Sri Lanka's left-leaning political party swept to victory in the recent elections, giving Anura Kumara Dissanayake a strong mandate to implement crucial economic and governance reforms that could shape the country for the next 50 years, but there exist challenges and opportunities to this.
Ushering in a paradigm shift in its political landscape, Sri Lanka elected its first left-leaning President in September 2024 and granted over two-thirds Parliamentary super majority to its first leftist government in November Parliamentary elections. President Dissanayake’s victory in Presidential elections was regarded as a turning point in Sri Lanka’s political history. It was the only time that voters selected a President outside Sri Lanka’s traditional ruling elite, and outside of Sri Lanka’s two major political parties that governed since independence and their related branches.
NPP’s promise of addressing deep-rooted governance issues, corruption and accountability concerns, along with the promise of ushering in a ‘systematic change’ in Sri Lanka’s political culture appealed to Sri Lanka’s masses gravely impacted by the economic crisis and discontented by mainstream political parties. President Dissanayake’s political alliance thus transformed from an opposition party holding three seats in the former Parliament to a ruling regime with Parliamentary super majority.
This transformation is not an easy endeavor for a political movement that has been associated with a violent revolution in Sri Lanka’s history and criticized for lacking firsthand experience in administrative governance. Regardless, NPP and President Dissanayake have continued to garner resounding public support including in November Parliamentary elections at which they set many firsts and records in Sri Lanka’s election history. Most importantly, NPP is the first ‘single party’ to have won two-thirds majority under the proportional representation (PR) system in Sri Lanka since it was implemented (compared to previous governments that established two-thirds majority through the support of other parties).
Domestic prospects and challenges
With legislative power shifting to the left, President Dissanayake and his NPP government now have a strong mandate to implement promised economic and governance reforms, as well as the power to amend the constitution. NPP’s willingness to bring in constitutional changes including abolishing executive presidency through which power is largely centralized in the hands of the President, and criticized over the years, particularly in relation to its role in the 2022 economic crisis, made the NPP stand out in the run up to elections. Abolishing executive presidency would help return authority to the Parliament and distribute power more equally amongst branches of government, improving checks and balances. The NPP now have legislative power to bring in such promised changes which could strengthen safeguards.
However, Sri Lanka’s past has shown that having two-thirds Parliamentary majority could in fact weaken democracy, leading to authoritarian rule and weaker institutions. The NPP have a tremendous opportunity to turn the tide around and prove how the strong mandate granted by people can be utilized to deliver positive reforms.
On the economic front, all eyes are on NPP’s approach to Sri Lanka’s ongoing IMF prorgamme. Overwhelmed by austerity measures introduced by the former government to stabilize the economy, under the economic recovery programme supported by the US$2.9Bn bailout from the International Monetary Fund (IMF), Sri Lanka’s masses are counting on President Dissanayake to deliver some relief. During his Presidential election campaign Dissanayake pledged to renegotiate the IMF programme when in power and was critical of the austerity measures placed on the public. NPP has already signaled intent to introduce some income tax relief and higher state sector pay in next year’s budget. Relief measures would need to be delivered without compromising on achieving fiscal and monetary targets tied to Sri Lanka’s IMF programme. Backsliding on policies and derailing off the IMF track would worsen prospects.
Nevertheless, the new government has thus far been very clear in their intent of continuing with the IMF prorgamme. Keeping up the reform momentum, particularly in relation to reforms that the center-left is less known for - such as reforming/privatizing state-owned enterprises, would be a crucial test for leftist NPP.
The new NPP government will need to steer the economy towards concluding the ongoing debt restructuring programme and towards improving the country’s credit ratings in the near/medium term. Meanwhile, in the long-run the NPP will need to work towards addressing structural weaknesses within the Sri Lankan economy while delivering lasting and equitable economic growth.
Navigating geopolitical dynamics
Balancing ties with the two regional powers India and China will be President Dissanayake’s key challenge on the geopolitical front. Although the NPP has evolved and progressed from its leftist chief constituent partyJanatha Vimukthi Peramuna (JVP) or the People's Liberation Front, the party’s traditional Marxist leanings have been perceived to be ideologically closer to China. Meanwhile, in the past, NPP’s core party - JVP had been critical of India’s policy towards Sri Lanka and had opposed India’s involvement in Sri Lanka’s conflict in the North and East through the Indo-Lanka Accord of 1987. Analysts note that these ideological roots and historical linkages have resulted in NPP’s foreign policy being viewed as being closer to China and averse towards India. However, the NPP has thus far engaged broadly across regional powers, including neighboring India. President Dissanayake and the NPP will now need continue to work towards balancing the scale between India and China.
Sri Lanka’s strategic geographic location in the heart of the Indian ocean has drawn considerable attention from regional powers. Sri Lanka’s strategic maritime location has garnered keen interest from China, particularly in relation to Sri Lanka’s importance in the Maritime Silk Road under the Belt and Road initiative. Given Sri Lanka’s close proximity to India, neighboring India has kept a close eye on Chinese investments in to ports and related infrastructure in Sri Lanka. Both India and China remain vital to Sri Lanka as key trading partners, leading bilateral creditors and major source markets for tourism. Hence, economic opportunities can be enhanced only by working with both regional powers.
JVP-led NPP’s former position towards India, combined with its more recent position relating to Indian Adani Group's wind power project in Sri Lanka casts some uncertainty around the future of the India-Sri Lanka relationship under NPP rule. President Dissanayake vowed to cancel Indian Adani Group's wind power project in Sri Lanka if it gets elected in the presidential election. The promise was backed by the interest in maintaining energy sector sovereignty. Sri Lanka is also reviewing India’s Adani projects in Sri Lanka following US bribery charges against its founder. However, NPP has thus far been open to engaging with India and towards deepening the broad bilateral relationship. India too has been keen to engage with the NPP and hosted President Dissanayake on an official visit to India ahead of Presidential elections.
Thus far, the NPP has engaged across powers including India, Japan and the West. The new administration will need to continue to maintain a balanced and pragmatic approach to foreign relations, navigating skillfully through the currents of regional competition. A balanced foreign policy will be crucial for supporting domestic investment promotion and economic growth, and in contributing to broader regional security and stability.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of IIPA and this platform.
Author
Nipuni Perera is a PhD Candidate from the Department of Political Science and International Relations at the University of Canterbury in Christchurch, New Zealand