What Sri Lanka’s Marxist-leaning leader means for the economy – Asia Times

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On September 22, 2024, Sri Lankans voted for a new course in their government, naming a communist activist as its leader.

Anura Kumara Dissanayake’s rise is a departure from the traditional parties and politicians who are to blame for the country’s 2022 economic decline.

Dissanayake referred to the success as a “fresh start” for Sri Lanka, but he will still need to handle the financial baggage that his predecessors left behind and the effects of the painful poverty demands for an International Monetary Fund mortgage.

The Conversation spoke with Vidhura S. Tennekoon, an Indiana University economist with an emphasis on Sri Lanka’s market, to describe the challenge facing the new president and how Dissanayake will approach it.

What do we hear about Sri Lanka’s fresh president?

Anura Kumara Dissanayake leads both the National People’s Power empire, or NPP, and the Janatha Vimukthi Peramuna, or JVP. Rooted in Communist philosophy, the JVP was founded in the 1960s with the aim of seizing electricity through a socialist revolution.

The party then shifted to democratic elections and has been so for more than three decades following two unsuccessful armed rebellion in 1971 and 1987-89, which led to the deaths of tens of thousands of lives.

Prior to this election, the JVP remained a small third party in Sri Lanka’s social landscape, while the majority of energy moved between relationships led by the United National Party and the Sri Lanka Freedom Party, or their ilk.

In 2019, under Dissanayake’s command, the NPP was formed as a communist alliance with several other businesses. While the JVP continues to adhere to Communist rules, the NPP adopted a center-left, social democratic system – aiming to get broader public assistance.

Despite these attempts, Dissanayake garnered only 3 % of the voting in the 2019 national poll.

However, during the 2022 financial problems, the political scenery drastically changed. Some Sri Lankans, frustrated with the two traditional functions that had governed the country for over seven years, turned to the NPP, seeing it as a reliable alternative.

The group’s anti-corruption approach, in particular, resonated strongly because some people blamed political problem for the economic decline.

It helped provide 42 % of the ballot to Dissanayake.

Although it is a major accomplishment, it also marks a historic milestone for Sri Lanka because candidates from the two standard parties received the majority of the vote, and Dissanayake is the first leader to get elected without bulk support.

His main concern will be obtaining a legislative majority in the upcoming elections, which is a necessary stage for his leadership to properly manage.

What kind of business is Dissanayake obtaining?

Sri Lanka experienced the worst economic crises in its background two and a half years earlier. The nation struggled to pay its bills as foreign reserves almost ran out, leading to a significant shortage of important goods.

Standard blackouts became a part of daily life, as well as longer lines for cooking oil and gas. The Sri Lankan rupee dropped to a record low, causing 70 % prices. The nation’s first default on its foreign sovereign bonds was the country’s economy, which was contracting.

In response to this, a significant opposition action was born, which led to the resignation of Gotabaya Rajapaksa. In July 2022, Parliament appointed Ranil Wickremesinghe to finish the remaining of Rajapaksa’s name.

A group of people hold aloft a flag and a giant image of a face.
On May 28, 2022, protests against the former president’s standard property Gotabaya Rajapaksa. Photo: Tharaka Basnayaka / NurPhoto via Getty Images/ The Talk

In the two years that followed, Sri Lanka’s market made an unexpectedly fast healing under Wickremesinghe’s management. After securing an arrangement with the International Monetary Fund, the money stabilized, the central bank rebuilt foreign resources, and inflation fell to single figures. The business had grown by 5 % by the first half of 2024.

The government effectively restructured its private loan, followed by a reform of its diplomatic debt – that is, government-to-government money, mainly from China but also from India and Western counties, including the United States. An agreement was reached with foreign borrowers just days before the election to rebuild the remaining royal loan.

Despite these accomplishments, Sajith Premadasa and Dissanayake, the opposition chief, and Wickremesinghe won the election for president. Wickremesinghe’s unpopularity was generally a result of the harsh austerity measures put in place as part of the IMF-backed stabilization program.

Dissanayake then inherits an sector that, while more secure, remains vulnerable. Yet as voters anticipate him to fulfill common demands, he will have limited room to run away from the carefully planned financial course that his predecessor had charted.

How does Dissanayake plan to improve Sri Lanka’s sector?

Dissanayake will probably pursue policies that reflect the political parties’ social decisions rather than his own opinions as a leader of the Marxist party. He emphasizes the importance of “economic democracy,” and advocates for an economic system where actions are coordinated through a central government program.

His group believes that the overall quality of life should be taken into account when determining growth rather than just economic growth. They argue that people need more than just simple needs — they require safe housing, food, health care, training, access to technology and enjoyment.

Dissanayake’s long-term perspective is to convert Sri Lanka into a production-based market, focusing on industries like manufacturing, crops and data systems rather than services industries.

To reduce the need for imports, one of the important guidelines is to encourage local production of all worthwhile food products. To help these actions, the NPP plans to establish a growth bank. Moreover, they NPP proposes increasing state spending on education and health care, in line with Sri Lanka’s history of providing free, widespread exposure to both.

Where do IMF funding end now?

Generally, Dissanayake’s group has been critical of the IMF and its legislation tips. Given the seriousness of Sri Lanka’s economic problems, Dissanayake has acknowledged the need to remain a part of the IMF programme for the time being. But he has vowed to restructure with the IMF to make the plan more “people-friendly”.

The personal income tax deduction level should be doubled to the current level in accordance with Dissanayake’s recommendations, as well as eliminating taxes on vital goods. In addition, Dissanayake’s group intends to add jobs to the public business despite the ongoing efforts to reduce the authorities workforce to manage the deficit.

