Sri Lanka has chosen a new leader. After years of political and economic crises, notably the storming of the former president’s residence in 2022, Anura Kumara Dissanayake is now tasked with driving the country towards a much longed for stability.
Dissayanake is the leader of the National People’s Power (NPP) alliance and a self-proclaimed Marxist, although he has now said he is in support of free markets.
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Aside from reviving the country’s downtrodden economy which faced a historic economic crisis in 2022, Dissayanake must also walk the tightrope that is balancing the country’s relationship with India and China.
Sri Lanka recently restructured its debt which, according to Foreign Minister Ali Sabry, will give it the opportunity to promote foreign funded development projects.
India and China are the leading providers of FDI to Sri Lanka which puts the island in the middle of a complicated geopolitical situation. Both countries are interested in expanding their spheres of influence in the region.
The relationship between India and China has been fraught since a fatal border clash in 2020.
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By GlobalDataCaught in the middle
Sri Lanka has close cultural and business ties to India. India is important for the island’s tourism industry, port development and renewable energy sectors. The countries even plan on connecting their power grids eventually, according to Sabry.
In the last ten years, China has invested about $3b in Sri Lanka. Dissayanake’s party has traditionally leaned towards China in the past. After the leader won the elections, Beijing said it was ready to work with his government to boost development through the Belt and Road Initiative.
China’s seizing of a Sri Lankan port after it couldn’t pay back its loans has become the prime example for critics who accuse the program of being a debt trap for poorer countries.
There have also been instances of Chinese vessels arriving in Sri Lanka which have fueled espionage fears from India, leaving the island stuck in the middle.
Change in the region
Sri Lanka is the latest country in the region to go through a major power transition in the past few months. Bangladesh recently ousted its authoritarian leader Sheikh Hasina and is now being led by interim leader Muhammad Yunus. The shift also put into question Bangladesh’s relationship with India, given that Hasina fled to New Dehli.
The change sparked fears that China would seize the opportunity to gain more influence in the region.
