Sri Lanka’s new leader should listen to his critics

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Sri Lanka’s new president, Ranil Wickremesinghe, will need all the help he can get to avoid economic collapse. He should strive to convince his many detractors, not repress them.

The scale of the crisis at which Wickremesinghe, a six-time former prime minister, is daunting. Sri Lanka is indeed broke. A series of misguided economic policies – many of which were implemented under the presidencies of brothers Mahinda and Gotabaya Rajapaksa – have left the country with unsustainable debt and almost no means of payment: it has $7 billion in debt due this year and barely 2 billion dollars in foreign currency. reservations.

Imports of fuel and other essential goods have been severely restricted. Inflation is approaching 60%; food prices alone have increased by 80%. Economic activity has come to a standstill and most Sri Lankans are cutting back on their meals.

Months of protests finally ousted Gotabaya Rajapaksa from power in mid-July. Protesters accused the former president, who filled his cabinet with family members and cronies, of corruption and incompetence. Many are also wary of Wickremesinghe, who has allegedly shielded the Rajapaksa family from legal scrutiny in the past. The new president did not help his advocacy for independence by immediately ordering the army to forcibly clear the main protest site, then appointing a cabinet largely made up of politicians from the still ruling party. loyal to the Rajapaksas. This week, Human Rights Watch accused security forces of using emergency rules to harass and arbitrarily detain activists, lawyers, and journalists.

Seeking to crush the opposition would be a profoundly myopic strategy. The International Monetary Fund, which is finalizing the details of a desperately needed bailout with Sri Lanka, wants to see political stability and a government capable of delivering on its promises. These promises will have to include painful budget cuts, tax hikes, the removal of subsidies and the privatization of public enterprises. Even if Wickremesinghe is able to temporarily quell the protests, it is almost certain that they will reinvigorate once these reforms start to bite.

It is much better to prepare Sri Lankans for the sacrifices that will be necessary to get out of this crisis. Several members of the opposition have, like the new president, long favored more liberal economic policies; Wickremesinghe should seek their input and involve them in designing the necessary reforms. The government also needs to be more transparent about talks with the IMF, which have been conducted largely out of public view.

More importantly, the new president must respond to protesters’ legitimate demands for political reform. He promised to remove at least some of the sweeping powers that Gotabaya Rajapaksa had assumed through a constitutional amendment and restore more authority to parliament. He should honor this commitment quickly, before the temptations of the office weaken his resolve. It should also show it is serious about fighting corruption by backing an independent anti-corruption commission, police units to investigate financial crimes and international efforts to recover stolen assets.

Sri Lanka’s friends, including the United States, the European Union and India, have already worked with Wickremesinghe and should not hesitate to use their influence with the new government. While they should provide more immediate relief to ease the suffering of ordinary Sri Lankans, they should also coordinate with the IMF to ensure that any long-term bailout is conditional on serious political and economic reform. There is no point in ignoring this crisis to hasten the next one.

More other writers at Bloomberg Opinion:

• In Sri Lanka, what comes after people power? : Ruth Pollard

• Sri Lanka shows the madness of fringe economic theories: Mihir Sharma

• The Great Chinese White Elephant of Sri Lanka: Andy Mukherjee

The editors are members of the Bloomberg Opinion Editorial Board.

More stories like this are available at bloomberg.com/opinion

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