By Vishwamithra –

 “Birds desert trees which are bare; a prostitute abandons a poor, and subjects abandon a powerless king. This always holds true.” ~Kautilya

Conventional economists and sociopolitical pundits typically oppose any departure from IMF-regulated boundaries. The International Monetary Fund (IMF) may have its own prescriptive regulations and farsighted reasons to advise the National People’s Power (NPP) government against pursuing certain economic policies. Such advice, of course, is often well-founded in the context of macro-development and the country’s painstaking journey toward economic stability and eventual recovery. But the IMF does not face the everyday demands of a suspicious electorate, nor is it the entity that has to stand for general elections. It is President Anura Kumara Dissanayake (AKD) and his NPP who must navigate that potentially grueling reality.

This is the central, agonizing paradox of governance in post-bankruptcy Sri Lanka. On one side stands Washington, armed with spreadsheets, debt-sustainability models, and the cold, unyielding arithmetic of fiscal consolidation. On the other side stand millions of citizens whose real incomes have been hollowed out, whose small businesses are teetering on collapse, and whose patience is rapidly evaporating. The technocrats see a primary surplus; the voters see an empty plate. Bridging this chasm is not just an intellectual exercise in economic theory—it is a brutal and unforgiving test of political survival.

The Orthodoxy of the Spreadsheets

To understand why conventional economists remain hyper-vigilant, one must look at the fragile glass house that is Sri Lanka’s current economic recovery. The metrics championed by the Central Bank and international lenders present a picture of hard-won resilience. Following the catastrophic sovereign default that brought the nation to its knees, the strict strictures of the IMF’s Extended Fund Facility (EFF) acted as a financial straightjacket. It was bitter medicine, but the numbers suggest the patient is potentially reaching that rare state of stability.

Gross official reserves have clawed their way back, inflation has been tamed into a single-digit positive territory, and domestic economic growth has shown surprising signs of life. For the global financial architecture, these milestones are proof that the textbook works: if you raise taxes, slash subsidies, enforce cost-recovery utility pricing, and maintain a strict primary surplus, macroeconomic balance will return.

From the vantage point of a pundit’s desk or an IMF boardroom, any deviation from this path is viewed as an act of economic heresy. Economists warn that even a minor lapse into populist spending could spook international markets, derail ongoing debt restructuring, and trigger a devastating return to hyperinflation. To them, the boundaries are not arbitrary restrictions; they are the only retaining walls preventing a second, even more catastrophic economic collapse.

The Human Cost of Austerity

However, spreadsheets do not feel hunger, and mathematical models do not have to pay utility bills. While the macroeconomic indicators point upward, the microeconomic reality for the average Sri Lankan household remains bleak. The revenue overperformance praised by international institutions was largely extracted directly from the pockets of a working population already exhausted by years of crisis.

The widening of the tax base, the lowering of thresholds for Value Added Tax (VAT), and the systematic removal of state subsidies have combined to create an unbearable cost-of-living crisis. Real wages have stagnated while the costs of essentials remain sky-high. Small and medium-sized enterprises (SMEs)—the true backbone of the domestic economy—are quietly closing their doors, crushed under the dual weight of high operating costs and depressed consumer demand.

This is the ‘suspicious electorate’ that President AKD inherited. The historic mandate that swept the NPP into power was fueled by an intense, collective desire for deep systemic change. The public did not vote for a simple managerial transition to oversee the same austerity measures that caused their misery. They voted for an end to corruption, a fairer distribution of the economic burden, and tangible relief from the crushing weight of daily survival.

The Crucial Difference in Accountability

This brings us to the core asymmetry of accountability that our writings so sharply identify. When an IMF program fails or triggers widespread social unrest, its architects face no democratic consequences. Technocrats do not see their names on a ballot paper. They do not hold constituency clinics, they do not answer to parliamentary questions, and they are not held accountable at the polling booth. If a country erupts in protest due to severe austerity, the fund can simply pack its briefcases, cite a ‘lack of political will’ from the local administration, and withdraw to its cushy air-conditioned headquarters in Washington.

For President Dissanayake and the NPP leadership, there is no such luxury of distance, space for comfort and time for reflection. They live and breathe the political consequences of every single policy decision. In a democracy, a government cannot govern purely by executive decree or mathematical equations; it requires the consent of the governed. But that consent has an expiry date; if and when it expires, the political vacuum is inevitably filled by instability, populism, and the resurgence of the very political forces the electorate fought so hard to reject.

Chanakya’s monumental treatise, the ‘Arthashastra’ which laid the foundations for the concept of a welfare state states thus: ‘In the happiness of his subjects lies the King’s happiness, in their welfare his welfare. He shall not consider as good only that which pleases him but treat as beneficial to him whatever pleases his subjects’. AKD may well trade his Socialist/Communist garb for the grand raiments of Chandragupta’s Mauryan Empire.

Therefore, when the NPP government attempts to carve out fiscal space for public investments, targeted welfare, or tax adjustments, it is not acting out of reckless financial mismanagement. It is responding to a profound democratic imperative. A government that fails to provide a safety net for its most vulnerable citizens during a period of intense structural reform will quickly find itself without an electorate to govern.

The Tightrope Walk Forward

Can President Anura Kumara Dissanayake successfully walk this high-stakes tightrope? The early signs indicate that the NPP is attempting an incredibly sophisticated balancing act. The national budgets presented under this administration have deliberately tried to maintain a dual identity. On the one hand, they explicitly commit to preserving the fiscal discipline, revenue targets, and primary surplus goals required to keep the IMF program alive and unlock crucial tranches of international funding. On the other hand, they have introduced strategic interventions designed to cushion the blow for the public, such as pushing for increased spending on public investments to combat the suffocating, contractionary effects of continuous austerity.

Yet, this balancing act will only grow more difficult. The economy remains highly exposed to severe external shocks—ranging from volatile global energy prices driven by geopolitical conflicts to the catastrophic domestic impacts of extreme weather events. Furthermore, the looming shadow of 2028- the year Sri Lanka is scheduled to return to full external debt repayments- means that the window for error is virtually slim or none.

Democracy Cannot Be Budgeted Away

Ultimately, conventional economists must recognize that economic stability cannot exist in a political vacuum. A country cannot achieve sustainable public finances if its social fabric is completely torn apart in the process. Enforcing rigid, uncompromising boundaries without allowing a democratically elected government the flexibility to manage internal social pressures is a recipe for volatility.

The IMF’s advice may well be farsighted, but foresight is a luxury enjoyed by those who do not have to worry about how they will afford their next meal, or how they will win the next election. For President AKD and the NPP, the challenge is far more immediate, personal, and perilous. They must find a way to honor the numbers on the spreadsheet without betraying the flesh-and-blood citizens who put them in office. In this high-stakes gamble, the true measure of their success will not just be a glowing report from Washington, but whether they can keep the trust of a weary, watchful nation.

•The writer can be reached at vishwamithra1984@gmail.com