Presidential elections in the tiny island nation of Sri Lanka in South Asia brought a leftist coalition to power. The elections were held in September 2024. This was followed by parliamentary elections in November 2024. In both contests, the left-leaning candidate Anura Kumara Dissanayake and his political coalition, the National People’s Power, won decisively. This blog will contextualize the economic events that enabled the coalition’s victory and analyse the reasons why this electoral result is of historical significance for Sri Lanka.
Parliamentary elections in the Democratic Socialist Republic of Sri Lanka were held on November 14, 2024. The National People’s Power (NPP) secured a significant victory, winning 159 out of 225 seats, giving the party a clear two-thirds majority. In the presidential election held in September, NPP leader Anura Kumara Dissanayake, commonly known as AKD, emerged as the winner. The NPP is a newly formed political coalition, established in 2019. It was created by members of the old leftist party, Janatha Vimukthi Peramuna (JVP), and includes various other groups, such as political organizations, women’s rights advocates, and workers’ unions. Before 2024, the NPP was a relatively weak third coalition, with JVP holding only three parliamentary seats in the outgoing Parliament. This blog will analyse the economic events that contributed to the favourable conditions for the NPP’s victory.
Political Elite and the Economic Crisis
Gotabaya Rajapaksa was elected president in the 2019 election. After his victory, his brother Mahinda Rajapaksa was appointed Prime Minister. Several other members of the Rajapaksa family also secured key positions in the newly formed government.
The government initially succeeded in managing the first wave of COVID-19. However, during the second wave, the impact on the economy became evident as conditions deteriorated. Subsequently, the government also decided to ban chemical fertilizers to become the world’s first 100% organic farming country. This decision led to widespread protests from farmers. As a result of the ban, agricultural yields decreased, leading to shortages of essential food items. In September 2021, the government declared an economic emergency, which granted it special powers to control food prices and prevent the hoarding of essential goods. Import restrictions were also implemented as foreign reserves dwindled. One of the country’s primary sources of income is tourism, but fear of the COVID-19 Delta variant further hampered revenue generation.
Amid economic instability, reports surfaced regarding money laundering activities by Aspen Medical, an Australian company involved in the construction of Hambantota General Hospital during Mahinda Rajapaksa’s presidency. Gotabaya Rajapaksa’s decision to eliminate certain compulsory taxes for some private-sector employees lead to a decrease in government revenue. These factors forced the country to incur debt, amounting to $50 billion, with $6.9 billion due in 2022. Most of these loans were taken out for large-scale infrastructure projects, including an international airport, a convention centre, and a cricket stadium, all financed by China at commercial interest rates.
A combination of factors—nepotism, close ties with the wealthy, and personal corruption—widened the schism between the people and their leaders. Eventually, protests erupted against the government due to its mishandling of the economic crisis. As demonstrators stormed the official residences of the President, the leaders fled the country.
International Monetary Fund
The International Monetary Fund (IMF) has agreed to provide the country with financial assistance through its Extended Fund Facility, amounting to $2.9 billion. The objectives of this new IMF program include measures such as – restoring macroeconomic stability and debt sustainability, safeguarding financial stability, protecting vulnerable communities, addressing corruption, and unlocking Sri Lanka’s growth potential
While loans from international financial institutions like the IMF are crucial for the long-term stability of the nation’s economy, the immediate impact of austerity measures and restrictions on government spending significantly affects the population. During this ongoing economic crisis, the general public is seeking immediate economic relief.
The minority equation
The insurgency by the Tamil minority, which demanded autonomous territory in the northern and eastern parts of Sri Lanka, began in 1983. Gotabaya Rajapaksa won the presidential election in 2019 largely due to his popularity as the defence secretary during his brother Mahinda’s presidency. The conflict was ended through a military campaign against the Tamil Tigers, and at high cost to the civilian populace in 2009. While the Rajapaksa regime was celebrated for ending this prolonged conflict, their political ideology revolved around majoritarian politics, primarily dominated by the Sinhalese Buddhist population. They failed to advance beyond this narrative and neglected the grievances of minority groups. The Report of the Secretary-General’s Panel of Experts on Accountability in Sri Lanka, appointed by United Nations Secretary-General Ban Ki-moon, investigated alleged human rights violations that occurred during the final stages of the war, involving both the Sri Lankan military and the insurgent groups. The Sri Lankan government, however, has rejected this report.
The Appeal of NPP and its Leader AKD
A relatively new political party, led by an unblemished politician, has emerged as a favourite among the people in this election. AKD campaigned on real issues affecting the public, such as the struggle with the economy and the importance of unity.
The victory of the NPP can be seen as a rejection of the austerity reforms implemented by the previous government, which were negotiated with the IMF in favour of corporate and private sector interests. The primary support base of the NPP, consisting mainly of workers, will be the most adversely affected if the proposed austerity measures by the IMF are put into effect. However, securing a bailout from the IMF is essential for reviving the island’s economy. One of the main challenges facing the new government will be how far the winning coalition is willing to renegotiate with the IMF to maintain the support of its base.
AKD appealed to minorities by pledging to release previously held government lands to the Tamils. The regional Tamil parties were divided and reiterated their consistent messages, highlighting the human rights abuses and genocidal actions inflicted on Tamil insurgents by the national government during the conflict. The minorities were cautious about these approaches from regional parties. It is important to note that the JVP, one of the primary coalition partners of the NPP, has a violent history and previously opposed Tamil autonomous regions. Despite this, the minorities recognized that the NPP was not directly responsible for the massacres. For the first time, Jaffna, a Tamil stronghold that has never supported the national party, voted for the NPP.
Despite his leftist ideology, he actively sought the support of the largest religious community, the Buddhists. He encouraged the people to rise above their ethnic identities, which have often been politically exploited for vested interests. He successfully created a shared platform for these diverse communities and their various demands. Since Buddhists constitute a dominant group, it was prudent for AKD to align their demands with his ideological framework.
The recent developments in Sri Lanka are significant. Around the world, many nations are gravitating towards a more right-wing ideological discourse, while this small island nation in South Asia has opted to move towards the left. The political movement, identified as the NPP, successfully rallied the public around its proposed economic alternatives. The citizens also embraced a new system that prioritized economic stability and national unity over popular appeals and empty promises. The people of Sri Lanka were eager to move beyond the professional politicians they had trusted for too long, who had repeatedly failed to genuinely address their concerns. The question is if this new force can stabilize Sri Lanka and perhaps establish a new pathway for other countries suffering from political violence rooted in economic crisis and ethnic tensions.
Suparna Banerjee
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