CHALLENGES BEFORE THE NEW SRI LANKAN GOVERNMENT

The Dissanayake-led NPP has committed to reducing government expenditure, but how economic consolidation will take shape in the coming year and beyond is still unclear

- DILRUKSHI HANDUNNETTI

N 2024, Sri Lanka witnessed seismic political shifts. In the second half of this year, voters installed a hitherto untried president and a new government, with the fervent hope that the old order should give way to a better new order. It's taken the rather conservative Sri Lankan voters 76 years to move away from feudal parties and experiment with a party mostly remembered for two violent uprisings in the South. The September and November electoral results would appear to be the culmination of the 2022 political unrest that demanded a "system change".

Since the assumption of office, both the president and his government appear to have eased themselves into work without fanfare and focus on immediate tasks. The very first was to avoid disruption to normalcy. As the government marks its first month in office, it has ensured continuity through the International Monetary Fund (IMF) formula—prudent, given that the island's economy is in tatters and requires much repair.

On December 3, President Anura Dissanayake made the government's policy statement, which contained a practical acceptance of the agreement with the IMF reached by President Ranil Wickremesinghe, with a commitment to implement it in full. The President told parliament the island's economy was hanging by a thread and there was no room for any mistakes. For a man mandated to introduce radical economic and political changes to Sri Lanka, it cannot come easy. During the presidential election campaign, Dissanayake vowed to renegotiate the IMF bail-out to ensure austerity measures do not weigh too heavily on the island's poor. His was a mandate to snap out of the rejected economic model of multilateral borrowing. Easier said than done, as Dissanayake and his team soon found out.