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Leftist Sri Lanka leader stuck with painful IMF deal: analysts
by Amal JAYASINGHE
Colombo (Sri Lanka)– 25 September 2024 12:30 – AFP: Sri Lanka’s new leftist leader has little room to renegotiate an IMF bailout that threw a lifeline to his bankrupt country but imposed punishing and unpopular austerity measures, analysts say.
Anura Kumara Dissanayake, 55, was a vocal critic of global lenders from the fringes of the island nation’s politics, including in the aftermath of Sri Lanka’s unprecedented economic meltdown two years ago.
He won Saturday’s presidential vote in a landslide promising to reverse steep tax hikes, raise public servant salaries and renegotiate the International Monetary Fund rescue package secured by his predecessor.
But after his inauguration two days later he appealed for international support to revive Sri Lanka’s economy, admitting he had no magic solution to its woes.
“There are certain red lines that the IMF will not agree to negotiate,” Murtaza Jafferjee of the Colombo-based economic think tank Advocata told AFP.
He said the Washington-based lender of last resort would be very unlikely to budge on core components of its $2.9 billion bailout, including a ban on printing money and revenue and spending targets agreed by the last administration.
Dissanayake’s party, the People’s Liberation Front (JVP), sports the hammer and sickle motif of the international communist movement on its logo.
The JVP was confined to the political wilderness for decades after leading rebellions in the 1970s and 1980s that left more than 80,000 people dead, before the party renounced violence.
Months of food, fuel and medicine shortages that accompanied the 2022 financial crisis and foreign debt default rallied the public behind it.
Dissanayake’s call to upend the island’s “corrupt” politics resonated with a public infuriated by chronic economic mismanagement and graft scandals in government ranks.
As the size of his victory became clear, his party moved quickly to assure markets and creditors that it would adhere to the broad strokes of the bailout deal.
“We will not tear up the IMF programme,” JVP politburo member Bimal Ratnayake said. “It is a binding document, but there is a provision to renegotiate.”
The ironic outcome of the pledge was that the same day as an avowed Marxist assumed the presidency, Colombo’s stock exchange rallied by 1.5 percent.
But by committing to maintain the rescue plan, Jafferjee said that any tweaks pushed by Dissanayake would necessarily be minor.
“On the fiscal side, there is not much adjustment that can be done,” he said.
Dissanayake’s predecessor, Ranil Wickremesinghe, was voted out of office after doubling income taxes and imposing other reviled austerity measures.
His policies ended the shortages as well as runaway inflation and returned the country to growth but left millions struggling to make ends meet.
The IMF said Wickremesinghe’s administration had made a great deal of progress in repairing the nation’s ruined finances after a $46 billion foreign debt default two years ago.

Analysts say the IMF would be very unlikely to budge on core components of its $2.9 billion bailout. Idrees MOHAMMED / AFP
But spokesperson Julie Kozack also warned ahead of the presidential poll that Sri Lanka was “not out of the woods yet”.
One of Dissanayake’s first acts of business will be to secure a parliamentary endorsement for a debt restructuring deal with international bondholders, negotiated by his predecessor at the eleventh hour and announced last week.
That will have to wait for the election of a new parliament, as Dissanayake sought to capitalise on his landslide win by calling snap polls on Tuesday, the day after he was sworn in.
Umesh Moramudali, an economics lecturer at the University of Colombo, warned that failing to secure the deal’s passage could open Sri Lanka to legal action from its creditors.
“It would be in the best interest of the country to avoid litigation with bondholders,” he told AFP.
Sri Lanka also owes billions to China and India, its two largest bilateral creditors who are both competing for influence in the island nation, which is strategically situated on global east-west sea routes.
Both nations have congratulated Dissanayake on his win and pledged to work with his administration.
Dissanayake’s ideological leanings, his campaign against an India-backed energy project and the JVP’s historical anti-India stance had led some experts to suspect his administration would lead Sri Lanka to a closer relationship with Beijing.
But he used his inauguration speech to reject “power divisions in the world” and pledged to work with all other countries for the benefit of his own.
“The new leader’s foreign policy stance will be important,” said Farwa Aamer of the Asia Society Policy Institute.
“It will be in his interest to work with India, as a regional partner, as he focuses on economic development.”
News
Construction and Concrete waste recycling centre opened in Ekala under the Clean Sri Lanka programme
A recycling centre for the management of construction and demolition (C&D) waste, established in line with the Clean Sri Lanka national programme, was declared open this morning (08) at the Ekala Industrial Zone.
The Clean Sri Lanka Secretariat has allocated Rs. 200 million for this project. Established within the precast yard premises belonging to the State Engineering Corporation under the Ministry of Housing, Construction and Water Supply, the project marks a significant step towards a sustainable environmental transformation in Sri Lanka’s construction sector.
Globally, the construction industry accounts for 40% of total waste generation and 25% of carbon emissions. In Sri Lanka, nearly 300 tonnes of such waste are collected daily from the Western Province alone.
Until now, the indiscriminate disposal of such debris has contributed to soil pollution, water contamination and increased flood risks. Under this project, however, such waste will be transformed into valuable raw materials through modern technology. This initiative is expected to minimise the depletion of natural resources while significantly reducing construction costs.
The centre, which is being operated with the full involvement of the State Engineering Corporation, has been provided with machinery and land valued at Rs. 350 million. In addition to the recycling plant, which has a capacity of 200 metric tonnes per hour, a modern laboratory and an administrative building have also been constructed. Under the “Clean Sri Lanka” programme, Rs. 200 million has been allocated for the project, of which Rs. 150 million has already been released.
