Status: 07/20/2022 3:29 p.m.
The new president Wickremesinghe must now tackle reforms quickly, analyzes the Sri Lankan expert Heinze in an interview. But it also means making unpopular decisions. Can this be okay?
tagesschau.de: What does the new president represent?
Wolfgang Heinze: Ranil Wickremesinghe is also known as “the fox”. He is a seasoned politician and has served as Prime Minister six times over the past three decades. However, he never managed to last his terms. He also has a great reputation in the West and has a lot of crisis experience. And he has the support of Parliament: many observers expected it to be a close race – but in the end Wickremesinghe won with a very comfortable majority.
To no one
Wolfgang Heinze heads the representation of the Friedrich Naumann Foundation in Sri Lanka.
Little time to gain trust
tagesschau.de: After his election, the new president said the division in the country was now overcome. Does this apply to the situation – or is it optimism?
Heinz: Wickremesinghe does not have the support of the protesters. After the resignation of the previous president, Gotabaya Rajapaksa, protesters targeted Wickremesinghe and demanded his resignation. But as long as he doesn’t have the support of the population, there can always be big demonstrations and riots – and it can go so far that Wickremesinghe must also resign in the end.
The big challenge will be: Will he be able to tackle important stages of reform and thus bring some normality back to the country in the perhaps short time that the population has granted him?
tagesschau.de: Were there alternatives to Wickremesinghe?
Heinz: After the resignation of Prime Minister Mahinda Rajapaksa – the brother of the ex-president – Wickremesinghe was the only one who wanted to become prime minister under the president. Hence, he is said to have a close relationship with the Rajapaksas, who are not popular with the people. The fear is that this will allow the Rajapaksas to continue to influence politics from abroad and may even return at some point.
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Tagesschau 12:00 p.m., 20.7.2022
Ruinous fiscal policy
tagesschau.de: What did the protesters accuse the Rajapaksas of?
Heinz: There was no solid budget under President Rajapaksa. The government itself admitted that the budget was only covered for the first four months. Expenditure for the remaining nine months was financed by printing money, i.e. via inflation – without adjusting the exchange rate at the same time. As a result, no more foreign currency entered the country and the import of important goods collapsed.
There is a severe shortage of petrol, people have to queue for miles for days to get a few liters of petrol. There are problems with medical care. The cars have not been imported since 2019, there is a shortage of spare parts. You have to drive across the country to search, but there’s no gas for that now.
tagesschau.de: Has the corona pandemic exacerbated structural problems?
Heinz: Corona was one, but not the only “external shock”. The 2019 Easter attacks had a very negative impact on tourist numbers. When the numbers improved again, Corona arrived. And when more tourists returned at the end of last year, the economic crisis became increasingly noticeable – first by hour-long power cuts, which also affected travellers, then by lack of fuel – which also makes traveling through this beautiful country difficult. And finally, following the war in Ukraine, energy prices have risen sharply. The real cause, however, was Rajapaksa’s ruinous financial policies.
Before the painful reforms
tagesschau.de: Which reforms should Wickremesinghe tackle first?
Heinz: He must first restore trust. The population must have the feeling that things can and will improve again now. Then it must return to sound fiscal policy. This means bringing the taxes that Rajapaksa cut back to previous levels. Public companies are making huge losses – he will have to realize this.
And he will have to reform the state apparatus, which employed many people under Rajapaksa. There are studies, for example, that each public bus has eleven employees. Many wonder where the efficiency is. The reforms that Wickremesinghe must tackle are painful. No one is happy when taxes go up and subsidies go down. That’s why he needs the support of the people.
tagesschau.de: Will she raise them?
Heinz: Overall, the majority of citizens are remarkably patient. Sure, there were riots, but most protests were peaceful, few were injured or killed. Security forces also held back. When the prime minister’s residence burned down, many condemned it. But there is also a noticeable radicalization. A court has effectively issued a ban on protests at the location where protests have been taking place for months. The protest movement will probably react to this.
Another impossible election
tagesschau.de: Would new elections be a solution?
Heinz: The requirement is there. But the constitution does not allow elections until March next year. The population must therefore continue to live with the deputies they elected in 2019.
tagesschau.de: Sri Lanka has long negotiated international financial assistance with the International Monetary Fund (IMF). Have the chances of an agreement increased with the new president?
Heinz: Negotiations are ongoing and there is hope for follow-on assistance and further IMF commitments later. But Sri Lanka will have to show that it is ready for the reforms and that it will implement them. Otherwise, there will be no major IMF involvement.
The conversation was led by Eckart Aretz, tagesschau.de