which Saravanamuttu says is crucial to the country’s future.

“The demands of the people are that the president leaves and not attending to this will be to the detriment of the country.”

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