Chief of Sri Lanka’s election commission R.M.A.L. Rathnayake addresses the media. File
| Photo Credit: AP

Sri Lanka will hold a presidential election on September 21 that will likely be a test of confidence in President Ranil Wickremesinghe’s efforts to resolve the country’s worst economic crisis. The date was announced in a decree the independent elections commission released on July 26. It also said nominations will be accepted on August 15.

It will be the first election in the South Asian island nation after it declared bankruptcy in 2022 and suspended repayments on some $83 billion in domestic and foreign loans. That followed a severe foreign exchange crisis that led to a severe shortage of essentials such as food, medicine, fuel and cooking gas, and extended power outages.

President Ranil Wickremesinghe is expected to run while his main rivals will be opposition leader Sajith Premadasa and Anura Dissanayake, who is the leader of a leftist political party that has gained popularity after the economic debacle.

It will be the first election in the South Asian island nation after it declared bankruptcy in 2022 and suspended repayments on some $83 billion in domestic and foreign loans. That followed a severe foreign exchange crisis that led to a severe shortage of essentials such as food, medicine, fuel and cooking gas, and extended power outages.

The election is largely seen as a crucial vote for the island nation’s efforts to conclude a critical debt restructuring program and as well as completing the financial reforms agreed under a bailout program by the International Monetary Fund.

The country’s economic upheaval led to a political crisis that forced then-President Gotabaya Rajapaksa to resign in 2022. Parliament then elected the then-Prime Minister Ranil Wickremesinghe as president.

Under Mr. Wickremesinghe, Sri Lanka has been negotiating with the international creditors to restructure the staggering debts and to put the economy back on the track. The IMF also approved a four-year bailout programme last March to help Sri Lanka.

Last month, Mr. Wickremesinghe announced that his government has struck a debt restructuring deal with countries including India, France, Japan and China — marking a key step in the country’s economic recovery after defaulting on debt repayment in 2022.

The economic situation has improved under Wickremesinghe and severe shortages of food, fuel and medicine have largely abated. But public dissatisfaction has grown over the government’s effort to increase revenue by raising electricity bills and imposing heavy new income taxes on professionals and businesses, as part of the government’s efforts to meet the IMF conditions.

Sri Lanka’s economic crisis

Sri Lanka’s crisis was largely the result of staggering economic mismanagement combined with fallout from the COVID-19 pandemic, which along with 2019 terrorism attacks devastated its important tourism industry. The coronavirus crisis also disrupted the flow of remittances from Sri Lankans working abroad.

Additionally, the then-government slashed taxes in 2019, depleting the treasury just as the virus hit. Foreign exchange reserves plummeted, leaving Sri Lanka unable to pay for imports or defend its beleaguered currency, the rupee.

Under the agreements with its creditors, Sri Lanka will be able to defer all bilateral loan instalment payments until 2028. Furthermore, Sri Lanka will be able to repay all the loans on concessional terms, with an extended period until 2043. The agreements would cover $10 billion of debt.

By 2022, Sri Lanka had to repay about $6 billion in foreign debt every year, amounting to about 9.2% of gross domestic product. The agreement would enable Sri Lanka to maintain debt payments at less than 4.5% of GDP between 2027 and 2032.

President of Sri Lanka Ranil Wickremesinghe.
| Photo Credit: PTI

Sri Lankan President Ranil Wickremesinghe will contest the Presidential election as an independent candidate, his aide said on July 7.

Deputy Chairman of the United National Party Ruwan Wijewardene confirmed that the presidential election will definitely be held and Mr. Wickremesinghe, 75, will contest the election as an independent candidate, News 1st reported.

“Only one leader possesses the knowledge to solve Sri Lanka’s economic crisis. That is Ranil Wickremesinghe. He has proved it with his actions,” he was quoted as saying by the news portal.

On July 7, Election Commission Chairman R.M.A.L. Ratnayake said the electoral body would be legally empowered after July 17 to announce the date for the election.

Mr. Ratnayake added that the commission will announce the date for the next presidential poll before the end of this month.

The Election Commission in May said the presidential election would be conducted between September 17 and October 16.

Mr. Ratnayake said the commission is currently in the process of putting final touches to the 2024 electoral register which will be the basis for the election. Over 17 million would be eligible to vote in the election as per the revised list, officials said.

In April 2022, the island nation declared its first-ever sovereign default since gaining Independence from Britain in 1948. The unprecedented financial crisis led President Gotabaya Rajapaksa to quit office in 2022 amid civil unrest over his inability to handle the crisis.

In July 2022, Mr. Wickremesinghe was elected through parliament to become stop-gap President for the balance term of Mr. Rajapaksa.

Mr. Wickremesinghe, also the Finance Minister, hasn’t made any public statement on his bid for re-election.

“This election isn’t merely about selecting individuals but about choosing the most effective system for our country’s progress. If you believe in the merits of the current approach, let us proceed accordingly,” the President’s Media Division quoted him as saying earlier.

The government under Mr. Wickremesinghe has set in place hard economic reforms as dictated by the International Monetary Fund (IMF) programme.

President Wickremesinghe last month said that his government has finalised a long-delayed debt restructuring agreement for $5.8 billion with its bilateral lenders, including India and China, in Paris to meet a key condition of an IMF bailout.

Colombo:

Sri Lanka’s Tamil political parties are planning to field a candidate from the minority community in the presidential election to present a credible and acceptable political solution for them, a senior community leader said.

Sri Lanka is scheduled to hold the next presidential election in the last quarter of 2024 to elect a new President by mid-November.

Addressing reporters at his residence in the eastern port district of Trincomalee, senior Tamil leader R Sampanthan said that Tamils will be well served in the forthcoming presidential election by supporting a candidate who would pledge to resolve all issues concerning the minority through an acceptable political solution.

The political parties that form the Tamil National Alliance (TNA) have proposed to field a Tamil candidate, he said. But the Tamils must understand that such a candidate would not be able to pull much support and as such the parties must decide on the best course of action, he added.

Mr Sampanthan stressed that the candidate who would present a credible and acceptable political solution for the Tamils by merging the north and east provinces should be an important political factor for the Tamils.

Asked if the Tamils are likely to support incumbent President Ranil Wickremesinghe if he comes forward to be a candidate, R Sampanthan said it would depend on talks with him following his handing over of the nominations to contest the election.

In Sri Lanka’s presidential election since 1982, Tamil candidates have contested the election but in most of them, they have by and large supported the Opposition front-runner against the incumbent.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)