By Ajith Rajapaksa –

Ajith Rajapaksa

With less than three weeks until the presidential election, the race is intensifying. The large crowds at campaign rallies make it challenging to predict the winner, as all political parties are transporting people from various places using buses. Furthermore, public opinion polls are not entirely reliable, as the samples used are not very trustworthy, leading to results that may not accurately reflect reality.

There is also clear evidence that international influences are heavily involved in this election campaign. Beyond the voters, global powers are exerting significant pressure on the outcome of the election. During the 2015 presidential election, substantial funds from India, China, and the United States were funnelled into the campaigns of the two main candidates, a fact even reported by international media. Mahinda Rajapaksa, who entered the 2015 election with great confidence, later publicly accused India of being responsible for his defeat.

Those with a keen understanding of politics can easily deduce which global forces are backing the main candidates by observing the election campaign dynamics, particularly the flow of campaign funds. Many analysts now suggest that the final showdown is between the Chinese and Indian backed factions. Illustrating these geopolitical interests, three Chinese warships and an Indian warship arrived at the Colombo port last week. Furthermore, the visit of Indian National Security Advisor Ajit Doval, who held extensive discussions with the three main candidates and representatives of Tamil political parties, highlights the intensity of this geopolitical rivalry. Notably, Doval emphasized the importance of Tamil political parties supporting a key candidate in the South, which was followed by the ITAK (Ilankai Tamil Arasu Kachchi) pledging its support to Sajith Premadasa, an event that could be seen as significant. They also requested the Tamil candidate to withdraw from the race.

Some key candidates, particularly those without Indian support, seem to be participating in the race without much hope of victory, understanding that governing without Indian backing would be challenging. Rajitha Senaratne, representing the Ranil Wickremesinghe camp, has accused foreign forces of attempting to establish a weak government in Sri Lanka for their benefit.

Regardless of foreign influences, every candidate needs to win the election by securing votes from the public. Without public support, even the backing of powerful forces will not suffice. Therefore, all candidates have begun making various promises, with many revealing their plans and strategies if elected to power. These plans include appealing promises, such as increased wages, tax reliefs, subsidies, and job opportunities. However, the credibility of the funding sources for these promises are questionable.

Many promises are based on anticipated tax revenues that might not materialize, making these promises risky for a country already struggling with an unstable economy. This makes offering such promises irresponsible. A more practical approach would be to first implement a concrete plan to recover these tax revenues, reassess the Treasury’s position, and then offer such concessions.

The idea of renegotiating certain aspects of the agreements with the International Monetary Fund (IMF) is also being floated but is not very convincing. The IMF‘s debt sustainability analysis is based on their standards, using data that aligns with their requirements, not necessarily ours. Their analyses include their own risk assessments. Throughout history, we have seen how the IMF, which represents global powers and capital, behaves according to their interests, not according to the needs of smaller nations.

Furthermore, many of the proposals presented by the candidates lack specific methodologies or timelines. They use vague language such as “implementing policies,” “proposing plans,” “promising actions,” and “expecting results,” which leaves room for uncertainty in their execution. For a country deeply entangled in a debt trap, many of these proposals may not be feasible, especially when the nation is yet to complete the debt restructuring process. Moreover, the priority should be on finding funds to meet the debt service payments due in 2028 rather than on new spending. The emphasis should be on saving, not spending.

This article aims to compare the key aspects of the policy statements of the three main candidates.

Anura Kumara Dissanayake 

The National People’s Power (NPP) has presented a lengthy 192-page plan, which appears to be aimed at pleasing all segments of society. The plan identifies and clarifies problems, backed by data. However, as mentioned earlier, it is questionable how a bankrupt country can fund many of these proposals. Additionally, some proposals are presented without specific timelines. For example, promises such as new universities, schools, universal pensions, healthcare benefits, and subsidies raise questions about how they will be implemented.

A significant proposal that could impact the economy is the suggestion to renegotiate the debt sustainability analysis (DSA) with the IMF. This has caused considerable controversy, with some economists warning that this could derail the current program with the IMF, potentially leading to another crisis within the country.

The most attractive promise from the NPP is to advance the work started by the Yahapalana government from 2015 to 2019 in drafting a new constitution. They promise to abolish the executive presidency and establish a new parliamentary system. Additionally, they promise to revoke the benefits and privileges of former presidents, abolish MPs’ pensions, revoke duty-free permits, and limit the cabinet to twenty-five ministers. They also propose giving voters the power to recall MPs. Furthermore, they have promised to prosecute those responsible for the Easter attacks, investigate unresolved murders and abductions, and enforce the law. Also, they have committed to holding provincial council elections within a year in the Northern and Eastern provinces.

Another significant promise is the establishment of an agency for recovering stolen assets (STAR) and seeking technical assistance from international institutions such as the UNODC (United Nations Office on Drugs and Crime) to tackle drug trafficking and organized crime. Additionally, they propose establishing a three-judge high court to expedite bribery and corruption cases, setting up anti-corruption offices in every district, and promising to investigate allegations within six months.