Dissanayake’s populist policies, aimed at attracting large support during the promotion, will eventually burden government revenues while increasing expenses. To ensure debt sustainability, Sri Lanka must maintain a primary budget surplus of at least 2.3 % of GDP.

Dissanayake has pledged to stay within this target while maintaining the nation’s economic stability. His plan is to increase the effectiveness of tax collection, which he believes will bring in enough money to pay for his policies.

Additionally, his party has criticized the deal struck by Wickremesinghe’s government with international lenders, calling it unfavorable to the country. Dissanayake has promised to look for more advantageous terms. Since these agreements are already in place, it is still unclear whether the new government will attempt to renegotiate them.

Vidhura S Tennekoon is assistant professor of Economics, Indiana University

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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Xi’s property fix has a local government problem – Asia Times

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Local government leaders who appear to have failed to understand the importance of reviving China’s home problems are putting an unforeseen stop to Xi Jinping’s most daring attempt to do so.

The efforts that were announced four months ago had headlines surrounding the 300 billion yuan ( US$ 42.5 billion ) of central bank cash being used to buy up unsold homes. However, the true force of the plan was to encourage local authorities to increase the amount of housing available nationwide.

So far, though, fewer than 30 coast towns out of the more than 200 Beijing hoped to incentivize had heeded the telephone. This raises a enticing question: Are municipal leaders being criminal, or is their silence because they see a bigger portrait that Xi’s group is missing?

It might be the former, however. Local government officials who defy Beijing do n’t typically achieve high status in Communist Party circles. In contrast, provincial functionaries are more likely to succeed by producing economic growth rates and development indicators that are above the national average.

However, it’s likely that local authorities in the world’s funds, who are dealing with aging laborers, are more aware of their balance sheets than Premier Li Qiang or Finance Minister Lan Foan’s workers.

And this Beijing-ordered housing boom may be a result of the nation’s already depressed local government financing vehicle ( LGFV ) debt burden.

More than half of China’s property problems may pull on another two to five years, according to a Bloomberg study of 15 China analysts. If so, China’s negative forces had become much more entrenched.

And depreciation becomes even more difficult to eradicate over time as Japan continues to demonstrate this.

Team Xi rejected an International Monetary Fund proposal next month to launch massive waves of northern federal funding to finish empty housing projects in Asia’s largest business. A governmental collapse of almost US$ 1 trillion is suggested by the IMF.

The 300 billion yuan save deal, which Beijing unveiled in May, is far below the 1 trillion to 5 trillion yuan that some leading economists believe is required to solve the house problems.

The IMF, however, has taken pains to inform Beijing against creating any “expectation of potential state bail-out and so social hazards”, as Zhang Zhengxin, the IMF’s executive producer for China, puts it. Xi’s group, Zhang says,” may continue to apply market-based and rule-of-law rules in completing and delivering these products”.

Michelle Lam of Societe Generale SA uses the word” somewhat disappointing” when she refers to the IMF’s individual caution around. China’s financial jazz may last for as long as Beijing drags its foot on aiming enough financial power at the house industry.

China’s central bank made a number of new policy announcements to boost the economy on Tuesday ( September 24 ). Women’s Bank of China Governor&nbsp, Pan Gongsheng&nbsp, precise methods to reduce to its essential short-term interest rates, improve bank lending to companies and consumers, and lower mortgage rates for existing housing loans.

Pan speculated that there might be a further reduction in reserve requirement ratios of between 0.25 and 0.5 %. Nevertheless, though,” the rhinoceros in the room is the home business”, says Xu Gao, chief analyst at Bank of China International. He continues,” The current plan to maintain the property business is clearly not enough.”

Count Xu among those who believe a 3 trillion yuan investment may be required to stabilize the real estate industry.

Former PBOC Governor Yi Gang made headlines earlier this month when he claimed Beijing officials” should focus on fighting the negative pressure” through “proactive governmental policy and flexible financial plan.”

The PBOC’s concern now appeared to be being addressed, problems that were validated last week by its decision to remain neutral as the Federal Reserve cut US interest costs by 50 basis points.

In certain ways, Beijing’s reluctance to put stimulus in the short-run has had a magic coating. In light of industry conflicts with the US and Europe, according to economist Gabriel Wildau at consulting firm Teneo, Xi and Li are placing a higher priority on raising China’s competitive sport in technology and production.

However, current information on fixed property investments, industrial output, and retail selling suggested Beijing’s 5 % economic growth goal for this time is becoming more and more of a long-shot. This may have propelled the PBOC to take action.

At a business forum in Beijing last week, Zhu Guangyao, a former vice minister of finance, said that in the” short term, we must really focus to be sure to successfully achieve this year’s 2024 growth goals“. He added that” we still have confidence to reach” this year’s 5 %.

As such,” there’s a good chance that the People’s Bank of China will lower rates and banks to lower]benchmark rates ] soon”, write analysts at Commerzbank. The Fed rate cuts allow room for PBOC to reduce, and lackluster growth necessitates monetary policy easing.

The chance of a vicious economic cycle rises without more incisive policy decisions. In particular, the plunge in land sales that’s currently decimating local governments ‘ budgets could gain momentum. That would make it even more difficult for municipalities to finance their current priorities, ignoring the possibility of acquiring excess real estate to save Xi’s Beijing administration.

Local governments could in fact attempt to raise money to buy up housing through special bond issues. However, it is only if municipal leaders can find enough buyers before selling numerous local government bonds. If all investors, regardless of size, have doubts about China’s financial system, that is easier said than done.

Yet longer-term reforms are even more important. Although exports and domestic demand-driven growth are the focus of recent efforts to rebalance the growth engines, progress is slower than anticipated. Similar to how social safety nets are constructed to encourage households to save less and spend more, is the same.

