Sri Lankan President Ranil Wickremesinghe is currently on a mission to expeditiously restructure debt with multilateral and bilateral creditors. His government has been trying to push an International Monetary Fund bailout and negotiate with multilateral and bilateral lenders to give the island economy some breathing space and steer towards a semblance of recovery.
The island’s financial woes were in the making for years but Covid-19’s crippling effect on tourism, which was a USD 4.66 billion-sector in 2019—and the shocking financial mismanagement of the Gotabaya Rajapaksa administration—dealt a deadly blow to the island economy, triggering the worst financial crisis post-Independence. Forced to declare insolvency, the debilitating financial crisis has also brought out into the open Sri Lanka’s unaddressed and increasing political crisis.
President Wickremesinghe who likes to style himself as a ‘crisis president’, has meanwhile managed to pull off a preliminary staff-level agreement with the IMF for a USD 2.9 billion agreement under its Extended Fund Facility (EFF), which is operational for a 48-month period. Japan, one of Sri Lanka’s main creditors, has stepped in to support the island by leading discussions on restructuring a USD 30 billion foreign debt and helping draw it out of its crippling debt crisis. Japan has also highlighted two drawbacks: inconsistent financial policies and procedural obstacles. Its message is a reminder of the ill-fated light rail project funded by Tokyo, which was mysteriously shelved under a cloud, creasing the relationship between the two friendly nations during Rajapaksa rule.
Even if the current dispensation were to effectively restructure its debt, it would be incomplete without a positive role being played by China and India. China is reluctant to restructure and has significantly opaque bilateral arrangements which are treated on a case-by-case basis. India has emerged as Sri Lanka’s largest creditor in the past year when the crisis hit the island and it turned to its closest neighbour for assistance.
While negotiations continue, what appear to have gone missing are the critical details. Sri Lankans who hit the roads in recent months demanding systemic overhaul are now treated to the debt restructuring spectacle of the most opaque form.
Beyond a general understanding and the press statements, the processes have remained opaque in the eyes of a nation that worries about the consequences and watches with trepidation. While it comes as no surprise that Wickremesinghe is in the “too busy” mode and makes announcements through his media arm, this lack of transparency is not something the Lankans accept—especially after the economic debacle the island is currently living through. People continue to demand answers for what the troubled island nation is locking itself in, with the agreements that are being reached and the negotiations currently underway.
It also highlights how power can (not just the crisis situation) change the outlook of politicians. Wickremesinghe, in his previous avatar as prime minister, was responsible for pushing the 19th Amendment in the constitution to depoliticise key public institutions and to guarantee through an act the people’s right to information, which is considered one of the best RTI laws in the world. Instead, his ascendancy to power has been marred by authoritarian acts of curb and control through the excessive use of law, oppression tactics, and arresting of protesters in large numbers. It is almost like a form of political revenge, with the Wickremesinghe administration snuffing out forms of dissent.
Wickremesinghe has tried to demonstrate to the world that he is fully focused on addressing Sri Lanka’s financial crisis at least in the short-term. But to assert control over a people who in large numbers demonstrated against the former administration, conveying that politicians hold power at the will of the people, the new president is using all tactics in his arsenal to crush all forms of protests.
The Wickremesinghe doctrine, it seems, is a shifty, opaque one. The man who has tried to portray himself as a principled liberal democrat has turned into an authoritarian president who brooks no opposition. This arrogant lack of inclusivity had cost him his own political future and splintered his United National Party (UNP), reducing it to a party without parliamentary seats except one, based on the percentage polled.
Having crushed the rebellious mass protests through a spate of arrests and the declaration of curfew, he also had the now world famous ‘GotaGoGama’ protest venue dismantled. Some protestors are now eating out of his palm and prominent others belonging to different political hues are under arrest. From those who plunged into the presidential pool to others who sat at the mahogany table at the presidential palace, protesting youths have been dealt with severely.
In the meantime, the man who triggered a massive public outcry against his failure to rule, provide Sri Lankans with the basics, and refused technical advice to avert a massive economic fallout has gone scot-free. Gotabaya Rajapaksa has been country-hopping—looking for a safe haven—but the response to the search for a new or a temporary home has not generated much sympathy or support for the runaway president. Thanks to Wickremesinghe, he has managed to quietly slip into the country and not experience significant resistance.
If the young protestors have to pay the price for demanding systemic change and regime change in the face of the island’s worst economic downfall, the least Sri Lanka could do is to initiate a genuine process to identify both people and processes that caused the island irreparable harm, threatening the well-being of 22 million people. Ranil Wickremesinghe may be “restricted” in many ways, having to rely on the SLPP’s mandate to continue as president.
But political arrangements apart, the islanders deserve answers as well as accountability for what they find themselves in today. No amount of debt restructuring or long-term planning can address the democratic deficit and the systemic issues that the country has witnessed in recent years—Sri Lanka ran Asia’s largest nepotism project.
The United Nations Human Rights Council (UNHRC) has cited Sri Lanka as an example of abuse of power and economic crimes against its people. Debt restructuring is a temporary solution to a systemic malady. Sri Lanka needs to also focus on the recovery of stolen assets and bringing those who committed economic crimes against the people to book.
Dilrukshi Handunnetti
Executive Director of the Colombo-based Center for Investigative Reporting and a lawyer by training
(dilrukshi@cir.lk)
(dilrukshihandunnetti @gmail.com)