Sri Lanka Cabinet Reshuffle in the aftermath of One Belt One Road

Sri Lankan President, Maithripala Sirisena, in a much awaited cabinet reshuffle announced on Monday, May 22, switched the finance and foreign ministers in a bid to restore confidence in the administration’s handling of the economy. Managala Samaraweera, who has been foreign minister since January 2015, was appointed as finance and media minister. Ravi Karunanayake, takes over as external affairs minister.

While the reshuffle has been pending for several months, there are many reasons as to why they might have emerged at this juncture rather than earlier. The reshuffle also represents a power struggle in the precarious coalition between the Sri Lanka Freedom Party and the United National Party.

One of the core issues that have played out in the reshuffle is the power equation between Sirisena and Wickramasinghe, both getting small victories. This reshuffle also seeks to balance Sri Lanka’s relationship with both India and China.

After the visit of the Indian Prime Minister Narendra Modi’s to the island nation, where he delivered a speech urging India and Sri Lanka to move closer in matters of security, it is alleged that the Indian PM talked to his Sri Lankan counter-part urging him to undertake the reshuffle. Indian involvement in the politics of Sri Lanka has come under serious flak in recent times, as former President Mahinda Rajapaksa has accused New Delhi’s involvement in the 2015 elections, to curb the growing influence of China. However, with this cabinet reshuffle the attempts of India to prevent China’s entry into Sri Lanka might have come to naught.

The reshuffle also represents a power struggle in the precarious coalition between the Sri Lanka Freedom Party and the United National Party.

 

The reshuffle was withheld till Sri Lanka Prime Minister Ranil Wickramasinghe returned from his visit to China for the One-Belt-One-Road summit held in Beijing. During the summit, an investment of 24 billion dollars was promised as part of China’s ambitious project. One of the direct outcomes of this was that erstwhile cricketer-turned-politician Arjuna Ranatunga was stripped of the ports portfolio after he blocked a 1.1 billion dollars Chinese port deal following criticism that it would draw the tiny nation deeper into debt.

The delay in the reshuffling, according to the local press, was also due to the differing opinions between Sirisena would face opposition from Wickramasinghe. One such contention was the pro-reconciliation voice adopted by the Samaraweera, the former External Affairs minister, this according to local newspapers, has ‘irked’ Sirisena who has been wary of bringing international NGOs and humanitarian agencies in the country.

While, the dominant narrative adopted by the government was to bring about much needed change, and improve their image. Growth, has remained anaemic, falling 4.4 per cent in 2016 from 4.8 per cent in the previous year. The exchange rate was allowed to depreciate 14 per cent in the two years through December 2016 and further 1.9 pct so far this year to boost exports. The change at cabinet is aimed at giving fresh impetus to development work, the spokesman quoted the president as saying.

Growth, has remained anaemic, falling 4.4 per cent in 2016 from 4.8 per cent in the previous year. The exchange rate was allowed to depreciate 14 per cent in the two years through December 2016 and further 1.9 pct so far this year to boost exports.

 

Additional pressure was exerted from the IMF, who had given Sri Lanka a loan of 1.5 billion dollars to help modernize the economy, but the move has been slow. The change in ministers will help fulfill the agenda set by the international organization which include through modernisation and simplification of its fiscal system and boost tax revenue which the government has been struggling to implement because of political opposition.