The LGFV piece of the puzzle continues to be a significant wildcard. These roughly 4, 000 entities created to fund local infrastructure projects carry debts topping$ 8.5 trillion, by the IMF’s estimates.

One problem is the lack of information about these debts. Analysts at Fitch Ratings, for example, are skeptical about Beijing’s claims that the ratios of LGFV debt relative to local GDP have declined.

Rather, moves to reclassify debt to avoid LGFV status, often to bypass bond issuance restrictions, largely explain this supposed trend.

As Fitch analyst Harry Hu notes, the rating company identified 324 entities, about 8 % of the 4, 000 entities that, by June 2024, were no longer classified as LGFVs on a widely used Chinese bond data platform.

We rate 34 of these businesses, which indicates that reclassification was likely to facilitate bond issuance rather than be a result of business transformation, Hu says.

However, the LGFV conundrum is a challenging one. Independent economist Jonathon Sine explains that” a decade ago Beijing not only set out to constrain LGFVs, but eliminate them,” in a recent report on the “rise and fall” of these off-balance sheet entities. Fiscal restructuring proved insufficient. Localities still have incredibly broad roles and mandates today. Will they be forced to abdicate or will they find themselves without any funding?

Sine adds that “in this evolving context, will local officials face new incentives to keep their all-purpose handyman, the LGFV, alive and kicking? Will LGFVs vanish as Lenin once predicted the Soviet Union would? Who will make them? With a new round of audits sweeping the nation alongside top-down inspection tours and the ongoing anti-corruption campaign, what might become of China’s … LGFVs”?

As 2025 approaches, it’s anyone’s guess. However, it suffices to say that the extent to which local governments cooperate with Beijing will be crucial for property sector stability in the long run.

Finding a more activist response from Beijing may be necessary, in terms of providing state funding and developing a mechanism to revive non-performing assets. &nbsp,

Another key issue: Xi and Li ensuring expeditious and transparent implementation. That calls for a bold and obvious shift away from focusing on economic advancement.

Over the past two years, Xi’s team has stuttered from pledge to pledge to develop a plan to significantly lower the ranks of property developers by removing toxic assets from their balance sheets.

One possibility about which investors have long buzzed is Beijing adopting a&nbsp, Resolution&nbsp, Trust&nbsp, Company-like&nbsp, model the&nbsp, US used to address the&nbsp, savings-and-loan crisis of the 1980s. That could save a decade in Japan, where a sector essential to growth gains a new lease on life.

Doing so would afford Xi’s reform team&nbsp, an opportunity to confound the naysayers and reinvigorate&nbsp, China Inc. Additionally, it would fulfill Xi’s promises to prioritize the quantity over the quality of growth. Change the narrative that China is repeating the mistakes Japan made in the 1990s as a result of its bad-loan crisis and deflationary nightmare.

However, for the moment, at least one thing is certain: Beijing’s hopes that local governments will come to grips with the housing crisis are n’t working so far.

Follow William Pesek on X at @WilliamPesek

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Global economic activities increasingly viewed through security lens: PM Wong

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Against this backdrop, Singapore will have to get its own way forth, he said. Through local and international forums, this means remaining opened and pushing for complimentary flows of industry and investments. &nbsp,

We want Singapore to get their choice partner, “importantly, as countries and companies outside seem to diversify their risks and broaden their range of partners. We want to act as a trustworthy and trustworthy base from which they can operate, said Mr. Wong.

Using a fund comparison where professionals are always looking for “alpha” or the extra advantage that drives higher returns, Mr Wong said Singapore’s “greatest supply of alpha” lies in its reputation for respect, dignity and reliability.

” These features are a special source of competitive advantage… and it’s very difficult for others to recreate. I believe what’s real for Singapore applies to Temasek”, he said.

Yet as Temasek embarks on its second phase of transformation, these values&nbsp, – ranging from an adherence to excellent standards and values, an ability to think long-term, grow with proper discipline and to add to the Singapore brand of quality, reliability, discipline and integrity -&nbsp,” cannot and must never change”, said Mr Wong.

These qualities make Temasek a well-known brand, and these qualities will help him maintain his value and reputation as a long-term partner.

Mr. Wong also touched on Temasek’s belief that “doing well, doing right, and doing good” in his speech.

Balancing and achieving all of these multiple goals is challenging, he said. Temasek and its portfolio companies ‘ ability to accomplish their goals depends a lot on their leadership and workforce.

He then expressed his gratitude to all the board members who have and continue to serve on Temasek’s behalf.

At the anniversary dinner, former chairmen Mr. Y Pillay and Mr. S. Dhanabalan were among those who were present. &nbsp,” They gave their hearts and minds, and their sweat and tears to build what we have today … We owe them all a great debt of gratitude”, said Mr Wong.

The prime minister&nbsp, noted that the government “has been careful not to have any role or influence in Temasek’s investment’s decisions”. Instead, its approach “has been to hold the board accountable for Temasek’s performance” .&nbsp,

” But this approach has been made possible only because we have board members who are committed and capable, and who can be trusted to work with the management to protect what we have inherited from Temasek, build on it, and pass it on to new generations in better shape than we started,” he said.

In closing, he said:” Tonight, I would like to put on record my appreciation to everyone in Temasek and the portfolio companies. Over the past five decades, we appreciate your numerous contributions.

I want to say a big” thank you” to everyone who has contributed to Temasek and the wider Temasek family, both past and present.

Temasek, which celebrates its 50th anniversary this year, has marked 2024 with initiatives such as the set-up of a S$ 150 million fund for skills training and talent development in Singapore.

It announced at the anniversary dinner that it would set aside$ 100 million as a concessional capital for climate change to help raise money for less-than-bankable projects.

