Sri Lanka holds its breath as new PM fights to save economy

It has been nearly three weeks since Ranil Wickremesinghe took over as prime minister of Sri Lanka with a daunting mandate to pull the crisis-weary country from the brink of an economic abyss that threatens to tear it apart.

The five-time prime minister has inherited a nation barreling toward bankruptcy and saddled with foreign debt so big that it has no money left for basic imports. Sri Lankans are struggling to access the bare necessities like food, fuel, medicine, cooking gas and even toilet paper and matches.

In his new job, Wickremesinghe left little doubt about what lies ahead. "The next couple of months will be the most difficult ones of our lives," he told the nation fed up with long lines, sky-rocketing inflation and daily protests that seem to be getting out of control.

"We must prepare ourselves to make some sacrifices and face the challenges of this period."

Since the May 17 televised speech, the seasoned politician, who also serves as the finance minister, has begun difficult negotiations with financial institutions, lenders and allies, and United Nations agencies to fill the coffers and give some relief to impatient citizens.

He has taken necessary steps like raising taxes and has pledged to overhaul government that concentrates power under President Gotabaya Rajapaksa, a model that many believe exacerbated the crisis.

He took over after days of violent protests last month forced his predecessor, President Rajapaksa's brother Mahinda, to step down and seek safety from angry crowds at a naval base. Wickremesinghe is due to deliver a much-awaited speech in Parliament on Tuesday that many hope will showcase a strategy to fix the crisis.

But time may not be on his side as reforms are slow and people want results now. He's also a one-man party in Parliament — the only lawmaker from his party to hold a seat after it suffered a humiliating defeat in a 2020 election.

"A person who doesn't have a political base has an unprecedented crisis to manage," said Dayan Jayatilleka, a former diplomat and political analyst.

Lines to buy fuel and cooking gas have stretched kilometers (miles) every day, snaking around blocks, with Sri Lankans weathering heavy rains and scorching heat to buy essential items that cost three times what they used to. Often, they have to wait days, and many still end up empty-handed.

Jagath Chandana, 43, has been waiting in line on the outskirts of the capital, Colombo, with a canister to buy cooking gas for two days. "It has been crazy. We are totally helpless. It seems even Ranil can't resolve the crisis. They (politicians) just talk but on the ground level, people are suffering," he said.

For over 50 days, protesters have camped outside Rajapaksa's office demanding he step down.

They say economic mismanagement, policy blunders like a hasty ban on imported chemical fertilizers that devastated crops, and a government stocked with Rajapaksa relatives caused the crisis. At their peak in power, six Rajapaksas occupied government posts — the crisis has seen the exit of all except one. The other five still remain as lawmakers.

Sri Lanka has suspended repayment of nearly $7 billion in foreign debt due this year. It owes $26 billion through 2026 out of a total of $51 billion.

Foreign currency reserves have diminished to just two weeks' worth of imports while Wickremesinghe prepares to obtain a bailout package from the International Monetary Fund. On Thursday, he said any bridge financing will depend on an IMF agreement and he was hopeful that negotiations would finish by the end of June. The government is targeting $5 billion for repayments and another $1 billion to pad up the country's reserves, Wickremesinghe said last week.

In such a volatile situation, Wickremesinghe has been able to bring some transparency and rationality that was lacking in the previous administration run by the Rajapaksa clan, said Jayatilleka.

But analysts also say it will be difficult for him to deliver on some of the challenges, especially as he also faces a messy battle to overhaul the constitution and strengthen the powers of Parliament to bring in much-needed reforms.

"His proposals are good for medium and long term. But people want immediate changes to take place and that they don't see," said political analyst Jehan Perera, adding that some see Wickremesinghe as helping Rajapaksa to stay in power.

In addition to demanding a new president, protesters have for weeks pushed for a complete revamp of what they say is a broken governance model.

For nearly 45 years, Sri Lanka has been ruled under a powerful executive presidential system. After a thumping election victory in 2019, Rajapaksa strengthened the system through constitutional amendments that further concentrated powers in the presidency — a move that alarmed critics at the time too.

Wickremesinghe made a key and early pitch to roll back some of the presidential powers. But such measures will not be easy and will require not just the approval of the Supreme Court but also a two-thirds majority in Parliament.

Questions remain whether Wickremesinghe would be able to push through reforms in the 225-seat Parliament where Rajapaksa's party holds the majority. Some opposition parties have already thrown their support behind the reforms, but Wickremesinghe's sole standing in the chamber could prove a major drawback. Or it could be an asset.

His party split in 2020 amid a leadership crisis, prompting most of the senior members to leave and form a new party — currently the country's main opposition.

"He has the opportunity of playing the role of a technocratic prime minister, with his expertise and experience, unconnected to any political party," said Jayatilleka.

The size of the protests since Wickremesinghe assumed duties has also been shrinking. Perera said it is tough for people to sustain the high momentum but that as long as the economic crisis continues, so will the demonstrations.

While signs of financial hardship and struggle remain in Sri Lanka, there is growing hope among some that Wickremesinghe will see them through the tough times.

"He can't perform miracles, it will take time to resolve the crisis because previous ministers have messed up," said Amila Prasanna, a carpenter. "He is trying to solve the problems, one by one, and I am sure he will do something," he said as he queued up for three days to buy gas.