Under new president Anura Dissanayake, Sri Lanka will require skillful diplomacy, a focus on economic stabilization, and a renewed commitment to addressing deep-seated social and political challenges.
By K S Tomar
In view of India’s strained relations with immediate neighbors like Bangladesh, Myanmar and the Maldives, alongside its moderate but not close ties with Nepal and Myanmar, the election of pro-China incumbent Anura Kumara Dissanayake of the National People’s Power (NPP) Dissanayake as Sri Lanka’s new president may present a significant challenge for India. This shift is likely to necessitate a recalibrated diplomatic strategy to manage relations with the island nation.
However, diplomatic experts recognize that India has already proven its role as a crucial ally to Sri Lanka, stepping in as a savior during the island’s severe economic collapse. India’s timely assistance, exceeding $4 billion, far outpaced the IMF’s four-year $3 billion bailout package, marking India’s decisive support for both the Sri Lankan government and its people. In contrast, China’s reluctance to step in during this crisis led to a decline in its standing among the Sri Lankan populace, as many saw Beijing’s inaction in stark contrast to India’s swift intervention.
Sri Lanka's new president, known for his pro-China stance, will face challenges in balancing relations with the US due to his alignment with Beijing. The US has strategic interests in the Indian Ocean region and may view Sri Lanka’s close ties with China, especially in infrastructure and port projects, as a concern. However, the new president might attempt to maintain a neutral approach, leveraging Sri Lanka's geographic importance to secure economic aid from both superpowers.
While his inclination toward China could strain diplomatic relations with Washington, Sri Lanka’s dire need for economic recovery might push the president to engage with the US for financial support and trade opportunities. The key will be his ability to reassure America of Sri Lanka's sovereignty while managing China’s growing influence. A balanced foreign policy will be crucial to avoid alienating either side and to gain the economic benefits necessary for the country’s recovery.
Dissanayake steps into office amidst a myriad of challenges that will define his leadership. His foremost task is navigating one of the nation’s worst economic crises, marked by skyrocketing inflation, widespread unemployment, and a crippling debt burden exceeding $50 billion. His immediate priority is securing successful negotiations with the International Monetary Fund (IMF) for restructuring loans, stabilizing foreign reserves, and attracting international investment. Simultaneously, he must focus on containing inflation and ensuring the availability of basic necessities like food and fuel, which have become scarce for many Sri Lankans.
Political instability, fuelled by mass protests against the Rajapaksa regime, casts a long shadow over the political landscape. Dissanayake will face enormous pressure to enact political reforms, potentially revisiting constitutional amendments aimed at reducing the excessive power of the executive branch. Months of unrest, coupled with corruption scandals, have eroded public confidence, and Dissanayake’s administration must work swiftly to rebuild trust, which will be no easy feat given the fractured political climate. Re-establishing political stability will be a critical component in maintaining social harmony and addressing the concerns of an exhausted populace.
Debt restructuring remains another herculean task. The president must continue negotiations with Sri Lanka’s major creditors, including China, Japan, and India while managing austerity measures linked to the $2.9 billion IMF bailout loan. Balancing fiscal requirements against international creditor demands will require sharp diplomatic skills and sound financial strategies. While the need for austerity is clear, its implementation will likely provoke further social unrest, as the public grapples with economic hardship, job losses, and reduced government spending on social services.
The ongoing economic collapse has already incited widespread protests, making social unrest a pressing concern for Dissanayake. Disillusioned by high prices, the scarcity of essential goods, and mass unemployment, the Sri Lankan public remains volatile. Addressing their grievances will be pivotal to restoring both social order and confidence in the government.
The new president must also address longer-term issues of foreign policy, particularly managing Sri Lanka’s delicate balancing act between its two powerful neighbors — India and China. Dissanayake must navigate foreign relations carefully, as Sri Lanka’s reliance on Chinese loans and infrastructure projects under the Belt and Road Initiative (BRI) has left the nation deeply indebted. Yet, relying too heavily on one power risks alienating others, particularly India, which shares both a geographical proximity and vested interests in the island nation’s political stability.