It also launched a commemorative book- titled” By Generations, For Generations: Fifty Years of Temasek As Told By The People Who Shaped It’ ‘ – that chronicles key events and milestones of the firm over the past 50 years.

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Pacific Island security cooperation still crucial for Australia – Asia Times

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This article first appeared on Pacific Forum, and it has since been republished with your type agreement. Read the original below.

Australia launched its National Defense Strategy ( NDS ) in April 2024 by&nbsp, stating&nbsp, that the country will remain the “partner of choice” for the Pacific Island countries ( PICs ) when it comes to security cooperation. But why does this standing subject to Australia?

Australia, as a&nbsp, end energy, is a vital regional head in the Pacific. Since the end of World War II, Australia has been in the Pacific place for safety assistance. Australia continues to be one of PIC’s biggest dealing partners and sponsors. Since 2008 Australia has &nbsp, invested&nbsp, nearly A$ 14 billion of its official development assistance in the Pictures.

Being “partner of option” remains a key component of Australia’s NDS for the PICs, for many reasons, and now that competition with China for influence in the Pacific is a continuous reality, this means using Australia’s foreign influence and relationships to advocate for the Pacific’s needs.

First, climate change remains one of Australia’s best foreign policy interests. As a pro-Paris Climate Accord position, Australia has &nbsp, played&nbsp, a major responsibility since 2015 in addressing the climate change matter in the Pacific and worldwide. In reality, Australia’s major &nbsp, global growth initiatives&nbsp, have been driven mainly by its climate policy agenda.

Climate change remains the&nbsp, second largest safety threat&nbsp, in the region and since Anthony Albanese’s Labor authorities took office in June 2022, a more transformative&nbsp, approach&nbsp, has been taken to address the issue. Through its assorted&nbsp, climate investment work, Australia aims to&nbsp, reduce&nbsp, carbon emissions by 43 % in 2030 and reach net zero in 2050.

Australia’s increased engagement in the Pacific in its climate action efforts has led the country to&nbsp, <a href="https://www.argusmedia.com/en/news-and-insights/latest-market-news/2351128-pacific-islands-back-australia-joint-bid-to-host-cop-29″>receive the full support&nbsp, of the Pacific Islands Forum ( PIF ) members of Australia’s bidding to co-host the 31st&nbsp, Conference of the Parties ( COP31 ) in 2026 with PIF.

Second-largest challenge for Australia to be a companion of choice for the Pictures in security cooperation is geostrategic competitors. The geostrategic competitors between the US and China has &nbsp, intensified&nbsp, in the region.

As a key ally of the US Canberra has been involved in a variety of initiatives to counteract the rise of China in the Pacific even though the great power rivalry continues to be a  concern  for the PIF members ( including Australia ).

China has emerged as a global powerhouse and is advancing regionally in the Indo-Pacific. China’s wedding in the Pacific has thus far largely been about economic growth.

Through its Belt and Road Initiative ( BRI), for instance, China has provided infrastructure projects in countries like Papua New Guinea ( PNG ), &nbsp, Solomon Islands&nbsp, and&nbsp, Vanuatu.

However, China’s energy to&nbsp, establish&nbsp, a bilateral security deal with Solomon Islands in 2022 has changed the entire narrative of energy relationships in the Pacific given that Australia and the US have been the PICs ‘” standard safety partners”.

The term “partner of option” in security cooperation falls under the umbrella of a standard protection partner, in which Australia tightly adheres to its foreign policy through dialogue with its Pacific neighbors and ensures that the US maintains its status as the Pacific power.

While Australia, within the course of a season, &nbsp, signed three diplomatic security agreements&nbsp, with Vanuatu, Tuvalu, and Papua New Guinea to maintain its influence in the region in security assistance, China’s growing influence in the Pacific issues and concerns the concept of “partner of selection”.

In her recent interview, Sen. Penny Wong, Australia’s foreign affairs minister&nbsp, stated&nbsp, that:” ]w ] e are now in a position where Australia is a partner of choice, but the opportunity to be the only partner of choice has been lost and we’re in a state of permanent contest in the Pacific]with China ] —that’s the reality”.

Australia, apart from its security engagement with the PICs, also supports a free and open Indo-Pacific through engagement with key partners.

This include AUKUS, the trilateral security partnership&nbsp, established&nbsp, in 2021 with the US and UK in which both countries would build Australia’s nuclear-powered submarine capabilities ( conventionally armed ), including through&nbsp, acquisition&nbsp, of five Virginia-class nuclear-powered submarines from the US over the next three decades for$ 368 billion.

The AUKUS partnership also entails technology and information sharing among the three countries as well as&nbsp, deployment&nbsp, of US and UK submarines as early as 2027 to have rotational presence in Western Australia at HMAS Sterling through Submarine Rotational Force-West, a strategic move not just to help Australia build its nuclear-powered submarine fleet but also&nbsp, counter&nbsp, China’s growing influence in the Indo-Pacific.

As one of the members of the&nbsp, Quadrilateral Security Dialogue&nbsp, (” Quad” ) with the US, Japan and India, Australia’s status as a founding member of PIF ensures that humanitarian assistance, the key reason why the Quad was &nbsp, established&nbsp, in 2004, is delivered to PICs, who remain vulnerable to non-traditional security threats like climate change.

Australia, along with New Zealand, Japan and South Korea also maintains the presence of NATO through&nbsp, Partners in the Indo-Pacific&nbsp, ( IP4 ).

Although NATO was &nbsp, established&nbsp, to counter Soviet threats during the Cold War in Europe after World War II, its partnership with IP4 exists to&nbsp, maintain&nbsp, the international rules-based order in the Indo-Pacific.

