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Anura Kumara Dissanayake, leader of the National People's Power (NPP) party, gestures after he claimed the victory in the presidential election, in Colombo, Sri Lanka, September 22, 2024.
Sri Lankans reject the Old Guard
Sri Lankan election authorities announced Sunday that Anura Kumara Dissanayake, a Marxist, will become the island’s next president, in a rebuke of the political establishment. Outgoing president Ranil Wickremesinghe congratulated Dissanayake on Sunday and urged him to continue working toward Sri Lanka’s economic recovery after defaulting on its sovereign debts in 2022.
The election was widely seen as a referendum on the austerity measures that Wickresmesinghe imposed as part of a bailout deal with the International Monetary Fund. Although they brought down inflation and stabilized foreign exchange reserves, they also inflicted pain on ordinary Sri Lankans, who were swayed by Dissanayake’s campaign promises to renegotiate terms with the IMF. But Dissanayake will need to tread carefully: roughly $3 billion in IMF support is on the line.
He also must find a way to kickstart a moribund economy, and here’s where geopolitics come into play. In recent years Colombo has looked to China for major infrastructure investments, only to see revenues fall well short of expectations. Despite Sri Lanka losing ownership of a major Chinese-backed port, Dissanayake is expected to continue deepening ties with Beijing, even as the US backs its own Sri Lankan port project.Supporters react during an election campaign rally for Sajith Premadasa, leader of the Samagi Jana Balawegaya (SJB) party, ahead of the presidential election, in Colombo, Sri Lanka September 18, 2024.
Sri Lankans go to polls at pivotal moment for economy
On Sept. 21, Sri Lanka will hold its first presidential vote since the spectacular economic meltdown of 2022, when the pandemic-scarred country defaulted on its massive debts, imports dried up, and widespread shortages of basic goods developed. Images of angry protesters invading the luxurious estates of the president and prime minister appeared on television screens around the world.
Following a government shakeup, new President Ranil Wickremesinghe negotiated a bailout with the IMF that helped to stabilize the situation. He is asking voters this weekend for another five years in office to continue the work of rebuilding the economy, but the tough terms of the IMF program have undermined his support.
We asked Eurasia Group expert Rahul Bhatia what to expect from the upcoming election.
What are the main issues for voters? Is the IMF program a campaign issue?
Economic issues have naturally taken center stage in the election as Sri Lanka continues its fragile recovery. While shortages of everyday essentials such as food, fuel, and medicines have subsided, there is still widespread discontent over the increased cost of living and reduced welfare programs. The IMF bail-out mandated austerity measures such as tax hikes and subsidy cuts, which have increased hardships for many Sri Lankans.
As a result, most candidates are campaigning on promises such as cutting taxes, raising the salaries of government employees, providing subsidies for low-income groups and farmers, and lowering fuel and electricity prices. None of the frontrunners have opposed the IMF program in principle, but most have promised to renegotiate it.
How far has the economy come since the crisis of 2022?
The economy returned to modest growth in the second half of 2023, and inflation, too, has eased to normal levels from its peak of nearly 70% at the height of the crisis. Nevertheless, economic output declined by 9.5% over 2022 and 2023, and it will take time for it to return to pre-crisis levels. About one-quarter of the population still lives below the poverty line, as the economic crisis and subsequent austerity measures have disproportionately affected low and middle-income families. Overall, Sri Lanka’s economic situation remains precarious, and it will need a stable government to complete its recovery.
Who are the frontrunners in this election?
Amid a field of 38 contestants, there are four clear frontrunners: the incumbent Wickremesinghe, opposition leader Sajith Premadasa, the leftist Anura Kumara Dissanayake, and Namal Rajapaksa, scion of the Rajapaksa family that once dominated the island's politics but has been largely discredited by the economic crisis. (Then-president President Gotabaya Rajapaksa fled the country after angry protesters invaded his residence in July 2022.) This means the presidential election will effectively be a three-way contest between Wickremesinghe, Premadasa, and Dissanayake.
What are they offering?
Veteran politician Wickremesinghe is campaigning on steering the country out of its worst economic crisis in modern times. Meanwhile, Premadasa and Dissanayake have sought to exploit the unpopularity of his austerity measures and have promised to ease the burden for Sri Lankans. They have also leveled charges of corruption against Wickremesinghe.
