Days after thousands of agitators stormed his office and set his house ablaze -- amid serious demand for his resignation as the prime minister -- Ranil Wickremesinghe ruthlessly conquered the presidency of Sri Lanka.
In the parliamentary election on July 20, Ranil Wickremesinghe obtained 134 votes while his rival Dullas Alahapperume secured 82 votes, with Anura Kumara Dissanayake receiving three votes.
Wickremesinghe’s presidency is going to be the most challenging in Sri Lanka’s history. The dystopian situation across the state is arguably worse than even during the civil war-era. The nation of 22 million has been crippled by severe scarcity of fuel and shortage of food as well as other essential commodities, with foreign reserves all but depleted.
At the end of 2019, the island nation had $7.6bn in foreign currency reserves, which since then have come down to just $250m. At present, the export volume of the state is terribly low in comparison to its foreign consumption or imports. The state’s import value is estimated to be worth $3bn. More volume import than export is one of the major reasons for the shortage of foreign currency.
Sri Lanka owes more than $51bn to foreign lenders. Out of the amount, some $6.5bn to China. Almost 10% of the total debt is from China. And then, there were additional hidden taxes.
President Ranil Wickremesinghe will have a slew of burdens on not just the economic front but also on the political and diplomatic fronts. He has threats from home and abroad, which he can’t escape easily. Calming down the outrage across the nation is his first challenge.
He doesn’t have any option rather than managing homegrown rebellion and gaining the trust of the compatriots in a cordial way.
Ranil Wickremesinghe has not unseated the Rajapaksas. Rather, Goatabaya’s exit favoured his luck. In the 2022 general election, the Sri Lanka Podujana Peramuna (SLPP) obtained two thirds of the majority and UNP obtained just one, which earlier had 105 seats in the parliament. He will have to maintain a safe distance from not only his predecessor Gotabaya Rajapaksa but also the Rajapaksa clan.
As the country's currency depreciates at a rapid rate, Sri Lanka is undergoing a bitter high inflation rate; about 360 Sri Lankan rupees now makes one US dollar. Millions in the nation are struggling to make their ends meet. Instead of three times a day, Lankan citizens are having meals twice a day. Some are surviving on just a meal a day.
According to the experts, the Sri Lankan crisis is the result of a pair of deficit issues. An unstable fiscal deficit as well as unstable current account deficit are to blame for its fate. The economic mismanagement has led the country to this condition. Taxation policy by the Rajapaksas was one of the issues.
In order to fix the economy, Wickremesinghe needs to gain support from the West in addition to the IMF. And of course India’s as well. India has sent essential items and petrol and 44,000 tons of urea to Sri Lanka. India is also helping the neighbouring state to negotiate at the IMF, despite Sri Lanka earlier having irked New Delhi several times.
Just hours ahead of the coronation of the new Sri Lankan president on July 20, Kristalina Georgieva, managing director of IMF, assured early complementation of the rescue talks. The IMF may pump $3bn into the crisis hit economy in loan.
Once it manages to get complete support from the IMF, western capitals are expected to extend financial support. The countries of the West are waiting for a stable incumbency in Colombo. Wickremesinghe, a six-time prime minister and former finance minister, is a known face to the Bretton Woods institution. With his assumption of presidency, Sri Lanka has a fair chance of a faster negotiation.
During his tenure, Colombo is bound to bring a rainbow of policy changes. The equation with Beijing is one of them. President Wickremesinghe can’t maintain bonhomie with Beijing as his predecessor did. He also has to be careful in dealing with the US. For the supply of oil, the island nation must continue talks with Russia and Qatar.
In 1991, India terribly suffered from a balance of payment crisis. India then had a visionary Prime Minister PV Narasimha Rao, who liberalized the economy and attracted foreign investments. The policy paved India’s way to cross the GDP mark of $2.5 trillion.
In a televised interview, Central Bank of Sri Lanka Governor Dr Nandalal Weerasingh said he is confident that Sri Lanka would come out of the economic crisis within five months. Despite nationwide outrage, a section of Lankan elites have faith in Wickremesinghe.
The opportunity Wickremesinghe still has is to listen to the economists and IMF. Reforming policy and economy is not easy, but that's the only way Sri Lanka can get out of the trouble and trauma.
Ayanangsha Maitra is an Indian journalist and associated with Centre for Governance Studies, Dhaka.
