Rebuilding from collapse: From stabilisation to transformation

WHEN the Sri Lankan Government assumed office in 2024, it inherited a country in deep crisis — a state bureaucracy diminished by corruption, mismanagement, and elite capture. Years of short-termism, politicised policy, and neglect of national production had eroded sovereignty and self-reliant development.

- By Charith Gunawardena

Yet, the democratic transition offered a rare opportunity for renewal. For the first time in years, citizens elected a Government that promised to prioritise people and the environment promising a fair, sovereign, and sustainable economy.

Despite the election manifesto the challenge before this Government is monumental: to restore stability while rebuilding a structurally broken country. The first year necessarily focused on halting economic free-fall— continuing with the IMF program, controlling inflation, and reestablishing administrative order.

This is partly due to what the new Government inherited from the interim regime, where laws were rashly passed and agreements-in-principle with the IMF signed just days before the election, for instance. However, almost at the first anniversary of the Government it is now evident that stabilisation alone cannot deliver justice or sustainability, given the regressive conditionalities embedded in the IMF framework. The next phase must mark a deliberate pivot toward policies that restore national dignity, reduce dependency, and centre human and environmental well-being.

The inheritance

The new Government inherited deep structural weaknesses. Politically, decades of elite capture and impunity eroded State institutions. Governance under successive regimes—from Chandrika’s “Samaya saha Saubhahyaya — Peace and Prosperity” to Mahinda’s “Jathika Chinthanaya — National Ideology,” Ranil’s “YahapalanayaGood Governance”, and Gotabaya’s “Viyathmaga: Path of Intellectuals”—served to entrench families and business interests whose financial and media influence shaped policy. Furthermore, patronage and nepotism corroded the civil service, while parliament became secondary and the judiciary weakened.