Sri Lankans cast their ballots on September 22, 2024, in a landmark election that signaled a shift in the country’s political landscape. They chose Anura Kumara Dissanayake, a leftist politician known for his anti-poverty advocacy, as their new president. Dissanayake’s victory is a significant departure from the traditional political figures who have dominated the South Asian nation for decades. His ascent is seen as a response to public frustration over economic mismanagement, political corruption, and the aftermath of a severe financial crisis that rocked the country in 2022.
Dissanayake’s election marks the first time in Sri Lanka’s history that a candidate from outside the establishment parties has taken office. His National People’s Power (NPP) alliance, which he leads in conjunction with the Janatha Vimukthi Peramuna (JVP), represents a break from the traditional dominance of the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP), which have alternated in power for over seven decades.
While many herald the election as a new beginning for Sri Lanka, Dissanayake’s leadership will face significant challenges, not least of which is addressing the economic baggage left by his predecessors. The ongoing impact of an International Monetary Fund (IMF) loan, which was secured as a lifeline during the 2022 economic collapse, brings with it austerity demands that Dissanayake has pledged to revisit. However, renegotiating these terms while maintaining economic stability will be a delicate balancing act.
Anura Kumara Dissanayake: From Marginal Politician to President
Anura Kumara Dissanayake’s political journey is rooted in the Marxist ideology of the JVP, a party established in the 1960s with a revolutionary socialist agenda. The JVP initially aimed to overthrow the government through armed uprisings, staging two major insurrections in 1971 and 1987-1989. Both uprisings failed, leading to significant bloodshed and repression. Afterward, the JVP shifted toward democratic politics, and for the past three decades, it has participated in elections as a legitimate political party.
For much of its existence, the JVP remained a minor third force in Sri Lankan politics, overshadowed by the two dominant parties. However, under Dissanayake’s leadership, the party underwent significant transformation. In 2019, the JVP joined forces with several other leftist groups to form the NPP, a center-left, social democratic alliance aimed at broadening the party’s appeal to a larger voter base. Despite these efforts, Dissanayake’s initial run for the presidency in 2019 was a disappointment, with him securing only 3% of the vote.
The political environment in Sri Lanka took a dramatic turn in 2022 when the country faced its worst economic crisis in modern history. Widespread shortages of fuel, food, and essential goods led to large-scale protests, eventually toppling the government of President Gotabaya Rajapaksa. The resulting political vacuum gave rise to new political opportunities, and many Sri Lankans, disillusioned with the traditional parties, began to view the NPP as a credible alternative.
This wave of frustration propelled Dissanayake to the forefront of Sri Lankan politics. His anti-corruption platform resonated with the electorate, who largely blamed systemic corruption and mismanagement by the political elite for the economic meltdown. This resulted in Dissanayake capturing 42% of the vote in the 2024 election, a significant leap from his earlier campaign.
Despite this victory, Dissanayake faces a unique challenge as the first Sri Lankan president elected without majority support. The remaining 58% of the votes were split between candidates from the two traditional political factions. In order to effectively govern, Dissanayake’s next major hurdle will be securing a parliamentary majority in the upcoming elections, which are critical for the new president to push forward his agenda.
Economic Collapse and Recovery: The Wickremesinghe Era
Dissanayake takes office against the backdrop of a country still reeling from the aftereffects of an unprecedented economic crisis. Two years ago, in early 2022, Sri Lanka was on the brink of collapse. The country’s foreign reserves were nearly depleted, leaving the government unable to pay for essential imports like fuel, food, and medicine. Ordinary Sri Lankans faced long lines for basic necessities, while the rupee plummeted to record lows, triggering inflation rates that soared to 70%. For the first time in its history, Sri Lanka defaulted on its international sovereign debt, further deepening the crisis.
Mass protests erupted across the country, ultimately leading to the resignation of President Gotabaya Rajapaksa in July 2022. Parliament appointed Ranil Wickremesinghe as interim president, tasking him with the formidable job of steering the country out of economic ruin. Wickremesinghe’s government managed to secure a crucial loan from the IMF, which helped stabilize the Sri Lankan economy.
Under Wickremesinghe’s leadership, Sri Lanka began a surprisingly swift recovery. Inflation fell back to single digits, the currency stabilized, and by the first half of 2024, the economy had grown by 5%. The government successfully restructured its domestic debt and initiated a bilateral debt restructuring process with key creditors, including China, India, and Western nations. Just days before the election, Sri Lanka reached an agreement with international bondholders to restructure the remaining portion of its sovereign debt.
However, despite these accomplishments, Wickremesinghe remained deeply unpopular. His government’s implementation of harsh austerity measures, mandated by the IMF, proved unpopular among ordinary Sri Lankans, many of whom continued to struggle with the high cost of living. This set the stage for Dissanayake’s populist, anti-austerity platform to gain traction among voters.
Dissanayake’s Vision for Sri Lanka’s Economy: Balancing Socialism and Stability
Now that he has been elected, Dissanayake inherits an economy that, while more stable than two years ago, remains fragile. His economic policies, deeply rooted in Marxist ideology, emphasize a production-based economy, moving away from a reliance on service industries. He has made it clear that his administration will focus on building up local industries, particularly in agriculture, manufacturing, and information technology, in a bid to reduce the country’s dependence on imports.
Central to Dissanayake’s plan is his emphasis on “economic democracy,” where the government plays a leading role in coordinating economic activities through a central plan. His NPP has long argued that prosperity should be measured not merely by economic growth but by broader social indicators such as access to quality education, healthcare, secure housing, and the availability of leisure and technology for all citizens.
To achieve these goals, Dissanayake has proposed the creation of a national development bank to support local production efforts. Additionally, the NPP plans to increase government spending on education and healthcare, both of which are free and universally accessible under Sri Lanka’s social policies. These measures, he argues, will improve the quality of life for ordinary citizens and move the country towards a more equitable future.
However, Dissanayake’s policies will inevitably come into conflict with the stringent requirements of the IMF loan agreement. While the new president has acknowledged the necessity of remaining within the IMF program for the time being, he has promised to renegotiate its terms to make them more “people-friendly.” His proposed changes include raising the personal income tax exemption threshold and removing taxes on essential goods, measures that will ease the burden on low-income Sri Lankans.
Dissanayake’s NPP also plans to expand the public sector, adding more jobs even as the government continues to grapple with a high budget deficit. This populist approach could prove difficult to sustain in the long run, as the IMF agreement requires Sri Lanka to maintain a primary budget surplus of at least 2.3% of GDP. Dissanayake has pledged not to endanger economic stability by deviating from this target, but it remains unclear how he plans to balance increased government spending with the need for fiscal discipline.
Can Dissanayake Satisfy Popular Expectations?
Dissanayake’s rise to power represents a new era for Sri Lankan politics, one shaped by a disillusioned electorate seeking an alternative to the traditional parties that have ruled the country since independence. His anti-corruption platform and promises of social reform have struck a chord with voters, but delivering on these promises will be a monumental challenge.
As Sri Lanka moves forward, Dissanayake’s ability to navigate the constraints of the IMF program, restructure the economy, and deliver tangible improvements in the lives of ordinary citizens will determine the success of his presidency. With the global economic environment still uncertain, his administration will need to tread carefully, balancing populist demands with the realities of Sri Lanka’s economic vulnerabilities. Sri Lanka’s new leader represents a bold break from the past, and his presidency will be closely watched both domestically and internationally as the country embarks on this uncertain but potentially transformative journey.
