New Sri Lanka president needs to balance campaign promises with debt obligations, say analysts

Anura Kumara Dissanayake’s stunning victory in Sri Lanka’s presidential election on Saturday (Sep 21) represents a seismic shift to the left in the nation’s political landscape.

Yet, observers noted his win came as little surprise, as voters punished the incumbent as resentment simmered over years of government corruption and economic mismanagement.

Sri Lankans have pointedly rejected established parties and given Dissanayake a clear mandate on reforms, said analyst Asanga Abeyagoonasekera.

“It is a historical election for the Sri Lankan people. They want a new beginning,” added the executive director of the South Asia Foresight Network at think tank The Millennium Project.

The election was the nation’s first since its economy buckled in 2022.

NEW LEFTIST PRESIDENT

The Marxist-leaning 55-year-old was sworn in on Monday after securing the election with 42.3 per cent of ballots – nearly 1.3 million more votes than his nearest rival, opposition leader Sajith Premadasa. 

Michael Kugelman, director of the South Asia Institute at think tank Wilson Center, called the result of the election “striking”, and a “drastic change” in Sri Lankan politics.

“Dissanayake is so different from the other candidates. He has always projected himself as a maverick who wants to shake things up,” he said.

The biggest challenge faced by the newly minted president – by far – is steering the nation out of its economic misery, said analysts.

Millions of Sri Lankans are grappling with cost-of-living woes and low income amid crippling international debts.

Dissanayake now has his work cut out as he strives to balance campaign promises with debt obligations.

“He has made all these promises to move quickly so he's going to be under the gun and facing a lot of pressure,” said Abeyagoonasekera.

“The economy will be the major focus for him right off the bat.”

WHY DID VOTERS CHOOSE DISSANAYAKE?

Dissanayake is hardly a new face in Sri Lankan politics. He ran for the 2019 presidential election and won just 3 per cent of the country's voter base.

This time, Dissanayake and his party pulled a remarkable turnaround by capitalising on public outrage against the government and attracting youth votes, said observers.

“Dissanayake’s role in the anti-government movement elevated his prominence and made him into a formidable political figure,” Kugelman told CNA938’s Asia First on Monday.

“Young people are very attracted to his focus on anti-corruption and getting rid of dynastic politics,” he added.

He was referring to the Rajapaksa family, which held a vice-like grip over Sri Lankan politics until mass protests in 2022 over the economic meltdown ousted then-president Gotabaya Rajapaksa and prime minister Mahinda Rajapaksa.

Voters rallied behind Dissanayake despite the controversial past of his Janatha Vimukthi Peramuna (JVP), or People's Liberation Front party. In the 1980s, it led failed uprisings that left tens of thousands dead.

He has since apologised for the party’s violence, but concerns remain on what role the JVP might play.

“He has given every indication that he will rule democratically. But given the democratic challenges that Sri Lanka has faced in recent years, some may be sceptical,” said Kugelman.

AUSTERITY MEASURES VS IMF CONDITIONS

Sri Lanka is still reeling from its worst financial crisis in decades and hardships imposed by a stringent bailout from the International Monetary Fund (IMF).

The US$2.9 billion package came with spending cuts and tax hikes that have left millions struggling to make ends meet.

Dissanayake has said he will go against some conditions set by the IMF loan in order to fulfil his campaign promises of lower taxes and utility bills, and negotiate with the fund for a better deal.

“He has been very adamant that he supports the current IMF plan that Sri Lanka has, but he feels it should be renegotiated so that it doesn't hurt the poor as much,” said Kugelman.

“However, that's bold and risky, because Sri Lanka really needs that funding and support. If the IMF is not interested in renegotiating, that would not make him look good.”

Dissanayake is expected to dissolve parliament within 45 days, which would help him seek a fresh mandate for his proposed policies.

CAN THE RAJAPAKSAS RETURN?

If the economic fortunes of Sri Lanka do not improve, the Rajapaksas may be able to find a way to return to the forefront of politics, experts said.

“The election has put an exclamation point on what has become the end of the Rajapaksa (era). But one could never write off dynastic families,” said Kugelman.

“If things play out in a way that does not benefit the new government, if the economy continues to sputter, if Dissanayake struggles to really stabilise it, that could make the public impatient.”

However, given the disdain  – especially among youth voters – against the Rajapaksas on their policies, corruption, and failures in handling the economy, Kugelman added: “It would take a lot for there to be a situation where the Rajapaksa family could make a successful comeback anytime soon.”

Meanwhile, Abeyagoonasekera said Dissanayake is inexperienced, and despite his popularity at the current polls, his abilities remain to be tested.

He added that Dissanayake needs to sustain the work of previous president Ranil Wickremesinghe, who took office at the peak of the 2022 economic collapse. He brought about relative stability with the IMF deal and reduced inflation, but remained unpopular due to his close ties with the Rajapaksas.

“(Dissanayake and his party) are a first time (government). In their campaign, they managed to channel public anger and (use) economic deprivation as a political (tool)… but can they sustain that stability achieved by the (previous) government? I'm not so optimistic about that,” Abeyagoonasekera said.