Sri Lanka's political landscape has dramatically shifted following the stunning election victories of Anura Kumara Dissanayake and his National People's Power (NPP) alliance. The left-leaning leader clinched the presidency in September, followed by an unprecedented two-thirds majority in parliament in November. While the results signal a people's mandate for change, the road ahead is fraught with challenges as the nation grapples with economic recovery and high public expectations.
Dissanayake's victory marks the culmination of public discontent fueled by the devastating economic crisis of 2022, which saw the country declare bankruptcy and default on $46 billion in external debt. Massive protests led to the ousting of then-President Gotabaya Rajapaksa. The NPP's rise reflects voters' rejection of traditional political elites and their mishandling of the crisis.
Despite his campaign pledges to renegotiate parts of a $2.9 billion International Monetary Fund (IMF) bailout, Dissanayake acknowledged the constraints in his inaugural parliamentary address. "The economy is in such a state that it cannot take the slightest shock... The process had taken about two years, and we cannot start all over again," he stated, emphasizing the importance of adhering to the IMF deal to maintain stability.
The bailout has sparked controversy due to its stringent austerity measures, including tax hikes and subsidy cuts, which have deepened the cost-of-living crisis for ordinary Sri Lankans. Families like that of Niluka Dilrukshi, a mother of four from Colombo, continue to struggle with soaring prices for essentials. "We are still struggling to make ends meet... We are not getting any relief from the government," she lamented.
Debt management and economic relief remain key priorities for the new government. While Colombo has temporarily suspended debt repayments to conserve currency reserves, the real test will come in three to four years when repayments resume. Political analyst Prof. Jayadeva Uyangoda warns that public support for the government could wane if living standards fail to improve within the next few years.
On the foreign policy front, Dissanayake must navigate the competing interests of India and China, both of whom have heavily invested in Sri Lanka. In a strategic move, the president visited India in December, securing commitments for liquefied natural gas supplies and energy grid connectivity. He also assured Indian Prime Minister Narendra Modi that Sri Lanka would not act against India's interests.
However, balancing relations with China will be critical. Beijing's growing influence, particularly through port visits by Chinese vessels, has raised concerns in New Delhi. Dissanayake’s upcoming visit to China in mid-January is expected to clarify Beijing's expectations.
As Sri Lanka begins a new year under Dissanayake's leadership, his government faces a daunting task: transforming the sweeping mandate for change into tangible improvements for the nation. While optimism abounds, the true measure of success will lie in the government's ability to deliver economic relief, manage debt effectively, and maintain diplomatic balance in a region marked by geopolitical rivalry.