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North, East and West: Navigating Sri Lanka's compass in new world order

Daily FT

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September 16, 2025

WHEN the National People’s Power (NPP) Government assumed office in September 2024, it inherited more than a fragile economy and the hopes of a disillusioned citizenry. It also assumed responsibility for steering Sri Lanka through arguably the most significant moment of international recalibration since the end of the Cold War.

- By Nevanka de Silva Jayatilleke

The global order is shifting once again, with China and Russia presenting themselves as alternatives to Western dominance, and smaller states forced to reposition themselves in ways that are both delicate and strategic.

Signals of a profound reordering of the international system have been apparent for some time. Early indications of this impending shift can be, perhaps, traced to the rise of far-right nationalism and systemic dissatisfaction that emerged in many parts of the world over the past decade.

For Sri Lanka, however, the challenge is especially acute. Two of its most important traditional partners in India and China are themselves locked in a delicate rivalry. The former is itself hoping to navigate turbulence in the international arena with respect to its diplomatic partners perhaps an unwelcome shock to its otherwise meticulously crafted and finely-toed foreign policy. The latter is perhaps viewed as the 'order in the wings', seeking to champion a seemingly unorthodox brand of revisionism in the world order. At the same time, Sri Lanka cannot disregard the West, whose financial institutions and diplomatic weight remain essential for its economic and foreign policy objectives.

The central question, then, is whether the NPP Government is exercising strategic foresight in navigating this inflection point, or whether it is reacting to events as they come.

The international context: A multiplex world in transition

The global system today is neither bipolar, as during the Cold War, nor unipolar, as after 1991. Scholars such as Amitav Acharya describe the emerging order as "multiplex," in which power is dispersed across multiple regions rather than concentrated in Washington, Moscow, or Beijing. While great powers retain distinct gravities, middle and small states have greater room for manoeuvre, yet also face heightened risks because alignments are fluid and institutions less predictable.

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