Premadasa comes from a well-known political family, but Dissanayake was a marginal player in Sri Lankan politics until recently. His popularity has risen rapidly over the last three years on the back of the protest movement that ousted Gotabaya Rajapaksa and an effective grassroots campaign. While Premadasa enjoys the support of the country’s Tamil minority, Dissanayake has captured the imagination of the youth.
What are the challenges the next president will face keeping the recovery on track?
To retain the IMF’s support, the government will have to reach a budget surplus, which could prove challenging given the welfare measures the candidates have proposed. The next president will have to balance improving the everyday lives of Sri Lankans and reducing the country’s debt burden.
The next president will also face a parliament dominated by the Rajapaksa-led Sri Lanka People’s Front, which was elected in 2020. Premadasa and Dissanayake, in particular, would find it difficult to pass legislation without a parliamentary majority. Both would thus likely call for parliamentary elections before the end of the year as one of their first actions.
Will these elections reverberate beyond Sri Lanka’s borders?
Given Sri Lanka’s towering debt obligations with foreign creditors and strategic location in the Indian Ocean, many countries have a vested interest in the island nation’s political and economic stability. India would prefer a Premadasa or Wickremesinghe presidency, though it has indicated it would work with any of the four frontrunners. Apart from political stability, New Delhi will prioritize limiting China’s influence on the island—a concern the US and Japan share. It will also seek to bolster connectivity between India and Sri Lanka and push the next president to grant the Tamil provinces a degree of autonomy.
China continues to have a sizeable economic footprint in Sri Lanka, but its influence has waned with that of the Rajapaksas. Former president and prime minister Mahinda Rajapaksa and his brother Gotabaya were close to Beijing and oversaw a range of Chinese infrastructure projects on the island, partially contributing to its debt problems (China still accounts for about half of Sri Lanka's bilateral debt). Nevertheless, Dissanayake is thought to have close ties to China, and if he becomes president, it could allow China to regain some of its influence.
Edited by Jonathan House, Senior Editor at Eurasia Group.
As the island nation attempts to crawl its way out of a crippling economic crisis, Sri Lanka’s leading presidential candidates are promising a fairer shake for ordinary families — but will voters demand an upheaval of the entrenched aristocracy?
In Sri Lanka’s elections, the system is on trial
As the island nation attempts to crawl its way out of a crippling economic crisis, Sri Lanka’s leading presidential candidates are promising a fairer shake for ordinary families — but will voters demand an upheaval of the entrenched aristocracy? The country heads to the polls on Saturday, Sept. 21.
Sajith Premadasa, leader of the main opposition United People’s Power party and son of the country’s third president, says that he willrenegotiate the country’s International Monetary Fund deal to shift more of the burden onto wealthy citizens if he wins. Years ofeconomic mismanagement led to food, fuel, and medicine shortages and mass protests, with then-President Gotabaya Rajapaksa and his brother (then-Prime Minister) Mahinda Rajapaksa fleeing the country in 2022. Mahinda Rajapaksa’s son Namal is also running for president today.
Rajapaksa’s close political ally Ranil Wickremesinghe has been running the country ever since and negotiated a bailout with the IMF that included fiscal reforms and tax increases. Inflation has fallen from 70% in 2022 to 0.5% last month, and the currency is gaining strength as foreign reserves increase. Whether voters are feeling those improvements in their daily lives will determine whether he stays in power.
Sri Lanka’s 1983-2009 civil war hangs heavily over the election as well. Premadasa has reached out to the minority Tamil community, who make up about 11% of the population overall but predominate in the north and east. The Liberation Tigers of Tamil Eelam fought for independence in those regions after a series of vicious anti-Tamil pogroms between 1956 and 1983, and atrocity after atrocity by both sides have deeply scarred the country.
Estimates of the death toll run over 200,000 people, not to mention hundreds of thousands more displaced, and thousands disappeared, tortured, and executed without a trace. If Tamil voters believe in Premadasa’s promises of devolution of power, they could tip the election in his favor — but with so much blood spilt, it will be a hard sell.
