Sri Lanka election: Bumpy road ahead for India

Regardless of winner, China’s deep engagement in the island’s economy pose long-term challenges for India.

Published : Jan 11, 2024 11:00 IST - 9 MINS READ

Sri Lanka’s Presidential Secretariat, when it was decorated ahead of Christmas, in Colombo on December 22, 2023. Notwithstanding the splendour of the year-end decorations in the capital, the island nation staggers under a huge burden of increased taxes and rising prices as elections approach.  

Sri Lanka’s Presidential Secretariat, when it was decorated ahead of Christmas, in Colombo on December 22, 2023. Notwithstanding the splendour of the year-end decorations in the capital, the island nation staggers under a huge burden of increased taxes and rising prices as elections approach.   | Photo Credit: ISHARA S. KODIKARA/AFP

By mid-December 2023, Colombo was lavishly decked out to celebrate Christmas. The carnival of tasteful decorations is unmissable as one walks out of the flight at the Bandaranaike International Airport. Near Colombo’s Galle Face Green, where the city congregates to wind down in the evenings, a mesmerising tapestry of serial lights and refined ornamentations embellish the main roads. Every thoroughfare is bedecked with a symphony of colours, transforming shops, hotels, and even the austere facades of government offices into resplendent bastions of festivity.

It is easy to be lulled into thinking that Sri Lanka is a secular state. It is not. “If we did not know anything about this country, we would assume that this country has some deep connection with Christianity at a very fundamental level,” a Colombo-based journalist remarked. “The fact remains that this is a Sinhala-Buddhist country, and there is no tolerance for anything else,” the journalist added.

The banners and bunting and lights are for the tourists, and Sri Lanka attracted nearly 1.5 million visitors in 2023 (though this is less than what tiny Maldives, which also depends on tourists, managed). Sri Lanka is a clean, hospitable, and largely safe destination for tourists as long as they do not take an interest in the island’s politics. In fact, the tourist visa conditions specify that the visitor should not meet politicians or engage in activities that are out of bounds for tourists.

As 2024 progresses, there are not many certainties in Sri Lanka, barring three facts: higher taxes, an increased Chinese presence, and a Sinhala Buddhist will occupy the post of President and be at the top of all critical power structures.

Also Read | Sri Lanka is far from an economic recovery

There are, however, many uncertainties. There is no firm date yet for the presidential or parliamentary elections though both are scheduled to be held before September. There is no credible political combination in sight, one that people would want to vote into power. It is also not clear if President Ranil Wickremesinghe would want to run because of the manner in which he came to occupy the post.

Sri Lankans celebrate everything, including the onset of a weekend. The dawn of a new year is one of the biggest carnivals in the island nation. But on January 1, 2024, they woke up to increased value added tax (VAT) across categories, burdening an already impoverished people reeling under rising prices, stagnant wages, and a mismanaged economy. The government increased the VAT on fuel, mobile phones, consumer products, and computers to 18 per cent. This is part of the belt-tightening ahead of foreign debt restructuring. The government says it had no option but to hike taxes ahead of an IMF review.

Melani Gunathilaka, an activist, posted on X a picture of a handful of brinjals, four tomatoes, a few green chillies, and a small piece of another vegetable, along with the picture of the bill: LKR706. She asked: “How many people are going to starve while the robbers who bankrupted the country live in luxuries?” Reports from multiple international aid agencies have highlighted the fact that the people are cutting back on nutrition and even essentials. The anger on the streets is against all politicians, not just those in power now. This correspondent heard several versions of “how the treasury was looted” from the people in Colombo and elsewhere. The conclusion in almost all these stories was that the money was parked somewhere abroad.

But the politicians in power today have insisted that this is the only way for Sri Lanka to emerge from the massive debt and foreign exchange crisis that has affected the country post-COVID. Regardless of what any Sinhala politician has to say, the credibility of the political class is at an all-time low even as the country heads to an election that will define the limits of its economic independence.

Crisis of confidence

The crisis of confidence begins at the top. Unlike previous Presidents, Wickremesinghe did not win a popular vote to get the post. He became President on the back of a constitutional technicality: he was Prime Minister when President Gotabaya Rajapaksa fled the country in July 2022. The Constitution mandates that the Prime Minister can be sworn in as President in the event of the President being unable to perform the job.

The funny bit here is that he was appointed Prime Minister because the then Prime Minister, Mahinda Rajapaksa, stepped down on May 9, 2022, following massive people protests over economic hardship and the manner in which the police and his thugs manhandled protesters. In fact, Wickremesinghe lost in the 2020 election, after having been a parliamentarian for 43 years.

Sri Lanka follows the proportional representation system, in addition to direct elections. With the votes that Wickremesinghe’s United National Party (UNP) garnered in the 2020 parliamentary election, one person from the party could be nominated as MP. As leader of the party, Wickremesinghe nominated himself, and the party endorsed the nomination on May 31, 2021. The party did not win a single seat by popular vote.