There is this&nbsp, notion&nbsp, that” countries in both Europe and the Indo-Pacific count on the US to guarantee their security —a guarantee]that ] they have not had…to question for three-quarters of a century”.

However, China in the Indo-Pacific is already battling that security guarantee from the US. The US and its NATO partners see China’s emerging superpower status and its&nbsp, provocative actions&nbsp, in the South China Sea, particularly with the Philippines, as a threat to the liberal order.

Second, Australia sees the Pacific as a crucially important region for both its national security interests and the security interests of its allies as a US ally and as a NATO partner.

This implies that Australia seeks to prevent China from imposing coercion or attempts to establish bilateral security arrangements with PICs and to ensure that PICs remain under its control in security cooperation.

For instance, the former prime minister of Solomon Islands, Manasseh Sogavare was &nbsp, described&nbsp, as the polarizing, pro-China figure in the Pacific when he&nbsp, signed&nbsp, the security deal with China and PNG was &nbsp, urged&nbsp, early this year by Washington and Canberra to reject China’s bilateral security offer.

When responding to China’s bilateral security offer to PNG, Australia’s Prime Minister Albanese&nbsp, stated:” ]W] e are a security partner of choice for]PNG], as we are for most of the countries in the Pacific”.

PNG did not take up China’s bilateral security offer, intended to help improve PNG’s internal policing, as PNG already has a similar&nbsp, bilateral security arrangement&nbsp, with Australia.

Geoeconomic competition is the most important factor in Australia’s choice for partner of choice in security cooperation for PICs. Both the US and China are &nbsp, key trading partners&nbsp, of Australia, and the Pacific region is critical to their economic development as it houses the&nbsp, trans-Pacific route, the world’s largest shipping lanes linking Asia and North America.

In 2023 alone, approximately 30 million 20-foot equivalent units ( TEU) of cargoes were transported across the trans-Pacific route.

Secondly, while China has done significant investment in infrastructure development through the&nbsp, BRI in the Pacific, Australia through its Pacific Step-up&nbsp, introduced&nbsp, the$ 2 billion Australian Infrastructure Financing Facility for the Pacific to increase its engagement in the region, as the BRI was &nbsp, accused&nbsp, of a “debt-trap” diplomacy.

Australia’s membership in the Partners in the Blue Pacific helps&nbsp, support Pacific priorities&nbsp, envisaged in the&nbsp, 2050 Strategy for the Blue Pacific Continent, as PICs are not included in the US-led&nbsp, Indo-Pacific Economic Framework&nbsp, for Prosperity except Fiji.

PICs are aware of Australia’s traditionally dominant position as a key regional influencer in security cooperation. While China’s interests, apart from economic development, are also to&nbsp, constrain&nbsp, Taiwan’s diplomatic presence in the Pacific, PICs perceive all parties involved, including big powers as its key development partners without any geopolitical interest in security and economic cooperation.

Australia will need to work more closely with the PICs as a traditional leader to maintain its position as the partner of choice in security cooperation while maintaining the sovereignties of each individual PIC.

For instance, the Pacific Policing Initiative ( PPI), just&nbsp, endorsed&nbsp, by PIF leaders in their 53rd&nbsp, meeting in Tonga late last month would be a good start for Australia’s investment in its effort for regional leadership in security cooperation as the PPI will be entirely funded by Australia in the next five years.

Moses Sakai ( sakaimoses@outlook .com ) is a Research Fellow at the Papua New Guinea National Research Institute and a Young Leader of the Pacific Forum. He taught at the University of Papua New Guinea from 2018 to 2023.

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New Sri Lanka president needs to balance campaign promises with debt obligations, say analysts

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He was referring to the Rajapaksa family, which remained in power in Sri Lankan politics until large demonstrations in 2022 over the financial collapse ousted then-president Gotabaya Rajapaksa and prime minister Mahinda Rajapaksa.

Despite the contentious history of his Janatha Vimukthi Peramuna ( JVP ) or People’s Liberation Front, voters sided with Dissanayake. It orchestrated failed rebellion in the 1980s that resulted in tens of thousands of fatalities.

He has since apologised for the group’s violence, but problems remain on what part the JVP might enjoy.

” He has given every sign that he will act politically. But given the political problems that Sri Lanka has faced in recent years, some may be sceptical”, said Kugelman.

AUSTERITY MEASURES VS IMF Problems

Sri Lanka is still suffering from the most severe financial crisis in decades and from the hardships brought on by the International Monetary Fund’s ( IMF) strict bailout.

Millions of people are now struggling to make ends meet thanks to the US$ 2.9 billion deal, which included spending cuts and tax increases.

Dissanayake has stated that he will deal with the bank for a better offer and go against some conditions that the IMF loan has set in order to fulfill his strategy promises of lower taxes and utility bills.

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Sri Lanka’s president sworn in after landslide election win

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Dissanayaka succeeds outgoing leader Ranil Wickremesinghe, who took business at the top of the economic crisis following the president’s first-ever foreign loan default and times of punishing food, fuel and medicine scarcity. Wickremesinghe, 75, imposed rocky tax hikes and other poverty steps per the conditions of an International Monetary FundContinue Reading

Anura Kumara Dissanayake sworn in as Sri Lanka’s president

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Getty Images Sri Lanka's new president Anura Kumara Dissanayake takes oath as president of Sri Lanka in Colombo, Sri Lanka on September 23, 2024. Getty Images

Anura Kumara Dissanayake, Sri Lanka’s new leader, sworn in as president and promises” clean” politics as the nation returns from its worst economic crises.

The left-leaning Dissanayake has portrayed himself as a industry of the status quo, and economists see his success as a rejection of corruption and cronyism that has plagued the nation for a long time.