Ethnic tensions, another festering wound in Sri Lankan society, will also demand attention. Sri Lanka’s history of conflict, particularly with its Tamil and Muslim minorities, remains unresolved. Dissanayake will need to spearhead reconciliation efforts and implement inclusive policies that address minority rights, fostering a sense of national unity in a country often divided along ethnic lines. His success in promoting reconciliation will be critical for ensuring long-term stability.
Corruption remains a systemic issue within Sri Lankan politics, and public demand for transparency and accountability is at an all-time high. Addressing this will require comprehensive anti-corruption measures and judicial reforms. Rooting out corruption, particularly among the political elite, will be key to restoring faith in governance.
Equally important are environmental concerns. Sri Lanka is highly vulnerable to the effects of climate change, with rising sea levels and the threat of natural disasters posing significant risks to its biodiversity and coastal regions. Dissanayake will need to prioritize sustainable development policies and climate resilience initiatives, ensuring the country is better prepared to deal with these long-term challenges.
On the international front, Dissanayake’s relations with India will be a critical balancing act. As Sri Lanka’s closest neighbor, India has a vested interest in regional security and economic cooperation, particularly through platforms like BIMSTEC and SAARC. Dissanayake’s focus on economic recovery and transparency may align well with India’s own ambitions to invest in Sri Lankan infrastructure and trade.
Geographically and culturally, Sri Lanka shares deep historical ties with India, and Dissanayake may seek to leverage these connections to deepen bilateral relations, particularly in areas such as trade, security, and energy cooperation. At the same time, managing the complex power dynamics between India and China will require Dissanayake to adopt a position of strategic autonomy.
With both powers competing for influence in the region, Dissanayake’s approach will likely involve maintaining neutrality, striving not to overly align Sri Lanka with one nation at the expense of the other. India could potentially benefit from this stance, as Dissanayake may seek to avoid allowing Sri Lanka to become too dependent on China, thereby offering India more opportunities to strengthen ties.
However, China’s influence cannot be overlooked. Over the past decade, China has entrenched itself in Sri Lanka’s infrastructure and economy, largely through debt-driven projects like the Hambantota Port. While Dissanayake may continue to engage China on these fronts, public concern over Sri Lanka’s growing debt dependency on China will likely prompt him to adopt a more cautious approach.
This could involve renegotiating certain terms of ongoing projects and seeking to diversify the sources of international aid. While he may not abandon Chinese investments entirely, Dissanayake will likely push for more favorable terms within the BRI framework to prevent further debt entrapment.
As a leader, Dissanayake is known for his pragmatic nationalism. He is expected to advocate for policies that prioritize Sri Lanka’s sovereignty while managing international partnerships. His reputation as a consensus builder could serve him well, especially in a political environment that remains deeply divided. His ability to bring together different factions might help the country navigate its economic and political turmoil.
Economically, Dissanayake is expected to introduce reforms aimed at stabilizing the economy, with a focus on recovery efforts that tackle the nation’s severe debt crisis. Politically, his moderate stance suggests he will strike a balance between populist measures and practical governance, appealing to both grassroots supporters and policy elites.
In the final analysis, Dissanayake’s presidency will likely emphasize moderation, economic reform, and a careful balancing of Sri Lanka’s relations with both China and India. While his approach may not fully align with India’s strategic interests—given China’s entrenched presence in Sri Lanka—his commitment to a neutral foreign policy could limit China’s ability to expand its dominance further. For Sri Lanka, the road ahead under Dissanayake’s leadership will require skillful diplomacy, a focus on economic stabilization, and a renewed commitment to addressing the country’s deep-seated social and political challenges.
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(The writer is strategic affairs columnist and political analyst based in Shimla)
