COLOMBO, Sri Lanka – On Monday, Sri Lanka’s newly elected president, Anura Kumara Dissanayake, inaugurated a 21-member Cabinet following his party’s successful bid for a two-thirds majority in the recent parliamentary elections.
This substantial victory positions the president to implement extensive reforms, including a commitment to draft a new constitution, without the need for cooperation from rival political parties.
Sri Lanka continues to grapple with the aftermath of its most severe economic crisis, having declared bankruptcy and defaulted on its external debts in 2022.
Dissanayake’s National People’s Power Party (NPP) captured 159 of the 225 parliamentary seats in the election held on Thursday.
In line with his promise to minimize the size of the Cabinet, Dissanayake appointed fewer than 25 ministers, the majority of whom are new to the legislative process.
He reinstated Harini Amarasuriya, a member of the NPP and the first female prime minister in the country in nearly a quarter of a century. Amarasuriya previously took on the role in an interim capacity in September after Dissanayake’s presidential victory.
Dissanayake ascended to the presidency on September 21, representing a significant shift away from the established political parties that have dominated governance in Sri Lanka since independence in 1948. His election garnered 42% of the public vote, leading to uncertainties regarding his party’s electoral viability. Nevertheless, support for the NPP surged shortly into his term, reflected in the recent parliamentary elections.
The new administration faces formidable challenges in guiding the country through its economic difficulties.
Currently, Sri Lanka is partaking in a bailout program with the International Monetary Fund (IMF), with negotiations for debt restructuring with international creditors nearing completion.
During his presidential campaign, Dissanayake indicated intentions to propose major adjustments to the IMF agreement established by his predecessor, Ranil Wickremesinghe, claiming it excessively burdened the citizens. However, he has since indicated that the government will adhere to the terms of the agreement.
The economic crisis in Sri Lanka resulted from a combination of poor financial management and the repercussions of the COVID-19 pandemic, which, alongside militant attacks in 2019, significantly impacted tourism—one of the most vital sectors. The pandemic also led to a drop in remittances from Sri Lankans employed overseas.
Additionally, the administration implemented significant tax cuts in 2019, which severely impacted government revenue as the pandemic struck, causing foreign exchange reserves to dwindle and leaving the nation unable to afford imports or maintain the value of its currency, the rupee.
The resultant economic distress precipitated a political crisis, culminating in the resignation of former President Gotabaya Rajapaksa in 2022. Following this, Parliament elected Wickremesinghe to take the helm.
Under Wickremesinghe’s leadership, steps were taken to stabilize the economy, inflation rates fell, the rupee showed signs of recovery, and foreign reserves increased. Despite these improvements, Wickremesinghe lost his position as public frustration mounted regarding rising electricity costs and substantial new income taxes on both professionals and businesses, which were enacted to comply with IMF requirements.
Voters were drawn to the NPP’s message advocating for a transformation in political culture and a crackdown on corruption, attributing the nation’s economic downfall to the ruling parties of the past.
Dissanayake’s commitment to pursue accountability for past government officials alleged to have engaged in corrupt practices and to retrieve misappropriated assets has sparked optimism among the electorate for a new, transparent political era.