To boost the economy, they propose setting up 15,000 dairy farms and 5,000 poultry farms. They also plan to create 50,000 new agricultural entrepreneurs within five years and establish 1,000 export agricultural villages. Furthermore, they propose establishing a national industrial think tank and setting up factories to manufacture products using various minerals available within the country. They also promise to recruit 20,000 new teachers, create 15,000 job opportunities for graduates, and increase the information technology sector workforce to 200,000 by 2030. Additionally, they promise to raise the personal income tax threshold to Rs. 200,000 per month.

On state enterprise restructuring, they suggest taking action on a case-by-case basis.

Sajith Premadasa

The Samagi Jana Balawegaya (SJB) is trying to convince voters that their socio-economic program is based on social democracy. They promise to create a social market economy rooted in social justice, aiming to reduce poverty and bridge the gap between the rich and the poor. The SJB has pledged to continue the basic agreement with the International Monetary Fund (IMF) and has stated that they will propose amendments to the IMF’s program to provide relief to the poorer sections of society. They have also promised to eradicate corruption and strengthen anti-corruption laws, and to implement the international STAR (Stolen Asset Recovery) program in collaboration with all relevant international organizations. They pledge to implement this program within a month of coming into power. The SJB has also committed to reviving the existing Anti-Corruption Special High Court and ensuring daily trials of bribery and corruption cases. Additionally, they guarantee the enforcement of the Public Procurement Act.

To promote the export economy, the SJB has proposed special tax concessions, including reducing the corporate tax for exporters from 30% to 6%. They also propose a 15% special tax on multinational companies that attempt to shift profits to other locations to avoid taxes. Moreover, the SJB promises a 15% interest rate on bank deposits for retirees.

To combat the rice mafia, they have pledged to establish a nationwide cooperative rice milling program called “Shakthi,” aiming to reduce rice prices. They also promise to build climate-controlled cold storage facilities across the country under the “Prabashwara” program to preserve agricultural products, reducing post-harvest losses, which currently amount to around 40%. Another attractive promise for the agricultural sector is the cancellation of all farmer debts and providing each farmer with a 50 kg bag of fertilizer for Rs. 5,000. Additionally, the SJB proposes fuel subsidies for farmers, fishermen, three-wheeler drivers, and school transport services.

To eliminate poverty, the SJB has guaranteed a program similar to “Janasaviya,” providing Rs. 20,000 per month for two years to the needy. They also propose establishing a company similar to Singapore’s Temasek for managing government-owned enterprises. The SJB has pledged to raise government employees’ salaries by at least 24%, increasing the minimum salary to Rs. 57,500. They have also promised to raise the income tax threshold to Rs. 100,000 per month.

Regarding decentralization of power, the SJB has pledged to fully implement the 13th Amendment and hold provincial council elections within six months. They have also promised to appoint a new commission within three months of coming into power to investigate the Easter Sunday attacks and ensure justice for the victims by prosecuting all wrongdoers.

Ranil Wickremesinghe

Ranil Wickremesinghe emphasizes the need to continue the economic reforms he has implemented, warning that abandoning them could be dangerous. He claims to have rescued the bankrupt country from the abyss over the past two years. Wickremesinghe states that he will continue with the IMF agreement and assures that the results of his economic program will be enjoyed by the people in the future. He has pledged a 24% salary increase for all government employees from next year, raising the minimum salary in the public sector to Rs. 55,000. Additionally, Wickremesinghe has promised to create 100,000 jobs in the next year and develop the economy by establishing new economic zones. He has proposed a new constitution to be adopted within the next year and the establishment of a second chamber of parliament. Wickremesinghe has also suggested allowing Parliament to decide whether to continue the executive presidency.

Wickremesinghe, who claims to have already passed anti-corruption legislation, intends to further strengthen these laws. Regarding state-owned enterprises (SOEs), he plans to continue with the reform program he has already initiated. He also mentioned several projects he intends to implement with Indian assistance, including creating trade zones in various regions, launching wind and solar energy projects, building two oil refineries, constructing an oil pipeline under the sea to India, and connecting the electricity grids between the two countries.

Every candidate has promised to digitize the economy, use new technology in agriculture, reduce VAT, and provide assistance to low-income earners and the disabled.

Looking at these manifestos, the question arises: How will a bankrupt country find the capital to fulfill these promises? In a country trapped in billions of dollars of debt, what can realistically be achieved in the next five years is very limited. To fulfill these promises, the country would likely need to take on more debt.

The CEO of Advocata, an independent think tank, has stated that these promises are very difficult to implement within Sri Lanka’s financial space. Particularly, the increase in public sector salaries, the expansion of the public sector, and the provision of tax concessions could have unbearable consequences. Furthermore, raising public expectations with unachievable promises could lead to dangerous outcomes. This was evident when the President who came to power in 2019 did so by making numerous attractive promises, which created high expectations among the public. However, as these promises failed, a highly volatile situation arose in the country. Therefore, regardless of who wins, the challenges the next President will face are immense. Moreover, the situation in neighbouring countries such as Pakistan, Bangladesh, and the Maldives, and the interventions of global powers in those countries, create significant uncertainty about Sri Lanka’s future. Additionally, global economic outlooks and the potential for regional conflicts driven by superpowers asserting their influence could have severely adverse effects on Sri Lanka.