Whoever it is, follow Ranil’s blueprint for stability

Despite being an unpopular figure in the traditional political sense, Wickremesinghe has showcased a practical and solid approach to governing, especially during his short tenure

One of the two opposition leaders is likely to win the presidency, but their ability to sustain the progress made under Wickremesinghe is uncertain; the real question is whether they will adhere to the path of economic reform and stability that Wickremesinghe has set or if they will undermine it 

Often, elections are shaped more by emotional impulses, rumours and popular narratives rather than a reasoned assessment of a candidate’s capabilities, policy initiatives or leadership qualities. This trend underscores the complex nature of electoral politics, where leaders with proven track records or sound economic strategies can be overlooked in favour of those who resonate more with ‘change’ or short-term promises. ‘Promises minus clear means of fulfilment are empty.’

Sajith Premadasa and Anura Kumara Dissanayake recognised that the complex task of stabilising the country’s economy and handling sensitive international negotiations was beyond their competencies. Faced with the magnitude of the crisis, they were wary of engaging in the difficult and often unpopular reforms required to address the situation.

Ranil Wickremesinghe has his own shortcomings too. As Prime Minister in 2016, he was criticised for attempting to cover up the bond scam involving his associate by encouraging Sujeewa Senasinghe to write a book and Harsha de Silva and others to make footnotes denouncing the findings of the Committee On Public Enterprises (COPE). He was involved in administrations led by J.R. Jayewardene and R. Premadasa, during which many undemocratic events occurred, including killings, disappearances and large-scale election rigging.

Premadasa and Dissanayake expected that by the time the country stabilises, widespread public discontent over economic difficulties will persist; they planned to capitalise on this, presenting themselves as champions of the people’s frustrations, holding Wickremesinghe responsible for financial burdens

However, despite being an unpopular figure in the traditional political sense, he has showcased a practical and solid approach to governing, especially during his short tenure. Wickremesinghe as President has taken bold steps to steer the country towards a path of recovery, focusing on the critical need for fiscal discipline. The country’s heavy reliance on borrowing and spending — an unsustainable strategy that contributed to its economic decline — has been acknowledged and confronted head-on by Wickremesinghe. 

The introduction of tough, sometimes unpopular measures like increased taxes and austerity policies, reflects his commitment to the long-term stabilisation of Sri Lanka, despite knowing these moves would not win him favour with the electorate in the short term. It is a clear example of leadership that prioritises national interest over political convenience. These policies, although challenging, are necessary to rebuild a country grappling with severe financial constraints, and they lay the groundwork for future growth.

While it can be difficult for the public to grasp the long-term benefits of these policies, especially in the face of immediate hardships, it’s clear that Wickremesinghe’s vision prioritises sustainable development over short-term populism. Whether or not he retains power, he certainly deserves recognition for navigating Sri Lanka through a challenging period with a focus on structural reforms. A key pillar of this recovery was his strategic engagement with international financial institutions and global partners. Wickremesinghe’s clear communication and firm stance on reforms have defused much of the discontent agitators aimed to exploit. Despite economic hardships, the public seems to recognise that further unrest could worsen the situation and is giving his government the space to continue its recovery efforts, helping to prevent another wave of protests.

In addition to the International Monetary Fund (IMF),Wickremesinghe built strong relationships with key stakeholders like The Paris Club and the Exim Bank of China. These partnerships were vital for restructuring Sri Lanka’s external debt, easing pressure on the nation’s reserves. His ability to balance relations between China and Western nations demonstrated skilled diplomacy, securing both financial aid and debt agreements. Wickremesinghe’s overseas tours reinforced Sri Lanka’s global standing, attracting investment and strengthening trade ties, all essential for long-term recovery and economic growth.

Whether or not the electorate fully appreciates or supports Wickremesinghe’s policies at present, history may view him more favourably as a leader who made difficult but necessary decisions when they were crucial

Wickremesinghe’s domestic reforms were key to Sri Lanka’s recovery. His policies aimed to raise revenue through tax reforms, cut public spending, and improve efficiency, addressing economic weaknesses to reduce reliance on borrowing. Sri Lanka’s recovery reflects his leadership, diplomatic skill and clear vision. He  has placed Sri Lanka on a more stable path toward economic revitalisation, though full recovery will take time.

In April 2022, Sri Lanka faced its first sovereign default since gaining independence from Britain in 1948. Despite enduring significant hardships, the country has made strides in its economic recovery, largely due to public support for a long-term national rebuilding plan. Wickremesinghe, now minus the Rajapaksas, reassures the nation, stating, “As we continue on this path, difficulties will ease, the cost of living will reduce, and the economy will strengthen.”

The three-member Academic-Economist team from the National People’s Power (NPP), when questioned by the TV convener on Friday’s English programme about the potential revenue loss from their proposal to raise the tax threshold from 100,000 to 200,000, found themselves unable to respond. The uncertainty extends to how they will guide Finance Minister Sunil Handunnetti. Similarly, it’s unclear if Premadasa would defer to his newly engaged economist — who narrowly avoided a jail term, thanks to the Rajapaksas — or rely on his existing expert economic team led by Harsha de Silva for advice.

The president has guided the country through a period of severe shortages and extended power cuts. His government continued to grapple with external debt restructuring, and rising taxes making him unpopular. Meanwhile, Premadasa and Dissanayake who distanced themselves during the nation’s crisis have pledged to remove him, accusing him of suppressing democratic dissent and imposing an economic burden on the public.

Their strategy relied on timing. They expected that by the time the country stabilises, widespread public discontent over economic difficulties will persist. They planned to capitalise on this dissatisfaction, presenting themselves as champions of the people’s frustrations and holding Wickremesinghe responsible for the financial burdens faced by citizens. Their aim is to leverage the majority’s grievances, especially among those who may not fully grasp the intricacies of economic recovery, to promote themselves as the solution. By doing so, they hope to redirect the narrative, casting Wickremesinghe as the cause of the nation’s economic troubles while positioning themselves as the capable leaders who can provide relief, despite their earlier avoidance of the crisis.

One of these two opposition leaders is likely to win the presidency, but their ability to sustain the progress made under Wickremesinghe is uncertain. The real question is whether they will adhere to the path of economic reform and stability that Wickremesinghe has set or if they will undermine it. There are concerns that they might attempt to disrupt or abandon the ongoing agreements with the IMF. Such actions could jeopardise the carefully structured recovery programme that has been put in place.

The IMF has already issued warnings about the risks of any significant deviations from the agreed-upon reform programmes. If these leaders were to interfere with these crucial arrangements, it could potentially derail the economic recovery process and plunge the country back into severe financial difficulties.  

Meanwhile, a selloff in Sri Lankan dollar bonds intensified a week ago ahead of the elections. This prompted investors to reduce exposure. The 2030 bonds dropped 3 cents to 49.9, a 15% fall from their yearly peak, while 2027 bonds fell over 1 cent to 49.6. With elections on September 21, investors worry a leadership change could disrupt near-finalised debt talks. The challenge for the incoming leader will be to navigate this complex landscape responsibly, maintaining the course that Wickremesinghe has charted. 

Wickremesinghe’s recognition of the need to modernise Sri Lanka’s economy, control spending, and foster greater economic productivity shows his deep understanding of what is required to secure the country’s survival. Whether or not the electorate fully appreciates or supports his policies at present, history may view him more favourably as a leader who made difficult but necessary decisions when they were crucial. Dinesh Gunawardena and his team deserve recognition for their unwavering support throughout this challenging period.