President Wickremesinghe’s case that it is a boon is seriously challenged by his rivals
The Sri Lankan presidential election, to be held on Saturday, 21 September, will serve as a referendum on how the IMF has helped or hindered Sri Lanka’s recovery from the unprecedented economic crisis that struck the island nation in mid-2022.
More precisely, it will be a referendum on President Ranil Wickremesinghe’s decision to implement the IMF’s prescriptions, given the opposition these have generated in the country.
And, as the Brussels-based International Crisis Group (ICG) put it, the election will also indicate the degree to which the 2022 Aragalaya protest movement’s demand for a “system change” still resonates with Sri Lankans.
Recent opinion polls predict serious challenges for Wickremesinghe, who is standing as an “Independent” with an assortment of political groups as his supporters.
Wickremesinghe’s election plank is the IMF package he negotiated, with the backing of India, the Paris Club of donors, and China. However, the IMF package has come under severe criticism for its prescriptions, which the opposition sees as having a disproportionately adverse impact on the poor while being soft on the wealthy.
However, the concern among Sri Lanka’s international partners is that a victory for an opposition candidate like Anura Kumara Dissanayake of the National People’s Power (NPP) or Sajith Premadasa of the Samagi Jana Balawegaya (SJB) will upset the apple cart, as these candidates seek a revision of the IMF prescriptions to better suit the needs of the poor, the constituency they are catering to.
In Western circles, there are fears that the victory of the ultra-leftist Dissanayake will adversely affect the implementation of the IMF reform programme and that Sri Lanka might once again face a crisis, reaching out to the IMF for the seventeenth time in its economic history.
A senior IMF official in Sri Lanka actually warned that any shift in government policy would have to be “realistic and achievable within the timeframe of the programme, since the country is on a knife-edged path to recovery.”
However, the upside of any such situation will be that the IMF might get a chance to make important adjustments to craft a more inclusive and equitable reform programme, so that it is welcomed in the Global South as a benevolent organisation and not as an arm of Western imperialism.
Opinion polls do not always reflect realities accurately, but those taken in Sri Lanka in the past few months do indicate widespread dissatisfaction with the economy. This is the cross that President Ranil Wickremesinghe is bearing, though he has many solid achievements to show.
In opinion polls, Wickremesinghe is seen as being behind his two main rivals, Sajith Premadasa (SJB) and Anura Kumara Dissanayake (NPP). But even so, the general feeling is that the election could be so close that the second or even third choice may have to be counted. Each voter has three choices: first, second, and third.
Wickremesinghe
Independent candidate Wickremesinghe has impressive statistics to show. Comparing mid-2022 with 2024, the inflation rate has decreased from 69.8% to 0.5%; lending rates are down from 29% to 8.25%; the price of a 12.5kg cooking gas cylinder has dropped from LKR 4,664 to 3,690; and diesel has fallen from LKR 460 to 307 per litre.
Prices of foodstuffs have also decreased drastically: wheat is down from LKR 420 to 160 per kg; lentils are down from LKR 430 to 290 per kg; milk powder has fallen from LKR 1,240 to 950 per kg; and chicken has dropped from LKR 1,506 to 1,050 per kg.
Foreign exchange reserves have increased from US$ 1.82 billion to US$ 5.65 billion, and government revenue has risen from LKR 21 billion to 31 billion.
Wickremesinghe said on Wednesday that the IMF will provide the next tranche in two weeks’ time. He also stated that Sri Lanka will be signing an agreement with private creditors to end its bankruptcy status.
In contrast to Wickremesinghe’s ability to cite achievements, his rivals have only been able to highlight the income squeeze felt by middle- and lower-income groups, especially in urban areas, and the high prices that still prevail in the market.
His opponents struggle to articulate a clear vision or a convincing platform. All they say is that if voted to power, they will place the interests of the common man at the top.
Surprisingly, they do not promise a wealth tax on the rich. Increased cash transfers to the poor are all that they offer to those in need, but they do not specify that such transfers will be better targeted to ensure that only the truly poor benefit.
However, some of their criticisms are valid, such as the fact that the IMF facility amounts to only US$3 billion to be disbursed over a three-year period and that its prescriptions are soft on the rich while asking the poor to tighten their belts.
The IMF is not the only foreign entity worried about who will come to power. Regional power India and global power the US also have reasons to be concerned. The ultra-leftist and nationalist leader Anura Kumara Dissanayake has talked about the need to restrict the import of consumer goods from India, as these dominate the Sri Lankan market. He has also stated that he will take back the 99 giant oil tanks at Trincomalee that were given to India decades ago for development and use. Dissanayake has said that he will float an international tender for them.
The Janatha Vimukthi Peramuna (JVP), which is the main component of the National People’s Power (NPP), has been virulently anti-India for decades. It cannot change its spots so easily, as anti-Indian nationalism has been its USP since its birth.
As an ultra-leftist (Marxist-Leninist) party, the JVP is anti-West and pro-China. This stance is unlikely to be favoured by the US, which is keen on drafting Sri Lanka into its anti-China Indo-Pacific alliance.
The 21 September Sri Lanka presidential election is the first in recent years when there is no “wave” in favour of one candidate or the other. The issues are deeply felt, but there is no popular anxiety to either vote out or vote in any candidate. This situation is keeping the candidates, voters, and interested parties—both within and outside Sri Lanka—on tenterhooks.
If sitting President Ranil Wickremesinghe is elected, it will be more of the same. If Sajith Premadasa is elected, his policies will be a pale imitation of Wickremesinghe’s, with a few populist elements thrown in. But if Anura Kumara Dissanayake is elected, the apple cart may be upset, though his non-leftist supporters, who want “change” for change’s sake, expect him to be less doctrinaire and more pragmatic, taking into account the realities in Sri Lanka and the world of which it is a part.