Here’s what to expect in Sri Lanka with a new President in power

Ranil Wickremesinghe - President of Sri Lanka

Sri Lanka’s President Ranil Wickremesinghe. (BLOOMBERG / Buddhika Weerasinghe)

Sri Lanka’s new President, Ranil Wickremesinghe, had sought the top job for decades. Now he has to find ways to avoid the fate of his predecessor as he fends off protesters who’re angry about persistent food and fuel shortages.

The veteran politician was sworn in last week after months of protests escalated, forcing former leader Gotabaya Rajapaksa to flee to Singapore and resign.

Wickremesinghe, 73, is focused on clinching a bailout program from the International Monetary Fund and securing dollars from friendly nations to end shortages of essential items that have stalled economic activity and pushed inflation near 70%.

He’s also seeking to quell well-organized street protests. The new president has placed Sri Lanka under emergency rule — which allows security forces to detain and arrest people. Early Friday, just a day after he was sworn in, Wickremesinghe sent in the military and police to clear a key protest site, leading to tense scenes.

“The first indications from Ranil have not been great,” said Lakshini Fernando, senior vice president of research at Asia Securities Ltd. in Colombo. “But if he does focus on what are the dire needs of the citizens it may ease some pressure. It’s the long game. Ranil is good at the long game.”

Here’s what the new president has publicly committed to and what could happen:

1. Staying Away From Rajapaksa

Wickremesinghe told reporters last week that he was no ally of Rajapaksa and his family, who led the nation for most of this decade. They are widely seen as responsible for a series of missteps that led to the country’s economic meltdown.

Yet, Wickremesinghe has benefited from their problems. He moved from being a lawmaker to prime minister and then acting president in less than three months on the behest of Rajapaksa when protests escalated and forced him and his brother, former premier Mahinda Rajapaksa, to step down.

Wickremesinghe ultimately won the presidency with the support of Rajapaksa’s ruling party in parliament after two failed electoral attempts at the top job in a career that has spanned five decades. However, any decision he makes will need support from the Sri Lanka Podujuna Peramuna Party.

“The Rajapaksas will lie low for longer, but they will be calling the shots,” said Jehan Perera, executive director at the National Peace Council in Sri Lanka.

2. Forming a Unity Government

Wickremesinghe had pledged to form an all-party government. But so far, he has stacked his 18-member cabinet with lawmakers from the SLPP and Rajapaksa allies. Only two lawmakers from the opposition Samagi Jana Balawegaya party are in the government.

He named as premier Dinesh Gunawardena, his childhood friend and a lawmaker from a small nationalist party aligned to the SLPP. Wickremesinghe has kept the finance and defense portfolios, giving him an additional edge to lead the IMF talks. It also allows him to keep an eye on the powerful military as it enforces emergency rule.

Many in the opposition have called for early general elections, which aren’t due until 2025, saying the government doesn’t reflect the will of the people. Opposition leader Sajith Premadasa, who met with Wickremesinghe and was a contender for the prime minister’s job, said he would rather see parliament committees strengthened than cabinet posts dished out to “political opportunists.”

3. Curbing Protests

Wickremesinghe has alternated between lending a ear to the protesters and vowing tough action against those who stormed the residences and offices of the prime minister and president in July.

Aside from emergency rule, he has called on the army to maintain public order. Security forces, acting on a court’s instruction, have cleared a major oceanfront protest site near the presidential secretariat.

The new government has offered an alternative protest site, but it remains to be seen whether the demonstrators will take this up. It’s also not immediately clear if news of some easing up of food and fuel supplies will impact the momentum of the street demonstrations.

Still, leaders of the protest movement have vowed not to back down from their demand for Wickremesinghe’s resignation. On social media calls have started for an Aug. 9 protest to force him out.

4. Clinching IMF Support

The new president has said the island nation is close to a conclusion in negotiations with the IMF for a bailout program and made progress in “discussions for assistance” with foreign countries. As finance minister he will lead those talks together with the central bank.

IMF Managing Director Kristalina Georgieva told Bloomberg News in a recent interview that talks with Sri Lanka could proceed “quite quickly” as soon as a new government is in place.

“Ranil’s administration will have to implement further tough economic measures to raise more revenue and trim spending, to put the country’s finances on a more sustainable footing,” said Peter Mumford, head of South & Southeast Asia, at risk consultancy Eurasia Group. “This will inevitably make the new government fairly unpopular.”

Asia Securities’ Fernando said both the IMF and Wickremesinghe will have to look at keeping the social safety net in place given the acute shortages of essential items in the country. “Just raising taxes is pointless. What they have to focus on is that poverty lines don’t further deteriorate.”

5. Limiting the Presidency

Wickremesinghe has promised to follow through with proposed constitutional amendments to trim the powers of the presidency. This is a key demand from protesters and lawmakers who say the sweeping powers of the executive led to missteps in the Rajapaksa administration.

For now, Wickremesinghe is using the powers of his position to quickly appoint a new government and rein in the protests to ensure political stability and ease the path for talks with the IMF. However, analysts, including Bhavani Fonseka, a senior researcher at the Colombo-based Center For Policy Alternatives, say Wickremesinghe is pro-reform and prioritizes the supremacy of parliament, suggesting he will push on with limiting the executive presidency eventually.

The proposal has been gazetted and needs to be presented in parliament. Wickremesinghe will be able to build more credibility with the public if he brings the proposals for change to the legislature quickly.

“Considering the 22nd amendment is on the table already, it maybe something Wickremesinghe uses,” said Fonseka, “He may use reforms also to show the protesters and opposition that under his watch something will move.”

(Bloomberg)

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