The demand for a presidential election has been a key call from the public in Sri Lanka since the dramatic ouster of former President Gotabaya Rajapaksa in July 2022. The country’s Election Commission has now announced that the election will take place on September 21, 2024.[1] The president will be elected through a public vote. The candidate who secures at least 50% of the votes will become the president.
This once prosperous country, second only to Japan in Asia, has faced severe economic difficulties, leading to a sovereign debt default in 2022, which led to a change in government. The new administration is expected to focus on strengthening the economy, and on recovery.
Voters are demanding concrete solutions to the ongoing economic challenges which include reducing the tax burden on the middle-class working population, ensuring price stability, and keeping inflation steady. Developmentally, Sri Lanka has slipped into poverty, with just 11% under the poverty line in 2019 to 24.8% in 2024 ($3.65 per day in 2017 PPP terms). People seek a return to pre-2022 prosperity when GDP was $88.5 billion with 4.2% growth.
The new president will also have to address older and long-term issues: a reduction in corruption, accountability for economic bankruptcy, an effective bureaucracy, constitutional and economic reforms, and addressing the long-standing ethnic issue through the implementation of the 13th Amendment to the constitution.[2] Citizens want legal action against the perpetrators of the 2019 Easter Sunday attack, the ongoing investigation of which has been criticised by the victims’ families and civil society alike for procedural delays, lack of transparency and political interference.
Three candidates are considered critical players in the race: the incumbent president, Ranil Wickremesinghe; opposition leader, Sajith Premadasa; and Anura Kumara Dissanayake, leader of the National People’s Movement. Also in the running are Namal Rajapaksa, son of former president Mahinda Rajapaksa, and businessman Dilith Jayaweera.
President Ranil Wickremasinghe, leader of the United National Party (UNP), is an experienced hand. He has been Prime Minister five times and was the party’s presidential candidate in 1999 and 2005 but was defeated by Sri Lanka Freedom Party nominees Chandrika Kumaratunga and Mahinda Rajapaksa, respectively. For the first time in his political career, Wickremesinghe is running as an independent candidate, as his UNP, among Sri Lanka’s oldest political parties and which has governed the country for 38 of 76 years of its independence, is not participating in this election after failing to secure more than a single seat in the 2019 parliamentary[3] election.
Regardless, Wickremesinghe has received substantial support from Members of Parliament (MPs) belonging to the current ruling party, the Sri Lanka People’s Party (SLPP), as well as from MPs of the Sri Lanka Freedom Party (SLFP). It is not surprising that SLPP MPs have backed Wickremesinghe, who they voted for in 2022. However, significant differences in political and economic policy perspectives exist between the UNP and both SLPP and SLFP. Although the SLFP split from SLPP, politically, both continue to advocate for state intervention and nationalisation and oppose market-oriented economic policies despite this leading to economic mismanagement and bankruptcy in 2022. This will most likely impact the SLPP’s support base: Sri Lankans will not forget the economic crisis and delayed approach to the IMF by the current ruling party anytime soon.
Nonetheless, even as SLPP MPs are extending their support to Wickremesinghe, the party has reverted to form, nominating former Minister of Youth and Sports and current MP Namal Rajapaksa, the son of former President Mahinda Rajapaksa as their presidential candidate. It is not clear if the SLPP MPs will ultimately shift their support back to Namal Rajapaksa or if this move is simply to ensure that the Rajapaksa family remains influential in politics.
External engagement with Sri Lanka will play a role in the elections. Chinese investment inflows and debt to China increased significantly during the SLFP/SLPP era. Many of these are non-performing, with no return on investment. Examples include the Hambantota Port, Mattala Rajapaksa International Airport, and the Lotus Tower, which have sent Sri Lanka into a debt trap. The commercial debt owed to China still needs to be restructured, with no clear timeline for when this might occur.[4]
Closer to home is India, the first country to assist Sri Lanka, providing an extended lifeline of over $4 billion and a $1 billion credit line to help the country tide over the immediate crisis. This is being deepened: India’s Neighbourhood First policy emphasizes expanding social developments and trade between the two nations and encourages Indian investors to invest in Sri Lanka. Over the past year, Indian developmental assistance has financed the expansion of the Palali Jaffna Airport, while the private Adani Group has invested $700 million in a terminal of the Colombo port, and $1 billion in a renewable energy project in Mannar in northern Sri Lanka.
