Sri Lanka holds its breath as new prime minister struggles to bail out economy

Placeholder when loading item promotions

COLOMBO, Sri Lanka — It has been almost three weeks since Ranil Wickremesinghe took over as Prime Minister of Sri Lanka with a daunting mandate to pull the crisis-weary country to the brink of an economic chasm that threatens to tear it apart.

The five-time prime minister has inherited a nation teetering on the brink of bankruptcy and so burdened with foreign debt that it has no money left for basic imports. Sri Lankans struggle to access essentials like food, fuel, medicine, cooking gas and even toilet paper and matches.

In his new job, Wickremesinghe left little doubt about what lies ahead. “The next few months are going to be the toughest of our lives,” he told the nation, which has been fed up with long lines, skyrocketing inflation and daily protests that seem to be spiraling out of control.

“We must prepare to make some sacrifices and face the challenges of this time.”

Since the May 17 televised address, the veteran politician, who also serves as Treasury Secretary, has engaged in difficult negotiations with financial institutions, lenders and allies, as well as United Nations agencies, to fill the coffers and bring some relief to impatient citizens.

He has taken necessary steps like raising taxes and pledged to overhaul the government that is concentrating power under President Gotabaya Rajapaksa, a model many believe has exacerbated the crisis.

He took office after days of violent protests last month forced his predecessor, President Gotaba Rajapakasa’s brother Mahinda, to resign and seek shelter from angry crowds at a naval base. Wickremesinghe is set to deliver a much-anticipated speech in Parliament on Tuesday that many hope will unveil a strategy to deal with the crisis.

But time may not be on his side as reforms are slow and people want results now. He is also a one-man party in Parliament – the only lawmaker from his party to hold a seat after suffering a humiliating defeat in a 2020 election.

“A person who has no political base is dealing with an unprecedented crisis,” said Dayan Jayatilleka, a former diplomat and political analyst.

Queues to buy fuel and cooking gas have stretched for kilometers (miles) each day and snaked around blocks, with Sri Lankans weathering torrential rains and scorching heat to buy essentials that cost three times what they used to. They often have to wait for days, and many still get nothing.

Jagath Chandana, 43, has been standing in line on the outskirts of the capital Colombo for two days with a canister to buy cooking gas. “It was crazy. We are totally helpless. It seems that even Ranil cannot solve the crisis. They (politicians) just talk, but on the ground people suffer,” he said.

Demonstrators have camped outside Rajapaksa’s office for over 50 days, demanding his resignation.

They say economic mismanagement, political blunders like a hasty ban on imported chemical fertilizers that devastated crops, and a government staffed with Rajapaksa relatives caused the crisis. At the height of their power, six Rajapaksa occupied government posts – the crisis has deserted all but one. The other five remain as lawmakers.

Sri Lanka has suspended nearly $7 billion in foreign debt due this year. It owes $26 billion out of a total of $51 billion through 2026.

Foreign exchange reserves have shrunk to just two weeks’ worth of imports as Wickremsinghe prepares to receive a bailout from the International Monetary Fund. On Thursday, he said any bridging funding will be conditional on an IMF agreement and he was confident negotiations would be completed by the end of June. The government is targeting $5 billion for repayments and another $1 billion to top up the country’s reserves, Wickremsinghe said last week.

In such a volatile situation, Wickremsinghe was able to bring some transparency and rationality that were lacking in the previous administration of the Rajapaksa clan, Jayatilleka said.

But analysts also say he will find it difficult to tackle some of the challenges, especially as he also faces a chaotic battle to revise the constitution and boost parliament’s powers to introduce much-needed reforms.

“His suggestions are good in the medium and long term. But people want immediate changes and they don’t see that,” said political scientist Jehan Perera, adding that some see Wickremesinghe as helping Rajapaksa stay in power.

Along with calls for a new president, protesters have been pushing for a complete overhaul of what they call a broken model of government for weeks.

For nearly 45 years, Sri Lanka has been governed by a powerful executive presidential system. After a resounding election victory in 2019, Rajapaksa strengthened the system through constitutional changes that further concentrated power in the presidency – a move that also alarmed critics at the time.

Wickremsinghe made an important and early pitch to roll back some of the President’s powers. But such measures will not be easy and require not only the approval of the Supreme Court, but also a two-thirds majority in Parliament.

The question remains whether Wickremsinghe would be able to push through reforms in the 225-seat parliament, where Rajapaksa’s party holds the majority. Some opposition parties have already thrown their support behind the reforms, but Wickremsinghe’s sole standing in the chamber could prove a major disadvantage. Or it could be an asset.

His party split in 2020 amid a leadership crisis, prompting most senior members to leave the party and form a new party – currently the country’s main opposition.

“He has the opportunity to use his expertise and experience to play the role of a technocratic prime minister unaffiliated with any political party,” Jayatilleka said.

The scale of the protests since Wickremsinghe took office has also shrunk. Perera said it is difficult for people to keep up the momentum, but as long as the economic crisis lasts, so will the demonstrations.

While there continue to be signs of financial hardship and struggles in Sri Lanka, there is growing hope for some that Wickremsinghe will see them through the trying times.

“He cannot perform miracles, it will take time to solve the crisis because previous ministers screwed it up,” said Amila Prasanna, a carpenter. “He’s trying to solve the problems one by one and I’m sure he’ll do something,” he said while queuing for three days to buy gas.

Pathi reported from New Delhi.

About Ellen Lewandowski

Check Also

Mississippi Gov. Tate Reeves says it’s a “great day not to be in Jackson amid the water crisis.”

Mississippi Gov. Tate Reeves (R) said Friday it was, as always, “a great day not …