Shifting Political Dynamics in Sri Lanka: Implications for India-Sri Lanka Relations

Analysis

By Harini Vallal J

The results of the presidential elections, announced on September 22, 2024, marked a significant political shift following the victory of Anura Kumara Dissanayake, the Marxist-leaning leader of the Janatha Vimukthi Peramuna (JVP) party and the National People’s Power coalition. This outcome signals a substantial change in the political landscape of India's neighboring country, following a challenging phase of economic recovery. Dissanayake's win represents a departure from traditional political elites and the focal points of previous elections. The main focus was the country’s broken economy that began in 2022, triggered by structural economic issues like budget and trade deficits, piling debt, and the severe depletion of foreign reserves, which led to a shortage of essential commodities and hyperinflation. The winning of the JVP party, which signifies a potential shift towards a left-leaning and Marxist framework for economic policies, has significant impact for Sri Lanka’s neighbouring countries and the broader geopolitical landscape.

The newly Elected Leader and shift in the Political landscape

Born on November 24, 1968, in Galewala, a multicultural and multi-religious town in central Sri Lanka, Anura Dissanayake rose to prominence in Sri Lankan politics through his affiliation with the JVP. He was elected to the JVP’s central committee in 1997 and became its leader in 2008. Traditionally, the Janatha Vimukthi Peramuna (JVP) was an anti-capitalist nationalist movement with a strong anti-Indian stance, leading an armed revolt against the Sri Lankan government after the signing of the Indo-Sri Lanka Agreement in 1987. However, since assuming leadership, Dissanayake has apologized for the group’s violent past. He positioned himself as a candidate for change, capitalizing on nationwide discontent with previous leaderships. This year, he won the presidential election, becoming the first leftist president of Sri Lanka, securing 42.31 percent of the votes in the first round. Dissanayake has promised to implement anti-corruption measures and prioritize repaying Sri Lanka's debt.

Dissanayake’s Economic Policies and Impact on India

Dissanayake’s presidency heralds a commitment to Marxist economic principles, with a focus on reducing inequality and reshaping the economic landscape through state intervention. He advocates for an economic model that prioritises collective decision-making, coordinated actions through a central government plan, and emphasises “economic democracy.” His party focusses on improving local production and transforming the country into a production-based economy. His platform wishes to reduce reliance on imports by focussing on sectors such as manufacturing, agriculture, and information technology. To support these activities, the government plans to establish a development bank, alongside increased government spending on basic needs such as education and health care. The government has also planned on increasing public sector jobs, despite the ongoing effort to reduce the government workforce to manage the deficit. Acknowledging the need to stay within the IMF program considering the severity of the economic crisis, he vowed to renegotiate with the IMF to make it more people friendly. These plans, while appealing, reflect a populist approach that could possibly strain government revenues while aiming for long-term stability.

In the South Asian region, India is experiencing a gradual decrease in its number of strategic partners. It is imperative for India to uphold strong ties with Sri Lanka to counteract China's influence and safeguard its own security and national interests. Moreover, the country is strategically placed in the Indian Ocean and is in close proximity to India’s southern coast, where several of India’s vital security and scientific installations, such as nuclear power plants, space research centres, and naval bases, are located.

Dissanayake’s approach poses both challenges and opportunities for India. His scepticism towards foreign investments over foreign control may lead to a rebalancing of external relations, particularly of Chinese investment. At the same time, along with the emphasis on Sri Lanka’s sovereignty, it could mean that he may not automatically favour India in all dealings and also lead to increased state control over key sectors such as trade to protect local industries, which could create friction.

The Hambantota Port lease to China has been a focal point of concern for India, as it provides China a stepping stone in the Indian Ocean. This arrangement for 99 years has raised concerns about the potential for military use, although the officials of Sri Lanka have assured that the port will be only for commercial purposes. This port, along with other infrastructure investments, has tied Sri Lanka’s economy closely to Chinese interests, deepening its debt and dependency on Beijing. One view is that, considering Dissanayake’s past criticisms on these deals, Sri Lanka’s engagement with China may take on a more transactional, pragmatic character under his leadership. India could use this opportunity to offer a more sustainable alternative, which could further strengthen relations as India has been a willing partner in Sri Lanka’s debt restructuring, unlike China.

On the other hand, some scholars argue that Dissanayake would be China’s preferred candidate due to the centre-left political tradition of the NPP coalition and the JVP party tracing its origins to the pro-China faction of the Sri Lanka Communist Party in the 1960s. Although the NPP is not an anti-India coalition, and Dissanayake even acknowledges India has supported it at critical times with a massive infusion of finance and materials, its growing popularity stems largely from its strong stance against the sale of national assets to foreign companies. The NPP has expressed strong opposition to the Adani Group's control acquisition, citing its close ties with the Modi government in critical sectors such as ports, renewable energy, and airports. Dissanayake has also voiced disapproval of the contentious energy deal with the Adani group, contending that the agreement is not in the best interest of the country.

Even if the coalition turns anti-Indian for the projects, it realises India and her concerns cannot be ignored, especially when it uses India to balance China. Some scholars state that JVP recognises that it must come to terms with New Delhi, and the new government will have a relatively limited impact on the relationship between India and Sri Lanka due to a few structural factors, such as its economic dependence on India with regard to the $4 billion assistance. Additionally, the government must remain sensitive to Tamil Nadu's sentiments, particularly regarding the 13th Amendment, which promises power devolution to the Tamil minority, an issue India supports. Although Dissanayake has expressed positive emotion to this issue, stating that Tamil people should be given a strong guarantee of rights in politics and to make decisions for themselves to establish peace in the country and to focus on the future, the challenge remains in translating these sentiments into actionable policies. Furthermore, the JVP government will need to carefully manage its ties with China and will be watched by New Delhi, as it is wary of Beijing's growing influence in Sri Lanka.

To conclude, this election, which signals a shift in Sri Lanka’s political landscape, could offer a new opportunity for India-Sri Lanka relations to evolve, rooted in mutual respect, regional security, and economic cooperation, if Sri Lanka takes India’s security interests into consideration. Dissanayake’s Marxist economic policies and scepticism towards foreign control may lead to a re-evaluation of Sri Lanka’s foreign policy orientation. Pragmatically, the new government may engage with both India and China selectively, negotiating a viable pathway between these powers. There is much Sri Lanka can gain from further integration with India’s growing economy, especially as Dissanayake's commitment to ensuring Tamil rights presents both opportunities and challenges for bilateral cooperation, which could deepen economic and political ties. It is crucial for India to closely monitor these shifts and proactively engage with Sri Lanka to safeguard its strategic interests.

Disclaimer: This paper is the author's individual scholastic contribution and does not necessarily reflect the organization's viewpoint.