By David Brewster
It is no exaggeration to say that 2015 will be remembered as a major turning point for Sri Lanka as a nation. 

The Sri Lankan people made a decisive choice towards democracy and good governance, towards communal reconciliation and for moving the country back towards its traditional foreign policy orbit. It was a reassertion of the values that could make Sri Lanka the success story of South Asia.

Sri Lanka started 2015 with a corrupt and authoritarian regime, led by Mahinda Rajapaksa, which seemed likely to be in power for another decade. In 2009, Rajapaksa had successfully brought to an end Sri Lanka’s decades-long civil war through the ruthless destruction of the Tamil insurgency. Rajapaksa’s military victory, and regular scare campaigns about renewed Tamil militancy, gave him what seemed to be an almost permanent stranglehold over the Sri Lankan polity.

Since 2009, the Rajapaksa family had extended their hold over key political and civil institutions, undermining the whole fabric of governance in Sri Lanka. Over the years they became more and more corrupt, ultimately bordering on a kleptocracy.

Rajapaksa also moved Sri Lanka out of its traditional foreign policy orbit — that of a non-aligned country that was broadly pro-Western and generally prudent about its relations with India. In recent years, Sri Lanka’s relations with both the United States and India had become increasingly tense, largely over Rajapaksa’s refusal to reconcile with the Tamil minority or investigate claims of war crimes.

Rajapaksa became ever closer to Beijing, awarding Chinese companies profitable infrastructure projects in return for large kickbacks. The relationship increasingly extended into the security realm, including giving China control of strategic ports. Visits of Chinese submarines to Colombo in late 2014 seemed to signal that Sri Lanka may be on the way to becoming a key defence partner for China in the Indian Ocean region.


Screeching halt
But all this came to a screeching halt in January 2015. When Rajapaksa called a snap election in November 2014, the result seemed a foregone conclusion. But in a dramatic reversal he was challenged by one of his own cabinet ministers, Maithripala Sirisena. In the space of a few weeks Sirisena managed to put together a rainbow coalition and ultimately beat Rajapaksa convincingly. Rajapaksa made another run for power in Sri Lanka’s parliamentary elections in August 2015 but again was soundly beaten, allowing Sirisena and his allies to consolidate their positions.

These events are an indication that democratic instincts are deeply ingrained in Sri Lankan society. Rajapaksa’s defeat was the result of several factors: a rejection of Rajapaksa’s endless triumphalism over the civil war and his refusal to reconcile with the Tamil community, the blatant corruption of Rajapaksa and his family, and anxieties over growing Chinese influence in the country.

For his part, Sirisena has done remarkably well for someone who came to power at the head of a coalition whose main point of agreement was opposition to Rajapaksa. Sirisena signalled a new era in the governance of Sri Lanka by reversing the centralisation of power that had occurred under Rajapaksa. He pledged to only serve one term as president, transferred many presidential powers to the prime minister and established independent commissions to oversee the judiciary, police and elections. Key members of the Rajapaksa family were arrested on corruption charges.


Some important steps
The new administration also took some important steps towards reconciliation with the Tamil community. Tamils are gradually being brought back into national politics. There are plans to establish an independent domestic truth and reconciliation commission to examine atrocities committed during the civil war, as well as to compensate victims. This remains a contentious area, but the right signals are there.

Sirisena also decisively repositioned Sri Lanka’s international stance, particularly in reassuring New Delhi that Sri Lanka would take a ‘balanced’ stance and not allow itself to be used by China to threaten India. Narendra Modi made the first visit by an Indian prime minister to Sri Lanka in almost 30 years.

Sirisena has also tackled some controversial foreign investments. Plans to build huge casinos were scrapped. And the Colombo Port City project, awarded to Chinese companies under dubious circumstances, is being reviewed.

Sri Lanka’s apparent move away from authoritarianism, kleptocracy and communal division augurs well for its future. Sri Lanka is the wealthiest state in South Asia in per capita terms and despite suffering decades of civil war its social indicators are among the best in the region. Although economic growth slowed slightly to 6.3 per cent in 2015 as a result of political uncertainties, the Asian Development Bank a rebound to growth of around 7 per cent in 2016.


Prospects
If political stability and good governance can be maintained, Sri Lanka seems well positioned to take advantage of the growing economic integration between East and southern Asia. Its geographic location, educated workforce and relatively open economy make it an attractive destination for low cost manufacturing industries that are moving out of Southeast Asia and China. Sri Lanka could be a major beneficiary of China’s Maritime Silk Route initiative, which involves developing infrastructure and new special manufacturing zones, although it will need to ensure that in doing so it does not antagonise New Delhi. In the coming years, Sri Lanka has the potential to become a ‘Bengal Tiger’ to rival some of the East Asian economic tigers.

(David Brewster is a Visiting Fellow at the Strategic and Defence Studies Centre, The Australian National University)