We also have our eye on Anura Kumara Dissanayake, who alone among the major candidates has no ties to the island’s elite families. He rose from humble roots to lead the National People’s Power coalition and isalso promising to renegotiate the IMF deal and tackle pervasive corruption. However, he is not free of the taint of war: He is the leader of the Janatha Vimukthi Peramuna, a communist party behind the 1987-1989 uprising that killed at least 60,000 people.A servicewoman holds a rifle during the graduation ceremony of the officers of the Armed Forces of Ukraine of the Hetman Petro Sahaidachnyi National Academy of Land Forces, in the Lviv Region of western Ukraine.
Hard Numbers: Women warriors of Ukraine, baby drought in Japan, cash for Colombo (not Peter Falk), tragic ending in Mexico
50,000: Every day is women’s day in Ukraine’s defense against Russia. As many as 50,000 women are currently serving in the Ukrainian military, more than triple the number when Russia first invaded in 2014.
799,728: After nearly a decade of steady decline, the number of babies born in Japan last year reached a record low of just 799,728 last year, prompting an adviser to PM Fumio Kishida to warn that “if we go on like this, the country will disappear.” Read our recent piece on why Japan is having so few babies, and what the government wants to do about it.
2.9 billion: Finally, a lifeline for Sri Lanka. The island nation, battered by the worst economic crisis in its history, is set to receive a $2.9 billion loan from the IMF later this month. Sri Lanka is already past due in paying China back nearly three times that amount, but Beijing recently agreed to a two-year pause on the payback.
2: Two of the four Americans kidnapped by heavily armed men in a northern Mexico border town have been found dead, and the remaining two have been rescued and returned to the US. The abduction may have been a case of mistaken identity: The gunmen reportedly mistook the travelers for Haitian drug smugglers, when they were really part of a group of friends who traveled to the town of Matamoros for affordable cosmetic surgery.
Sri Lankan Commando Regiment members in Colombo, Sri Lanka.
What We’re Watching: Sri Lanka’s shrinking military, mass shootings in America, McCarthy’s Taiwan visit, a common currency pipedream
Sri Lanka’s military downsize
In its latest bid to cut the economic fat, Sri Lanka's government announced that it will downsize its army, aiming to reduce the number of military personnel from 200,783 to 135,000 by next year and to 100,000 by 2030. Sri Lankan defense officials say the army is restructuring in order to boost its tech capabilities, primarily in cyberspace. But analysts highlight that this is part of President Ranil Wickremesinghe’s pledge to slash the bloated public sector, a precondition to unlocking a $2.9 billion bailout package from the International Monetary Fund. Crucially, military salaries make up around 37% of public wage costs. Cash-strapped Sri Lanka defaulted on its external debt for the first time in May 2022, after years of economic mismanagement led to acute fuel and food shortages – and forced Colombo to borrow heavily from India and China. With the bulk of Sri Lanka’s defense spending going to salaries rather than investment in equipment, this plan presents an opportunity for the country to correct its balance sheet. But some critics worry that Colombo, facing an internal terror threat, could be moving too hard too fast.
America’s gun violence disease
It’s been a deadly start to the year in America, with 38 mass shootings recorded nationwide in just three weeks. In recent days, two mass shootings in California in just 48-hours – including in Monterey Park, where 11 Asian Americans were gunned down while celebrating Lunar New Year, and in Half Moon Bay, where 7 were killed on Monday – have again put the spotlight on America’s unique gun problem. Communities in Florida, Louisiana, and Maryland are also reeling from mass shootings in recent weeks, reflecting the long established gun culture in America that distinguishes the US from other advanced economies. (For context, there are around 120 guns circulating in the US for every 100 people.) So, what happens now? President Joe Biden on Monday called on Congress to pass legislation banning assault weapons and raising the purchasing age to 21, but the newly empowered House Republican caucus will never go for it. Meanwhile, to defend their pro-gun position, Republicans are pointing out that many states with high gun-violence rates already have tight gun laws, but that ignores the fact that many of these weapons are illegally smuggled from states with laxer regulation.
