Editorial

The year 2025 of the Gregorian calendar ends next week—a year of mixed happenings and emotions for the people swept asunder by a devastating natural disaster, over and above a delicate economy. Factor in a fledgling government desperate to make a mark despite the odds that include political setbacks at elections and then Cyclone Ditwah.

Last year, we separated the mixed bag of events of that year, and so we will summarise it for 2025.

The Good: The Government continued with the IMF agenda, emphasising the ‘no shocks’ budget for 2026, ensuring the country’s economic recovery, and overcoming the existential angst that a Marxist party in power would abandon the private-public partnership of a liberalised economy. It assured the international financial community of stability and demonstrated results: exports earned more foreign exchange; foreign reserves grew, even allowing for the removal of the import ban on vehicles; tourist arrivals increased; and remittances from overseas workers were on the rise.

Following November’s cyclone and in view of Sri Lanka’s ensuing vulnerability, world-renowned and IMF-wary economists are calling for the immediate suspension of Sri Lanka’s external sovereign debt payments and a new restructuring that restores debt sustainability under the new circumstances.

The Bad: Seven major MoUs were signed with India and were asked to be kept secret from Sri Lankans. Local government elections gave ambiguous signals from the popular vote, unlike the previous presidential and parliamentary elections, and resulted in dogfights for control of councils, leading to numerous budgets for 2026 being defeated.

Despite ‘Clean Sri Lanka’ and ‘system change’, the Government has also shown signs of increasing intolerance, confronting even the Constitutional Council intended to act as a check on executive power. It has displayed aversion to bad press and unleashed the CID on accredited journalists and drawn criticism for its perceived efforts to manipulate independent commissions such as the Police Commission and the Right to Information Commission—created after extensive battles for democracy. Conspiracy theories of an administrative ‘Deep State’ have been aired as a prelude to wanting to take charge of autonomous departments like the Attorney General and the Auditor General. The anti-corruption zeal has led to widespread paralysis in public service action.

The Farcical: The MP who made a joke of himself and his party last year with false claims to a doctorate made headlines again, sending innocent motorists to hospital. Some of his colleagues contributed with their assets’ declarations and performances at international conferences. Policemen, meanwhile, are being hung out to dry for acting/not acting against ruling party members breaking the law.

As much as there is a tinge of sympathy for the Government for the obstacles (placed within and outside), compounded now with having to deal with the deaths and debris from the cyclone, its undivided attention throughout 2025 on neutralising its political opponents has been dismaying.  Its focus may have been better directed to areas of effective administration, governance and delivery, not least before Cyclone Ditwah hit landfall instead of vindictive ‘Lawfare’ and revenge politics by weaponising the CID.

A daunting challenge lies ahead in 2026. From the euphoria of being carried on the shoulders of the masses to power and place last year after a long and bitter struggle to the extreme conditions it now faces a year later, it might well be said that for the Government ‘it was the best of times; it is now the worst of times’.

In moving forward, Sri Lanka will need astute economic and financial expertise in strategising the devastated economy and absorbing the costs of post-Ditwah compensation, long-term reconstruction and recovery, constrained as it is by an IMF programme and debt repayments by 2028. An IMF USD 200 million offer of quick liquidity for relief and recovery work on top of the Indian USD 350 million soft loan announced this week will only add to the country’s debt burden.

In the post-Ditwah ‘Rebuilding Sri Lanka’ phase, the Government will be forced to rely even more on foreign assistance, and in this unfair world, there’s nothing called ‘philanthropy’ or a ‘free lunch’, even in what is ostensibly humanitarian assistance.

A foreign policy beyond platitudes

One country’s misery could be another’s opportunity. Earlier this week, senior leaders of two major players in the region swung by Sri Lanka to stamp their respective presence in the wake of Cyclone Ditwah—one more definitely than the other.

The sudden visit by the Foreign Minister of India wearing the hat of ‘special envoy’ of his prime minister last week, hurriedly wedged in during a visit by a Chinese delegation, seems to have taken the Sri Lankan hosts by surprise (details in the Op-ed Political column). He carried a letter from the Indian PM saying, “Sri Lanka will always find India by its side,” and in a subsequent press statement, President Anura K. Dissanayake hailed “a new era in Indo-Sri Lanka relations“.

India’s Neighbourhood First and Vision Mahasagar, expanding its maritime reach, together with the USD 450 million relief package announced by the special envoy, firmly planted his country’s flag on the next phase of the post-disaster reconstruction landscape in Sri Lanka. India’s footprint was also to be expanded through FDIs (Foreign Direct Investments).

This was virtually in the presence of the rival maritime giant, China, in town with a delegation of its own, for now announcing no more than expressions of readiness to share expertise and goodwill, over and above the emergency and humanitarian assistance already rendered. Such are the complexities Lanka’s foreign policy will have to grapple with as major powers prioritise the Indo-Pacific region for their own global objectives and the inevitable geopolitics of humanitarianism behind the altruistic post-Ditwah solidarity.

In faraway Washington this week, the next US ambassador to Sri Lanka told their Senate, “Sri Lanka’s strategic location makes it a focal point for US efforts to promote a free and open Indo-Pacific and counter adversarial influences, including China’s growing presence in the region.”

There will be a need to progress beyond a foreign policy of simply expressing ‘deep appreciation and gratitude’ to foreign donor nations. In expecting to mobilise further external assistance, bilateral, multilateral or through donor conferences for ‘Rebuilding Sri Lanka’, the Government must be aware of the humanitarian and donor fatigue of the wealthy Global North, bogged down by its own financial commitments to wars in West Asia and Europe.

The overall mood, as spelled out in the 2025 National Security Strategy of the USA, is one of retreat from idealised universal goals of solidarity to the promotion of its own (Global North) national interest.