The vote on Saturday marked the second since 2022, when widespread protests and the removal of former president Gotabaya Rajapaksa from electricity erupted.

” We need to create a new fresh social lifestyle”, he said. ” I commit to achieving this. We will do everything in our power to regain the trust and respect of the electorate.

The 55-year-old, who is familiarly known as AKD, told Sri Lankans that “democracy does n’t end with voting in a leader”.

” We need to develop democracy. I vow to accomplish my utmost to prevent democracy”, he said.

I’ve already stated that I’m a regular person, not a sorcerer. There are things I know and do n’t know. My goal is to collect people who have the knowledge and abilities to improve this nation.

At the conclusion of his discourse, Dissanayake received a Buddhist gift. Representatives of Sri Lanka’s another major religions- Islam, Hinduism and Christianity- were likewise present during the oath-taking, highlighting the fresh president’s emphasis on diversity.

In a speech on the day of the meeting, Dissanayake said the “unity of Sinhalese, Tamils, Muslims and all Sri Lankans is the core of this innovative beginning”.

During the battle, Dissanayake promised citizens good leadership and strong anti-corruption measures.

He has promised to build Sri Lanka’s production, agriculture and IT industries. He has also pledged to carry out the agreement with the International Monetary Fund ( IMF) to help Sri Lanka escape the economic crisis while minimizing the impact of its austerity measures on the nation’s poorest.

Before Dissanayake was sworn in, Sri Lankan Prime Minister Dinesh Gunawardena resigned, thereby facilitating the dissolution of parliament.

Dissanayake indicated in an earlier interview with BBC Sinhala that he would break parliament shortly after winning the election.

There is no point in continuing to have a parliament that does n’t conform to what the people want, he declared at the time.

No applicant was able to secure more than 50 % of the full vote in the first round, so Dissanayake prevailed. The counting slowed down to a second round on Sunday.

After the second and third-choice votes for president had been tallied, the Election Commission said Dissanayake had won with a full of 5, 740, 179 vote.

Sajith Premadasa, the leader of the opposition, placed following with 4, 530, and 902. Ranil Wickremesinghe, the incoming leader, received 2, 299, and 767 during the initial round of calculating, but he was exempt from the following round.

EPA Supporters of newly elected President Anura Kumara Dissanayake cheer near the election commission after the announcement of his victory in the presidential election, in Colombo, Sri Lanka, 22 September 2024.EPA

Wickremesinghe congratulated his son, saying:” With many love and respect for this beloved country, I give over its coming to the new leader”.

Until this week’s voting, all of Sri Lanka’s eight national elections since 1982 had seen the success emerge during the first round of calculating. This ballot has been described as one of the closest in the country’s history.

The anti-corruption program of Dissanayake’s anti-corruption system was well received by voters who have clamoured for sweeping reform since the crisis.

This gave him a chance to get over his political party’s violent past, the Marxist Janatha Vimukthi Peramuna ( JVP), which carried out two armed uprisings against the Sri Lankan state in the 1970s and 1980s.

Dissanayake’s ally, the National People’s Power – of which the JVP is a part – rose to prominence during the 2022 demonstrations, known as the Aragalaya – Sinhala for battle.

In addition, Dissanayake has attempted to lower the party’s hard-left stance in recent years.

Economic panic

The new president of the nation will have to rescue millions from devastating hunger and revive the economy simultaneously.

The Aragalaya revolt that removed Rajapaksa from the national palace in 2022 was fueled by an financial panic.

Sri Lanka’s foreign currency reserves at the time were exhausted, making it unable to buy essential goods like gas. Public debt reached$ 83 billion, and inflation reached a record high of 70 %.

This made basic necessities like food and healthcare costly for the average person.

The country’s financial sorrow has been blamed on key policy issues, weak exports and decades of under-taxation. This was exacerbated by the Covid-19 crisis, which choked tourism, a vital financial vehicle.

Many individuals have also blamed corruption and incompetence, but, stoking fury against Rajapaksa and his family, who collectively ruled Sri Lanka for more than 10 years.

EPA Hand cart pullers work at a wholesale market in the commercial hub of Colombo, Sri Lanka, 13 September 2024. EPA

” The most significant concern is how to restore this economy”, Dr Athulasiri Samarakoon, a social scientist at the Open University of Sri Lanka, told the BBC Sinhala Service.

During his term Wickremesinghe secured a $2.9bn lifeline from the International Monetary Fund (IMF), which is crucial to opening additional funding channels but comes with strict economic and governance policy reforms.

According to the IMF’s instructions, Sri Lanka is changing the terms of its loan obligations to domestic and international creditors. The main focus has been the country’s$ 36bn worth of foreign debt, of which$ 7bn is owed to China, its largest bilateral creditor.

Like Dissanayake, Premadasa even pushed for IT growth, as well as the creation of 25 new business districts. He claimed that tourism should be promoted to make it the best foreign currency worker in the nation.

Wickremesinghe promised to increase tourist arrivals, create a national wealth fund, and create new economic zones to promote economic growth during the campaign.

More monitoring by BBC Sinhala

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Anura Kumara Dissanayake: Who is Sri Lanka’s new president?

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Getty Images Anura Kumara Dissanayake speaks into an array of microphonesGetty Images

After winning the first vote in the debt-ridden nation since its economy collapsed in 2022, left-leaning legislator Anura Kumara Dissanayake was elected as Sri Lanka’s next leader.

The 55-year-old beat off his nearest rival, opposition leader Sajith Premadasa, to emerge as the clear winner after a historic second round of counting, which included second-preference votes. Outgoing president Ranil Wikremesinghe trailed in third.