Mr. McCarthy (soon) goes to Taiwan
Having vowed last year to retrace the steps of his predecessor, newly installed House Speaker Kevin McCarthy announced on Monday that he too will visit Taiwan. You’ll recall that Nancy Pelosi’s trip last August ruffled feathers and changed the status quo, prompting China to conduct live-fire military exercises near the self-governing island. McCarthy’s trip, likely this spring, is almost certain to raise tensions across the Taiwan Strait. China, which considers Taiwan a breakaway province, is concerned that visits by top-level American officials to the region are a de-facto recognition of its government as separate from China’s. The US maintains its “One China” policy, which notably does not allow for official diplomatic relations with Taiwan and recognizes the island as a part of China. Also, the 1979 Taiwan Relations Act only commits the US to helping Taiwan defend itself, although President Joe Biden has said Washington would come to Taiwan’s defense if China attacked. Support for Taiwan is seen as an important geostrategic interest and a bellwether of US credibility in upholding international commitments to its allies. But President Xi Jinping is unlikely keen to see an escalation as he grapples with a national public health crisis after abandoning China’s zero-COVID policy.
What We’re Ignoring: South American common currency buzz
Ahead of new Brazilian President Luiz Inacio "Lula" da Silva’s trip to Buenos Aires this week, he and his Argentine counterpart Alberto Fernandez made waves with a joint pledge to explore the creation of a common South American currency. If it happened, the currency bloc would be about one-third as big as the Eurozone. But there’s scant chance of South America’s two largest economies striking a common coin for the continent any time soon. For one thing, although the two countries trade a lot, Argentina lives in a near-permanent state of financial crisis and is currently struggling with an inflation rate near 95%. Would Brazil really hitch its wagon to that star? What’s more, while the politics line up nicely now under two simpatico leftist leaders, Argentina’s elections this fall could (and likely will) produce a center-right government less friendly to Lula. Brazil’s finance minister has already walked back the currency idea, saying that for now the focus will be on creating better mechanisms for financing bilateral trade.Then and Now: Colombian peace talks, Sri Lankans' anger, Macron's challenges
Three months ago: Colombia government, ELN resume peace talks
One of Gustavo Petro’s first orders of business after becoming Colombia’s president in Aug. 2022 was to bring “total peace” to the country. As a result, three months ago, his leftist government announced it was resuming talks with the National Liberation Army, a guerilla group known as ELN, for the first time since 2019. The talks were hailed as a big deal considering that the 2,400-member strong force has been at war with the government since the 1960s. The ELN was the largest guerrilla group not to sign onto a historic 2016 peace deal between the government and guerilla groups, including the Revolutionary Armed Forces of Colombia. Since then, violence by the ELN and other armed groups financing their operations through drug trafficking and illegal mining has continued to terrorize Colombians, particularly in rural areas. Last week, however, Petro, a former guerilla, announced a breakthrough, saying his government had reached a peace agreement with the ELN for a six-month ceasefire. But the ELN came out shortly after and said no deal had been reached, stating that “a unilateral government decree cannot be accepted as an agreement.” Petro, for his part, has not responded to the group’s denial. Still, communication is a good thing, and the two sides say they will continue talks this month in Mexico. Petro discussed these issues, and more, in an interview with GZERO Media.
Six months ago: Sri Lankans’ wrath boils over
The global summer of discontent – prompted partly by post-pandemic economic turmoil and aggravated by the war in Ukraine – was on full display in Sri Lanka in July, where, as we wrote here, long-simmering public wrath directed at Sri Lanka’s leader over the country’s economic collapse finally boiled over. After months of blackouts and food scarcity that forced Colombo to default on its external debt for the first time in May 2022, thousands of Sri Lankans forced the ouster of President Gotabaya Rajapaksa before storming his residence. (The photos of them swimming in the president's pool were quite something.) While Sri Lanka’s economic path remains precarious – Colombo was forced last year to limit imports to essentials – there has been some progress. In September, President Ranil Wickremesinghe reached a preliminary deal with the International Monetary Fund for a $2.9 billion bailout package after Colombo made some reforms earlier in the year, including floating the rupee. But the IMF won’t follow through until Sri Lanka restructures the billions of dollars in debt owed to three main creditors: India, China, and Japan. Talks between Colombo and all three economic powerhouses remain ongoing, but a range of issues have prevented a deal from being reached before the end of 2022, which Colombo had been aiming for.
