By Ameer Ali –

Dr. Ameer Ali

The timing of the arrival of India’s External Affairs Minister Dr. Subrahmanyam Jaishankar carrying an invitation from his Prime Minister to President Ranil Wickremesinghe (RW), and the unpacking of a series of Indian initiatives to help the struggling economy, could be the manna for RW and a game changer to save him politically.

New Delhi had always been supportive of Sri Lanka in times of need; but the assistance promised now and the initiatives announced so far come at a crucial moment when the President and his unpopular parliament are due to face a Local Government Election (LGE), which is almost taking the form of a referendum on RW’s Presidency. Given the delay and uncertainty over the promised emergency funding from IMF, which is also delaying additional funds expected to flow from other sources, all because of difficulties in getting the debt restructure issue resolved, had thrown into doubt whether RW’s economic recovery plan would eventuate at all. Adding to this pessimism are the burden of new and higher rates of taxes introduced in RW’s 2023 budget. There is therefore widespread discontent over the regime’s pledges and performance, and to conduct LGE in this climate of discontent would, in all probability, spell disaster to the regime. Frantic efforts are therefore underway to get the elections postponed on chiefly on grounds of (a) financial unaffordability and (b) threat to the reforms and revival of the economy. The first of the two reasons appear weak in the face of assurance given by the Election Commissioner that the necessary expense of Rs. 5 billion could be met without a problem. But the second is bound to receive added strength following fresh hopes arising from India’s verve of economic assistance.         

At a special press conference in the presence RW and his Foreign Minister Ali Sabry, the Indian visitor listed a series of proposals that his government would undertake to develop Sri Lanka, such as turning Trincomalee into a renewable energy hub, increasing Indian investment and tourism and promoting infrastructure development. He reiterated his government’s 2022 commitment to grant $4 billion worth credit facilities with roll over terms to help Sri Lanka’s import needs. More importantly and after extending financing assurances to IMF, Dr. Jaishankar urged other creditors to take “proactive steps” to help the island’s economic recovery. He also reminded, perhaps with geopolitical reasons, that all bilateral creditors be treated equally. All this initiative were couched under India’s “Neighbourhood First” policy, which, in relation to Sri Lanka, was deemed a civilizational duty by the Indian Prime Minister in a trilogy of lectures in 2020. 

Either coincidentally or as reaction to India’s initiatives the Exim Bank of China, which was accused of dragging its feet over debt restructuring, had written to RW in his capacity as Finance Minister, that the bank had decided to offer two-year moratorium, quipped by some as not “hard assurance”. However, IMF sees this as positive sign. But China’s offer be enough for IMF to release the promised $2.9 billion is not sure. Yet, India’s proposals and China’s response, would at least help quickening the process. That itself would be good news to RW. All in all, the vigorous Indian initiative looks to be a game changer, and RW and his team would now strengthen their case and argue for the postponement of LGE. It would be interesting to watch how things are going to over the next few weeks.     

Outside that special press conference, and in a separate meeting with the President, the Indian minister opened the controversial subject of the 13^th Amendment, and urged its “full implementation” followed by Provincial Council Elections. The fact that this subject did not receive any mention at the press conference is significant. Does it convey that its importance been devalued to be raised separately like an addendum to the main text in order to satisfy the Tamil lobby alone? In this regard, RW’s bold attempt to resolve once and for all the so-called national question before this year’s Independence Day has now been given up, and instead, to satisfy India more than the Tamils he has agreed at a meeting with TNA stalwarts to (a) release five Tamil prisoners held without charges by 4^th February, and another 10 against whom charges have not been filed yet to be released once the Attorney General’s Department prepares the necessary documents; (b) allow management of land and police powers by Provincial Councils, once the Land Commission is set up; and (c) permit 9 of the 10 Deputy Inspector Generals to be managed by each Provincial Council. In the context of a mellowed Sinhala Buddhist electorate which is more concerned with economic issues than communal politics, RW-TNA decisions may have a reasonable chance of being implemented once emergency funds become available and India’s promises are delivered.   

Yet, it is needless to stress that it is devolution of power that is at the heart of Tamil demand and of the 13^th Amendment. Dr. Jaishankar would have been aware too well how the former president Gotabaya Rajapaksa made a promise to implement that amendment in front of Indian Prime Minister Modi in 2020, and after returning home how he was forced to renege on that promise because of raging anger from his Sinhala Buddhist backyard. Is it therefore any wonder why the visiting diplomat did not open that subject at the special press conference? Diplomacy works in strange ways.  

For the moment, if the Indian push comes to shove, moves IMF to release the funds quickly and urges Paris Club members to be proactive over debt restructuring, that would strengthen RW’s case for LGE postponement. But whether, even with that postponement, financial assistance and debt restructuring alone would be sufficient to revive the economy and set on a sustainable growth path is doubtful without system change. There seems to be a general view among most Sri Lankan politicians including RW, and many intellectuals that system change would be easier once growth and prosperity occurs. This was why former President Gotabaya Rajapaksa publicly announced that solution to power devolution was economic development. It should be the other way round in Sri Lanka, because it is the system that was put in place after independence, which had been the major contributor to economic slowdown and disaster. Had the system been fair and just there wouldn’t have been a national question today. It was this realization that made the aragalaya youth to call for system change. 

Finally, while India’s vigorous push and international response to it would make RW’s IMF backed “One Plan Framework” to become operational, the parties in the opposition except NPP are busy forming coalitions to defeat the UNP-PPP at LGE. It is a pity that none of them except NPP has a comprehensive alternative to the IMF model. If India’s initiatives appear to be a game changer to RW politically, NPP’s alternative framework would be the game changer to the country. It is only NPP that is talking about a non-corrupt, transparent, accountable and economic democracy with social protection and inclusive national identity, which in total amounts to system change. But whether that party could sweep the election is the sixty-four thousand dollars question.

*Dr. Ameer Ali, Murdoch Business School, Murdoch University, W. Australia