It’s a remarkable turn for a person who won only 3 % of the vote in the 2019 vote. Dissanayake, who contested as candidate for the National People’s Power ( NPP ) alliance, has drawn increasing support in recent years for his anti-corruption platform and pro-poor policies – particularly in the wake of the country’s worst ever economic crisis, which is still having an impact on millions.

He will now be in charge of a struggling country that is trying to get out of the ghost of that issue and whose people are desperate for change.

So who is president-elect Anura Kumara Dissanayake?

A former Socialist

Dissanayake was born on 24 November, 1968 in Galewela, a multi-cultural and multi-religious area in central Sri Lanka.

Raised as a member of the middle-class, he is open college educated, has a degree in physics, and second entered politics as a learner around the day when the Indo-Sri Lanka Agreement was signed in 1987: an occasion that may lead to one of Sri Lanka’s bloodiest times.

An armed revolt against the Sri Lankan government was spearheaded by the Janatha Vimukti Peramuna ( JVP), a Marxist political party with which Dissanayake would later become intimately associated, between 1987 and 1989.

A fight characterized by attacks, assassinations, and attacks on both political opponents and civilians that claimed thousands of lives was the result of the insurrectionist campaign, which was spurred by children from the remote lower and middle classes.

Dissanayake, who was elected to the JVP’s key committee in 1997 and became its head in 2008, has since apologised for the team’s murder during this so-called” winter of terror”.

In a 2014 interview with the BBC, he stated that” a lot of things happened during the armed conflict that should n’t have happened.”

” We are still shocked, and shocked that things happened at our hands that should n’t have. We are constantly profoundly shocked and saddened by that.

The JVP, which now has only three seats in parliament, is part of the NPP alliance that Dissanayake then heads.

Getty Images A large crowd of people sitting in an outdoor locationGetty Images

A’ distinct’ leader

While fighting for the national election, Dissanayake addressed another harsh moment in Sri Lanka’s new story: the 2019 Easter Sunday attacks.

At least 290 people were killed and hundreds of others were hurt in what quickly turned out to be the worst attack in Sri Lanka’s record on April 21, 2019, when a series of dangerous storms tore through churches and international resorts across the investment Colombo.

Five years later, but, investigations into how the co-ordinated problems happened, and the security problems that led to them, have failed to deliver answers.

Some have accused the previous government, led by Gotabaya Rajapaksa, of affecting studies.

Dissanayake promised to conduct an investigation into the matter if elected, suggesting that officials had avoided doing so because they feared revealing” their personal duty” in a recent discussion with BBC Sinhala.

It’s just one of several unfulfilled claims from Sri Lanka’s political aristocracy, he added.

” It’s not just this analysis”, he said. Politicians who said they would cease corruption have actually engaged in it, while those who said they would make a debt-free Sri Lanka have just increased the burden have just increased. Those who said they would strengthen the law have also done so.

This is precisely why the people of this nation demand a unique style of government. We are the ones who may offer it.

A prospect for transform

In the run-up to Saturday’s election, Dissanayake was seen as a strong prospect who could alter the country’s lingering feelings.

In 2022, a large number of demonstrations sparked by the financial collapse led to the ex-president Gotabaya Rajapaksa being forced out of Sri Lanka.

Decades of under-taxation, poor exports and big policy problems, combined with the Covid-19 crisis, dried up the government’s foreign exchange reserves. Public debt exceeded$ 83 billion, and prices shot up to a 70 % rate.

Getty Images A woman sits next to a pile of liquefied petroleum gas canistersGetty Images

The issue was brought on by Rajapaksa and his administration. And though his leader, President Wickremesinghe, introduced economic changes that brought down prices and strengthened the Sri Lankan dollar, people continue to feel the squeeze.

In a deeper sense, a new kind of political leadership was needed in the wake of the 2022 financial crisis and the circumstances surrounding it, including widespread corruption and political impunity. Dissanayake has made the most of that requirement.

He has portrayed himself as a possible industry of a standing status that, according to reviewers, has long fostered corruption and cronyism among the social elite.

In a recent interview with BBC Sinhala, Dissanayake suggested that he would dissolve parliament within weeks of being elected in order to have a clean slate and a new mission for his plans.

There is no point in continuing to have a parliament that does n’t conform to the people’s demands, he said.

An activist for the underprivileged

Among Dissanayake’s plan pledges are strong anti-corruption steps, bigger welfare schemes and a guarantee to slash fees.

As part of austerity measures intended to reshape the nation’s economy, the current government imposed tax increases and security cuts, which likewise left many people able to make ends meet.

In an election where experts predicted economic concerns may be top of mind, Dissanayake’s promises to rein in those actions appears to have sparked a wave of support among voters.

” The region’s soaring prices, skyrocketing cost-of-living and hardship have left the public eager for solutions to stabilise prices and increase livelihoods,” Soumya Bhowmick, an associate brother at India-based think container the Observer Research Foundation, told the BBC before the vote.

This vote is critical for shaping Sri Lanka’s recuperation path and restoring both domestic and international trust in its management as the nation struggles to recover from its economic collapse.

Getty Images Anura Kumara Dissanayake smiling and wavingGetty Images

Some bystanders, including traders and market members, expressed concern that Dissanayake’s monetary policies could have an effect on fiscal goals and destroy Sri Lanka’s road to recovery.

But, the presidential candidate moderated his speech choices and vowed to make sure Sri Lanka’s debt was paid back.

He added that any modifications may be made in consultation with the IMF, which has served as a support for the nation’s still-fragile business.

Some analysts think the second president’s primary task is building a steady economy.

The most important issue is how to restore this economy, including managing public consumption and increasing public income generation, according to Athulasiri Samarakoon, senior lecturer in social science and international studies at the Open University of Sri Lanka.

