The Economist Intelligence Unit
Sri Lanka is set to undergo another period of political turmoil as the country faces a constitutional crisis. The growing tensions and ideological differences within the ruling coalition between the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP) came to the fore on October 26th, when the president, Maithripala Sirisena (who is also the leader of the SLFP), announced the sacking of the prime minister, Ranil Wickremesinghe of the UNP.
He also announced the appointment of the former president and leader of the opposition Sri Lanka Podujana Peramuna (SLPP), Mahinda Rajapaksa, as the new prime minister.
Mr Wickremesinghe has dismissed the president’s move as unconstitutional and insisted that he is still the prime minister as he commands a parliamentary majority. The UNP officially holds 106 seats in the 225-seat parliament, only seven short of a simple majority, against a combined tally of 95 seats for the SLFP and the SLPP.
However, a day after the October 26th announcement, Mr Sirisena suspended parliament until November 16th, denying Mr Wickremesinghe the chance to prove that he still commands a majority.
The Economist Intelligence Unit believes that Mr Sirisena’s move to dissolve parliament is unconstitutional, as the president does not have the power to do so until four and a half years of its term have passed unless the move is supported by a two-thirds majority in the legislature.
The way in which the president announced Mr Rajapaksa’s appointment and dissolved parliament suggests that the SLFP and SLPP have not yet been able to garner the support of the additional parliamentarians required for a majority.
If they had, it would have been in their interest to take a less inflammatory parliamentary route to power, introducing a motion of no confidence against the government and then forming a new administration.
Nonetheless, there is a strong chance that enough UNP legislators will cross over to the Sirisena-Rajapaksa camp in the next few days, allowing them to form a majority, owing to the fading popularity of the UNP and the strong support that Mr Rajapaksa currently enjoys among the electorate.
This was demonstrated by the results of the local elections held in February, in which the SLPP secured an overwhelming victory against the previous ruling SLFP-UNP coalition.
The suspension of parliament will further help the Sirisena-Rajapaksa camp to consolidate support for a new government. Indeed, Mr Sirisena has announced that a new cabinet will be sworn in on Monday, which suggests that the camp may have already promised important portfolios and ministerial positions to UNP legislators, in order to incentivise them to change allegiance and join the new government.
We expect the announcement of the new cabinet to go through as planned and that Mr Rajapaksa’s government will have a majority when parliament reconvenes in November.
China moves to welcome Mr Rajapaksa back
China was one of the first countries to approve of the change in government in Sri Lanka, with the Chinese president, Xi Jinping, congratulating Mr Rajapaksa on his appointment as prime minister. The two countries developed strong ties during Mr Rajapaksa’s presidency in 2005‑15.
Nonetheless, Mr Rajapaksa and the SLPP have not been averse to using anti-Chinese sentiment for populist gain during their time in the opposition. India has adopted a more cautious approach, and its Ministry of External Affairs has urged Sri Lanka to act constitutionally. Both China and India have a keen interest in Sri Lankan politics given the country’s strategic position for influence in the Indian Ocean region.
Expect the security situation to worsen
The descent into political chaos within the coalition and parliament has been accompanied by unrest on the streets as factions allied with the UNP and the SLFP-SLPP seek to bolster support for their camp’s position. Shortly after the October 26th announcement, Mr Rajapaksa’s supporters took over the offices of state-owned newspapers and media channels and moved to prevent government ministers from reaching their offices.
The security situation took a turn for the worse on October 28th, when security personnel associated with a cabinet minister, Arjuna Ranatunga, open fired on a crowd that was preventing him from entering his office, causing at least one fatality.
We expect social unrest and outbreaks of violence to continue over the next few days, damaging political stability. In an attempt to contain the unrest, it is likely that the president may again impose curfews and declare a state of emergency. Both tools were used in March 2018 when ethnic tensions broke out between the Sinhalese and Muslim communities in the Kandy district, in Central province.
SLPP-SLFP camp likely to emerge triumphant from the crisis
In the light of recent events, we will be changing our political forecasts. Despite a likely period of political instability, during which the legality of recent moves will be challenged, we expect that the SLFP and the SLPP will eventually succeed in gaining parliamentary approval for their new administration in mid-November. The new government would then hold office until 2020, when the next parliamentary elections are due.
The two parties are likely to join forces to contest the 2020 ballot, partly because we do not expect that the SLPP will be able to put together a government on its own without the SLFP. Indeed, the SLPP was formed in 2016 by disenchanted members of the SLFP who were loyal to Mr Rajapaksa, and consequently there is a strong possibility that the two parties will merge again in order to project the image of a solid party in the mind of the electorate.
Although the political situation will stabilise somewhat in the coming months once the new coalition wins parliamentary approval, recent developments will do little to reassure those concerned about Sri Lanka’s tendency towards political instability. Foreign investors are likely to become more wary, both of investing in the country directly and about buying its bonds.
The domestic business community is also likely to be unsettled, dampening investment. Mr Sirisena may have secured his party’s grip on power, but by using such unorthodox methods he has undermined his country’s long-term development prospects.