By Roshan Pussewela –

In Sri Lanka’s post-crisis political narrative, President Ranil Wickremesinghe is increasingly portrayed as the man who single-handedly rescued the country from its economic meltdown. Supporters frame him as the technocrat-statesman who steered the nation away from collapse, while international observers often echo the same sentiment. Yet, this narrative, repeated often enough to become political currency, masks the reality that Sri Lanka’s temporary stabilization was not the result of Wickremesinghe’s ingenuity, but of externally imposed austerity, accidental windfalls, and the behind-the-scenes work of the Central Bank.

A sober examination of the evidence suggests that Ranil Wickremesinghe did not perform any economic “miracle.” Rather, he administered painful IMF orthodoxy, benefited from unforeseen circumstances such as the collapse of the rupee and resulting tourism boom, and allowed the Central Bank to manage the complex process of debt restructuring.

IMF Orthodoxy, Not Leadership Genius

When Wickremesinghe assumed the presidency in mid-2022, Sri Lanka was already in the throes of its worst financial crisis since independence. The state had defaulted on its external debt for the first time in history, foreign reserves had dried up, and ordinary citizens faced shortages of fuel, food, and medicine.

In this environment, Wickremesinghe’s options were narrow. His government turned to the International Monetary Fund (IMF), which quickly became the anchor for Sri Lanka’s stabilization program. The IMF’s $3 billion Extended Fund Facility (EFF), approved in March 2023, came with stringent conditions designed to restore fiscal discipline.¹

These included:

* Suspension of imports, except for essentials, to conserve foreign exchange.

* Tax hikes and new levies, which disproportionately affected wage earners and small businesses.²

* Curtailment of subsidies, particularly in energy, transport, and agriculture, leading to higher living costs.³

* Privatization of state-owned enterprises, including restructuring of the loss-making Ceylon Petroleum Corporation and Ceylon Electricity Board.

These measures were neither designed by Wickremesinghe nor unique to Sri Lanka. They are standard IMF prescriptions applied worldwide, from Greece to Argentina. Their short-term effect is stabilization at the cost of severe social pain.

The Accidental Windfall: Collapse of the Rupee

Another under-acknowledged factor was the steep depreciation of the Sri Lankan rupee in 2022. The Central Bank floated the currency in March that year, leading to a sharp fall – over 80% against the US dollar at one point.⁴

While this worsened inflation domestically, it unexpectedly boosted tourism. Sri Lanka suddenly became one of the cheapest destinations in the world. For Europeans and Asians holding stronger currencies like the dollar, pound, or euro, Sri Lanka’s beaches, hotels, and cultural attractions were available at a fraction of their previous cost.

Tourist arrivals rose significantly in 2023, generating foreign exchange inflows that eased the balance of payments crisis.⁵ This was not a carefully planned government strategy but a fortuitous side effect of economic collapse. Yet, the Wickremesinghe camp has rarely acknowledged the role of this accident in “stabilization.”

The Central Bank: The Real Driver of Debt Management

If there is one institution that deserves recognition, it is the Central Bank of Sri Lanka (CBSL), led by Governor Dr. Nandalal Weerasinghe. The CBSL spearheaded debt restructuring talks with bilateral creditors (China, India, Japan) and private bondholders. These negotiations were critical in securing IMF approval and in preventing Sri Lanka from plunging deeper into default.

Debt restructuring is a highly technical process, involving complex negotiations on maturity extensions, interest rate adjustments, and write-downs. This expertise lay with the Central Bank and its advisors, not with the president or his cabinet.

Indeed, IMF staff reports themselves credit the Central Bank’s measures, tightened monetary policy, exchange rate flexibility, and inflation targeting, as central to the stabilization process.⁶ Wickremesinghe’s role, by contrast, was more political: to provide legitimacy to the process and to manage domestic unrest as austerity measures bit into the population.

Political Capital vs. Economic Reality

It is true that Wickremesinghe, as president, became the public face of Sri Lanka during the crisis. His ability to negotiate politically with parliament, manage protests, and maintain a fragile state apparatus was not insignificant. But the leap from “political manager” to “economic saviour” is unwarranted.

The crediting of stabilization to Wickremesinghe personally has been politically convenient for his allies. It recasts externally dictated austerity as statesmanship, while ignoring the immense suffering caused by higher taxes, subsidy removals, and cuts to public spending.

The danger in sustaining this myth is twofold:

1. It obscures the structural lessons of the crisis, including the need for long-term fiscal discipline, production-based growth, and diversification of exports.

2. It allows politicians to rewrite history, turning what was essentially survival under IMF conditionality into a story of heroic leadership.

Conclusion

Sri Lanka’s economic crisis was not solved by Ranil Wickremesinghe’s brilliance. It was temporarily stabilized by IMF austerity measures, an accidental boost from a collapsing rupee and tourism inflows, and the technical work of the Central Bank in managing debt negotiations.

To present Wickremesinghe as the “magic bullet” is to indulge in mythmaking. The truth is more sobering: Sri Lanka’s survival came at the cost of immense social hardship, with the real credit lying in structural adjustments forced upon the country and fortunate external circumstances.

Understanding this distinction is essential if Sri Lanka is to move beyond crisis management and towards building a genuinely resilient and equitable economy. To mistake political survival for economic statesmanship is not only misleading, but dangerous for the future.

References

1. International Monetary Fund. Sri Lanka: Request for an Extended Arrangement under the Extended Fund Facility. IMF Country Report No. 23/116, May 2023.

2. Government of Sri Lanka. Budget Speech 2023. Ministry of Finance, November 2022.

3. Asian Development Bank. Sri Lanka: Economic Update 2023. Manila: ADB, 2023.

4. Central Bank of Sri Lanka. Annual Report 2022. Colombo: CBSL, 2023.

5. Sri Lanka Tourism Development Authority. Monthly Tourist Arrivals Reports, 2023. Colombo: SLTDA.

6. International Monetary Fund. First Review Under the Extended Arrangement. IMF Country Report No. 23/321, December 2023.