Any future governments will need to collaborate with the International Monetary Fund, he declared.

An “impressive win.”

About 76 % of Sri Lanka’s 17.1 million electorate turned out to vote in Saturday’s election, according to officials.

By Sunday morning, Dissanayake’s two main rivals, incumbent president Ranil Wickremesinghe and opposition leader Sajith Premadasa, had already received congratulations messages from them.

Early results clearly indicated a Dissanayake victory, according to Foreign Minister Ali Sabry, according to Sabry on X.

” Though I heavily campaigned for President Ranil Wickremesinghe, the people of Sri Lanka have made their decision, and I fully respect their mandate for Anura Kumara Dissanayake,” Sabry said.

MP Harsha de Silva, who supported Premadasa, said he had called Dissanayake to offer his congratulations.

We worked hard for @sajithpremadasa, but it turned out not to be. It is now clear @anuradisanayake will be the new President of# SriLanka,” said de Silva, who represents Colombo in parliament.

Another Premadasa supporter, Tamil National Alliance ( TNA ) spokesman MA Sumanthiran, said Dissanayake delivered an” impressive win “without relying on” racial or religious chauvinism”.

Additional reporting from BBC Sinhala

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Anura Kumara Dissanayake: Left-leaning leader wins Sri Lanka election

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EPA Anura Kumara Dissanayake, presidential candidate and leader of the opposition party National People's Power (NPP), shows his ink-marked finger after casting his vote during the presidential election, in Colombo, Sri Lanka, 21 September 2024.EPA

After a traditional second round of counting, left-leaning politician Anura Kumara Dissanayake has won Sri Lanka’s national poll.

No candidate won more than 50 % of the total votes in the first round, where Dissanayake got 42.31 % while his closest rival, opposition leader Sajith Premadasa, got 32.76 %.

But Dissanayake, who promised citizens good governance and strong anti-corruption steps, emerged as success after the second matter, which tallied electors ‘ second and third choice candidates.

The election on Saturday was the first to be held since mass protests unseated the country’s leader, Gotabaya Rajapaksa, in 2022 after Sri Lanka suffered its worst economic crisis.

Getty Images Election officers carry a sealed ballot box to a counting center during the presidential election in Colombo, Sri Lanka, on Saturday, Sept 21, 2024. Getty Images

To revitalize the business, Dissanayake, 55, has promised to build the manufacturing, crops and IT industries. He has also pledged to carry out the IMF’s bailout agreement while limiting the effects of Sri Lanka’s austerity measures on the poorest of the nation.

Until this week’s voting, all of Sri Lanka’s eight national elections since 1982 have seen the success emerge during the first round of calculating. This surveys has been described as one of the closest in the country’s history.

The Sri Lankan elections commission described the election as the most relaxing in the country’s past, with 17 million people eligible to vote on Saturday.

However, police announced a curfew later Saturday evening citing “public security. It was lifted at noon local time ( 06: 30 GMT ).

Dissanayake’s message to voters, who had long been calling for systemic change, was strong anti-corruption measures and good governance. It was powerful in the eyes of the electorate.

In the 1970s and 1980s, his political party, the Marxist Janatha Vimukthi Peramuna ( JVP), which carried out two armed uprisings against the Sri Lankan state, was in control of his situation.

His ally, the National People’s Party – of which the JVP is a piece – rose to prominence during the 2022 demonstrations, known as the aragalaya – Sinhala for battle.

In recent years, he has even attempted to lower his party’s hard-left position.

Early findings showed him taking the lead, which prompted many well-known figures, including the nation’s foreign minister, to applaud him.

However, as voting continued, he lost some earth to Premadasa, which necessitated the next round of counting.

Ranil Wickremesinghe, the former president, received 17 % of the vote, putting him in fourth place in the polls. He was eliminated from the minute matter, which was only between the two finalists.

Economic panic

The new president of the nation will have to rescue millions from devastating hunger and revive the economy simultaneously.

The” Aragalaya” ( struggle ) uprising that removed Rajapaksa from the presidential palace in 2022 was fueled by an economic meltdown.

Sri Lanka’s foreign currency reserves at the time were running out, making it unable to import essentials like gasoline. Public debt increased to$ 83 billion while inflation increased to 70 %.

Basic items like food and healthcare could not be afforded by regular people because of this.

The country’s financial sorrow has been blamed on key policy mistakes, weak exports and decades of under-taxation. This was exacerbated by the Covid-19 crisis, which choked tourism, a vital financial vehicle.

However, some people even attribute corruption and mismanagement to Rajapaksa and his family, who have ruled Sri Lanka for more than ten years.

EPA Vendors wait for customers at a grocery shop in Colombo, Sri Lanka, 13 September 2024.EPA

” The most critical issue is how to restore this business,” said Dr Athulasiri Samarakoon, a social scientist at the Open University of Sri Lanka, told the BBC Sinhala Service.

During his term, Wickremesinghe had secured a $2.9bn lifeline from the International Monetary Fund (IMF), which is crucial to opening additional funding channels, but comes with strict economic and governance policy reforms.

Sri Lanka is changing the terms of its debts obligations to domestic and international creditors in accordance with the IMF’s recommendations. The main focus has been the country’s$ 36bn in foreign debt, of which$ 7bn is owed to China, its largest bilateral creditor.

Like Dissanayake, Premadasa has even pushed for IT as well as the creation of 25 innovative business areas. He argued that commerce should be promoted to become the nation’s leading foreign currency producer.

During the campaign, Wickremesinghe promised to increase tourist arrivals, create a national prosperity fund, as well as create new economic zones to promote growth.

More reporting by BBC Sinhala

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