The communist NPP, formerly known as the Janatha Vimukthi Peramuna (JVP), led by Anura Kumara Dissanayaka[5] has garnered public support, particularly among the younger generation, who appreciate the party’s strong stance against corruption, unethical trade practices, and holding politicians accountable for leading the country into bankruptcy. The NPP is cautious about Sri Lanka’s engagements with China, particularly on large-scale investments and loans, and is also critical of India’s involvement in Sri Lanka. However, Dissanayaka’s recent visit to India in February 2024, highlights the importance of a bi-partisan strengthening of the India-Sri Lanka relationship. Nonetheless, the party has yet to clearly articulate specific solutions for economic recovery.[6]
Finally, there is Sajith Premadasa of the SJB who leads the opposition in the Parliament. The son of the former president Ranasinghe Premadasa and is running for the presidential election for the second time. The SJB, formed by former members of the UNP, is in an alliance of minority parties, including the Sri Lanka Muslim Congress (SLMC) and the Tamil Progressive Alliance (TPA). This alliance traces its political views back to the liberal-conservative principles of the UNP, though the SJB has gradually shifted towards a more progressive and democratic political centre over time.[7]
The SJB has emphasized a market-oriented economic framework that encourages private sector participation and investment. The party supports significant engagement with the IMF, advocating for the IMF to provide better terms and to ensure transparency in the program. His team comprises economist and SJB MP Dr. Harsha De Silva who is seeking greater IMF intervention, arguing that its terms are insufficient for building an export-driven economy and making Sri Lanka more competitive globally. Premadasa is confident in his economic credentials to reform the economy, presenting a contrast to the JVP-led NPP.
The outcome of the election will be a vital factor in determining the continuity of the current IMF program. Disrupting the IMF’s Extended Fund Facility (EFF) could threaten the country’s economic recovery. Implementing economic reforms based on a market-oriented framework will enhance productivity by transitioning to an export-oriented economy, aiming for 5% to 6% economic growth over the next five years, up from 2% in 2024 (forecasted by IMF for 2024).[8]
The main goal for the next president of Sri Lanka must be a laser focus on fiscal discipline. Its 2025 budget must achieve a primary balance target of 2.3% of GDP, critical for restoring debt sustainability.[9] The continuation of reforms and anti-corruption efforts is essential to build confidence among foreign investors, thereby boosting external investment inflows that can put Sri Lanka back on an even keel.
Kamalaharan Shanmugam is Research Assistant, Gateway House.
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References
[1] Election Commission of Sri Lanka. (2024). Presidential Election – 2024. Colombo: Election Commission, Election Secretariat.
[2] Yashee. (2023, July 30). PM Modi urges Sri Lanka President to implement 13th Amendment: What is it, why India cares: https://indianexpress.com/article/explained/explained-global/what-is-sri-lanka-13th-amendment-8861936/
[3] Traditionally and historically, parties nominate their presidential candidates, but a candidate can run for the presidential election as an independent candidate without being affiliated with a political party.
[4] Public finance.lk. (2024). Debt Trap Lessons. Colombo: https://island.lk/debt-trap-lessons/.
[5] Keethaponcalan, S. I. (2023, March 23). Sri Lanka’s Marxist JVP In The Presidential Election. https://www.eurasiareview.com/23032024-sri-lankas-marxist-jvp-in-the-presidential-election-oped/
[6] Jayasuriya, R. (2024, January 24). What is the JVP’s Economic Policy? Retrieved from www.dailymirror.lk: https://www.dailymirror.lk/opinion/What-is-the-JVPs-Economic-Policy/172-275600
[7] Daily FT. (2024, August 5). www.dailyft.lk. Retrieved from SJB calls for equal debt treatment, sign on IMF proposal post-election,https://www.ft.lk/front-page/SJB-calls-for-equal-debt-treatment-sign-on-IMF-proposal-post-election/44-765166
[8]IMF. (2024, August 2). IMF Staff Concludes Visit to Sri Lanka. https://www.imf.org/en/News/Articles/2024/08/02/pr24298-sri-lanka-imf-staff-concludes-visit#:~:text=The%202025%20Budget%20needs%20to,restoring%20Sri%20Lanka’s%20debt%20sustainability.
[9] Wignaraja, G. (2024, May 05). It may take 10 years to emerge from crisis. Retrieved from www.themorning.lk: https://www.themorning.lk/articles/tTdeyntFg0BdUtJqVCzA