Nine months ago: No cakewalk for Emmanuel Macron
Back in April, we reported on French incumbent Emmanuel Macron’s electoral successes – he not only won a second term as president, a mean feat in French politics, but he also kept the country’s increasingly influential anti-establishment forces, on the right and left, at bay. Still, we noted that Macron’s second term would be anything but a cakewalk, with him facing a host of thorny issues at home and abroad. Fast forward nine months and it hasn’t been smooth sailing for Macron – and things are bound to get even dicier in the weeks ahead. In parliamentary elections back in June, Macron’s Ensemble Together bloc finished 44 seats short of a majority in the National Assembly, crippling the president’s ability to easily pass legislation and giving birth to what one French publication described as a “stillborn five-year term.”
The difficulty in getting his legislative agenda through will likely to come to a head soon as Macron is pushing ahead this week with his pension reform plan, which would raise the retirement age by three years to 65 – a move unpopular with roughly 70% of French voters. While Macron can find ways to get this through parliament using emergency powers, the government is already bracing for mass public outrage comparable to strikes in 2019 against the same proposal that paralyzed the country. Still, Macron says he will move ahead with pension reform as it is central to his pledge to reduce France’s debt-to-GDP ratio. Moreover, while Paris has spent billions of dollars to subsidize electricity bills, the cap on power prices rose this month from 4% to 15%, which is bound to hurt consumers at a time when food inflation remains sky-high.
Former Khmer Rouge head of state Khieu Samphan is seen inside the courtroom of the Extraordinary Chambers in the Courts of Cambodia as he awaits a verdict in Phnom Penh, Cambodia.
Hard Numbers: Khmer Rouge convictions, soaring Sri Lankan inflation, Japan’s Yen-tervention, “Fat Leonard” nabbed
3: After a trial that lasted more than 15 years and cost hundreds of millions of dollars, a court in Cambodia managed to convict just 3 people in connection with the large-scale massacres that the Khmer Rouge regime carried out in the 1970s.
70.2: The inflation rate in crisis-wracked Sri Lanka has now reached a whopping 70.2%. The island nation is suffering an acute dollar shortage, which makes it hard to pay for imports of food, fuel, and medicine. In July, protesters ousted the government.
25: The Japanese central bank, which has kept its interest rates ultra low even as other major banks keep hiking theirs, intervened on Wednesday to prop up the yen for the first time in 25 years. Higher interest rates generally draw in investment, which boosts the value of a currency. The yen has lost a fifth of its value against the dollar this year.
35 million: “Fat Leonard,” a fugitive US military contractor at the center of a $35 million scandal, has been nabbed by local authorities in Venezuela. Apparently he was on his way to Russia. Washington and Caracas will now negotiate the terms of his extradition to the US.
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A man walks past an almost empty vegetable stall at a market in Colombo amid Sri Lanka's economic crisis.
Hard Numbers: Sri Lanka’s long road to recovery, Ukraine’s homeless, Spain’s body-positive misstep, India’s cheetah resettlement
25: Sri Lanka’s new President Ranil Wickremesinghe will reveal a 25-year road map that he says will cut public debt and bring his country back from the economic brink. Wickremesinghe will present the plan to the International Monetary Fund as Sri Lanka tries to renegotiate some of the $51 billion in foreign debt it owes.
140,000: At least 140,000 homes and residential buildings have been destroyed in Ukraine since Russia’s invasion began on Feb. 24, according to Ukraine’s Defense Ministry. Kyiv now estimates that around 3.5 million Ukrainians have been left homeless as it braces for more evacuations from the east as Russia’s onslaught continues.
3: The Spanish government's attempt at body-positive summer messaging has …. not gone well. Three British women say their images were used in the campaign – which focuses on encouraging women of different shapes and sizes to strip down at the beach – without their consent. Spain’s government said that “at no point was it aware that the women in the images were actual real people.” Okay.
16: In a journey meticulously planned by conservationists, 16 cheetahs will be flown from South Africa to India in a bid to reintroduce the species in the South Asian country more than 50 years after they became extinct there. Critics say the relocation is risky for the big cats, but conservationists say it is crucial to expanding the global cheetah population.