People have often told this correspondent, on his several visits to Sri Lanka, that they do not trust the politicians to ease their economic burdens. The vast majority hold the Rajapaksas, who were in power from 2019, responsible for the economic mess. (Mahinda Rajapaksa was President from 2005 to 2015; Gotabaya Rajapaksa from 2019 to 2022.) But the party created by the Rajapaksas in 2016, the Sri Lanka Podujana Peramuna (SLPP), remains the most popular combination to this day.

The two main Sinhalese Buddhist political parties, the Sri Lanka Freedom Party (SLFP) and the UNP, have been hollowed out by newer formations: the SLFP by the SLPP and the UNP by the formation of the breakaway Samagi Jana Balawegaya (United People’s Power). The UNP and SLFP are on the decline because both parties are without a charismatic leader at the head.

  • As elections approach in Sri Lanka, the people continue to suffer the fallouts of a crumbling economy and soaring inflation.
  • There is no firm date yet for the presidential or parliamentary elections though both are scheduled to be held before September.
  • No matter who wins, India will have to live with the deep engagement of China in all aspects of the Sri Lankan economy.
  • The only other certainties are higher taxes for the Sri Lankan people and a Sinhala Buddhist in the top post.

Only a Sinhala Buddhist politician is acceptable at the top

Ironically, although people view almost all Sinhalese political parties as failures, only a Sinhalese-Buddhist politician is acceptable at the top. In a country where majoritarian sentiment is deeply ingrained because of long years of Sinhala-Tamil civil war and non-stop anti-Tamil rhetoric on the part of politicians echoed loudly by the media, it is difficult to convince people that the others, the Tamil and Muslim political parties, have the best interests of all people at heart.

Of the contenders in the race, the maximum traction is now cornered by Anura Kumara Dissanayake, MP. The party he heads, the Janatha Vimukthi Peramuna (JVP), is associated with multiple armed insurrections in Sri Lanka, which is still fresh in the minds of the Sinhala population. The JVP has never been in power and has some fantastic ideas to boot. A senior adviser to the party claimed that if the coalition led by the JVP is voted to power, it would simply refuse to repay the country’s foreign debt. Former Minister Harsha de Silva was horrified. He noted on the social media platform X: “That a future JVP/NPP[National People’s Power] government will not honour Sri Lanka USD 12b debt; first insinuated by their economic adviser Prof. Anil at Ceylon Chamber and now repeated by their top economist Sunil Handunhetti goes to show these guys have absolutely no idea how to run a country.”

China’s deep engagement in the economy

Regardless of which combination wins in Sri Lanka (there is no anti-defection law in Sri Lanka, and hence the Rajapaksas are ideally placed to buy out MPs), it will be a bumpy road for India, given the deep engagement of China in all aspects of the Sri Lankan economy. Port City, the 2.6 sq km Chinese island, is almost ready and is being marketed as South Asia’s answer to Dubai and Hong Kong. Entry into this property requires using a QR code that the Chinese entity managing the island will sanction to individuals.

China also plans to build an oil refinery in Hambantota, and this will be the largest single foreign direct investment in recent times. China will also own and operate petrol retail stations in Sri Lanka, which were so far a duopoly by the Sri Lanka government-owned Ceylon Petroleum Corporation and the India-owned Lanka Indian Oil Corporation.

Also Read | Sri Lankan debt crisis to get worse if IMF prescription is heeded

One recent “victory” that India managed was to push Sri Lanka to impose a ban on Chinese research ships entering Sri Lankan ports. This announcement came just ahead of the January 5 voyage of Xiang Yang Hong 3, a Chinese research vessel, which India and the US believe is a dual-purpose platform. In an article on January 2, Global Times claimed that “the latest Indian move indicates the mounting pressure that India is exerting on its neighbour as China-India ties have dropped to a low point”.

The Galle Road roundabout near the Presidential Secretariat offers a comical insight into the India-China rivalry in the teardrop nation. “Galle Face One”, the first property on Galle Face, is an apartment-cum-residential tower and an extension of the Chinese-owned Shangri La. Right next to this complex, ITC’s hotel-cum-residence project, Ratnadipa, is coming up. This is a classic case of how clumsily Sri Lanka tries to balance the India-China relationship: both properties were sold by the Sri Lankan government to the parties concerned. Another Indian brand, Taj Samudra, which was opened in 1980, is located next to this new project. This stretch of Galle Face is possibly the only road where India appears to outshine China in terms of projects.

This reality will not change regardless of which political party or alliance is voted to power in the next election. As of now, the only recalibration of Indian strategy is seen in the manner in which India deals with the Tamils: the northern Tamils are being shunned and a minor section of the Plantation Tamils are being embraced. It is business as usual in dealing with the Sinhalese-dominated government.

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