President Gotabaya Rajapaksa addresses the nation after being sworn in on November 18, 2019. Photo: AFP

The ongoing financial and political crisis in Sri Lanka is going to be a cliffhanger right up to the final whistle.

Things can take different turns. The best hope is that although the political class is thoroughly discredited and the legislature is dysfunctional, the democratic spirit lingers on.

Arguably, the protests are a manifestation of this – an inchoate uprising clamoring for political accountability by the elected government. The democratic foundations of the state are not irreparably damaged. 

Political transition has become the core demand of the protesters and embedded within that is the non-negotiable precondition that President Gotabaya Rajapaksa should quit office. The demand has been partially conceded, although with caveats, but the precondition on the president’s ouster hangs in the air.

No one knows how to bell the cat. 

Rajapaksa acted smartly by appointing as interim prime minister a senior politician with sound experience, Ranil Wickremesinghe, but the fact remains that the latter is in popular perception someone who is close to the president’s family, and whom the president can rely on to protect the family’s security and interests if the crunch time comes.

Simply put, it is old wine in a new bottle. 

On the plus side, however, this is the sixth time Wickremesinghe has held the post of prime minister, and he enjoys acceptability in New Delhi and the Western capitals as a sober thinker and doer who can be trusted to steer clear of rash decisions, which is useful at the present juncture to source urgently needed help from abroad to navigate the crisis in the Sri Lankan economy. 

Sri Lankans protesting against the government. Photo: WikiCommons

People want a winner

On the other hand, Wickremesinghe is a discredited politician himself who never once completed a term in office as prime minister, and he represents a one-man party (himself) in Parliament and is a spent force politically.

As the Archbishop of Colombo, Cardinal Malcolm Ranjith, put it: “People want a person with integrity, not someone who has been defeated in politics.” 

There is lurking suspicion in Colombo that Rajapaksa picked Wickremesinghe primarily to deflect the protesters’ demand for his own exit. The British Broadcasting Corporation reported that the news of Wickremesinghe’s appointment has been “largely met with dismay and disbelief” in Sri Lanka. 

This will become important in the days and weeks ahead because the onerous responsibility to steer the political transition to calmer waters leading to fresh elections and the formation of a new government falls on Wickremesinghe’s shoulders. The big question is: Will he persuade Rajapaksa to step down? 

The high probability is that Rajapaksa may instead try to use Wickremesinghe as a firewall to weather the protests, in effect, to defy the protesters’ demand that he quit. Suffice to say, the future of the Wickremesinghe government is murky at best. 

The danger here is that the emergent political dimensions will undermine the prospects of economic recovery. It will be next to impossible for Wickremesinghe to negotiate the bridging finance and the agreement with the International Monetary Fund while simultaneously, on a parallel track, clipping the powers of the executive presidency and setting a date for Rajapaksa to resign and for the office of the executive presidency to be abolished.

The economic agenda itself is daunting. In addition to negotiating with the IMF on the details of long-term structural reforms, the government will need to arrange urgent “bridge financing” from international agencies to inject short-term liquidity, persuade creditors to allow a pause in debt payments and prepare a range of legislation to increase taxes and cut non-urgent public spending. 

Without doubt, the IMF has already spelled out the reforms needed to win its financial support.

New Sri Lankan Prime Minister Ranil Wickremesinghe. Photo: AFP / Ishara S Kodikara

A long list of reforms

These include a long series of austerity measures, from budget cuts to income-tax and value-added-tax (VAT) increases, an end to inflationary money-printing by the central bank, phasing out import restrictions, stopping government interventions aimed at stabilizing the rupee and “growth-enhancing structural reforms,” including unpopular measures such as the sale or partial privatization of state-owned companies, removal of costly social subsidies, and so on.   

As for Rajapaksa, he seems determined to cling to power, especially in the face of the public calls to hold him and his family accountable for alleged corruption and other crimes. He has expressed no intention of resigning and instead has floated the idea vaguely of curtailing his executive powers.

The situation is extremely volatile. Even deeper economic collapse or more serious social unrest will be possible if the political stand-off is not resolved quickly. 

At any rate, the process to remove or sideline President Rajapaksa is likely to take weeks, if not months, and could fail entirely. This is where Rajapaksa may seize the moment to turn the turmoil to his own purpose by resorting to violent repression (consistent with his past record) or bring in the military for a larger role in governance. 

The top military commanders – most notably the army chief, Major-General Shavendra Silva, and the defense secretary, retired General Kamal Gunaratne – are known to be close to the president. Military brass live a life of perks and privileges in Sri Lanka and as stakeholders, they would have no qualms about turning their guns on protesters to preserve the regime. 

Of course, the role of the international community is relevant, but it is not to be exaggerated. The military leadership is unlikely to be deterred from intervening in politics or from brutal suppression of protests in support of the regime.

Then former Sri Lankan president Mahinda Rajapakse, left, and his brother, former Sri Lankan defense ministry secretary Gotabaya Rajapakse, in Colombo on May 19, 2018. Photo: AFP / Lakruwan Waniarachchi

Can Rajapaksa survive?

Interestingly, the incumbent army chief is already under US sanctions for alleged war crimes (committed under Gotabaya Rajapaksa’s watch as the defense secretary during the civil war). 

Paradoxically, any lifeline from the IMF, while easing economic hardships for the average Sri Lankan and lessening the intensity of the clamor for political change, could also provide breathing space to Rajapaksa, allowing him and his family to restore themselves. The family has a history of rising like the phoenix from the ashes. 

Sri Lanka is only one of some 35 developing countries that are struggling with post-pandemic economic recovery. The big powers have little time for Sri Lanka amid the birth pangs of a multipolar world order.

Therefore, the chances are that Gotabaya Rajapaksa, a ruthless practitioner of power, will strive to attrition the protesters somehow to survive the challenge to his leadership. 

This article was produced in partnership by Indian Punchline and Globetrotter, which provided it to Asia Times.

M K Bhadrakumar is a former Indian diplomat. Follow him on Twitter @BhadraPunchline.