There are also plans to expand research activities in the future by engaging engineering faculties of State universities in the programme. The support and contribution of all construction contractors and stakeholders are expected in building a circular economy within the construction sector while safeguarding natural resources for future generations.
Minister of Housing, Construction and Water Supply Dr Susil Ranasinghe, Deputy Minister of Environment Anton Jayakody, Deputy Minister of Housing, Construction and Water Supply T.B. Sarath, Deputy Minister of Labour Mahinda Jayasinghe, Member of Parliament Najith Indika, Additional Secretary to the President at the Clean Sri Lanka Secretariat S.P.C. Sugeeshwara, Additional Director General of the Clean Sri Lanka Secretariat Kapila Senarath, Director (Environmental) of the Clean Sri Lanka Secretariat Anjula Premarathna, Chairman of the State Engineering Corporation Engineer Neranjan Fernando and Deputy General Manager of the State Engineering Corporation Charuka Hettiarachchi, along with several others, were present at the occasion.
News
President of the Socialist Republic of Vietnam pays floral tribute to the Ho Chi Minh Statue
President of the Socialist Republic of Vietnam and General Secretary of the Central Committee of the Communist Party of Vietnam, To Lam, who is on a State visit to Sri Lanka at the invitation of President Anura Kumara Dissanayake, paid floral tribute this morning (08) to the statue of Ho Chi Minh situated within the premises of the Colombo Public Library.
Upon arriving at the Colombo Public Library, President To Lam was warmly received by President Anura Kumara Dissanayake, while a group of children holding the national flags of both countries stood along the route to welcome the Vietnamese President.
Following the floral tribute to the Ho Chi Minh statue, President To Lam also viewed a collection of paintings created by schoolchildren.
Thereafter, the Vietnamese President attended the ceremony marking the commencement of the expansion of the “Vietnam–Ho Chi Minh Space” located at the Colombo Public Library, where he also viewed a collection of historical photographs on display.
On the occasion, Chief Librarian of the Public Library, Mrs Varuni Gangabadarachchi, briefed those present on the architectural plans prepared for the renovation and expansion project of the Ho Chi Minh Space. A donation of US$50,000 for the project was also presented to the Mayor of Colombo, Mrs Vraie Cally Balthazaar, by Nguyen Huu Nghia, Member of the Central Committee of the Communist Party of Vietnam and Auditor General of the State Audit Office of Vietnam.
Minister of Environment, Dr Dhammika Patabendi, Mayor of Colombo Mrs Vraie Cally Balthazaar, Deputy Mayor Hemantha Werakoon and several others were also present at the occasion.
[PMD]
News
Urgent reforms needed to eradicate drug menace, says President
President Anura Kumara Dissanayake has instructed officials to swiftly introduce all necessary reforms, including amendments to existing laws, in order to eliminate the drug menace from the country.
The President issued these instructions while attending the meeting of the “Ratama Ekata” National Steering Council convened on Thursday (07) morning at the Presidential Secretariat to discuss efforts aimed at eradicating the drug menace.
He also directed the relevant authorities to take all necessary steps to expedite the process of destroying seized narcotics as quickly as possible under proper legal procedures, thereby preventing them from re-entering society and to accelerate the process of punishing offenders.
The President emphasised the need to speed up this process in order to build public confidence, as well as the confidence of the teams engaged in operations, noting that the successful implementation of the “Ratama Ekata” national initiative would thereby be strengthened through collective participation.
The progress of anti-narcotics operations carried out under the “Ratama Ekata” national initiative, including raids and arrests, was extensively reviewed at the meeting. Officials pointed out that raids related to narcotics had increased by 80% since the launch of the programme.
Since the launch of the “Ratama Ekata” national operation on 30 October 2025, authorities have seized 5,437.457 kilogrammes of cannabis, 1,936.325 kilogrammes of heroin, 1,991.414 kilogrammes of crystal methamphetamine (“ice”), 271.724 kilogrammes of cocaine, 1,574,895 narcotic pills, and 629,988 illicit cigarettes. A total of 168,460 suspects have also been arrested in connection with these offences.
The current progress of the legal amendments required to eradicate the narcotics menace from the country was reviewed at the meeting, and it was noted that steps had been taken to submit the Rehabilitation (Amendment) Bill No. 54 of 2007 to the Cabinet in due course. Discussions were also held regarding the rehabilitation process, the strategies that could be adopted in that regard, and the measures taken to develop related facilities.
It was further revealed that, at Divisional Secretariat level, 25 families most severely affected by narcotics in each division had been selected for attitude development programmes. The President stressed the importance of implementing all such programmes through local religious centres.
The President also made clear that anti-drug awareness programmes should not merely be limited to conducting awareness campaigns, but should include continuous follow-up to assess whether the message had been properly communicated to society and to monitor progress. He highlighted the importance of maintaining this mechanism continuously with the involvement of religious leaders, including members of the Maha Sangha in the respective areas.
The President also inquired into measures being taken to establish a separate court for narcotics-related cases, expedite the receipt of Government Analyst reports, and accelerate the filing of cases.
He also stressed the urgent need for a rapid programme to expedite legal proceedings and rehabilitation processes concerning inmates imprisoned for narcotics-related offences, in order to ease prison overcrowding.
The Inspector General of Police also briefed the meeting on investigations and the current status relating to Buddhist monks who were recently arrested in connection with narcotics offences.
The President was further briefed on the progress of programmes jointly implemented by the Ministry of Education and the Women and Children’s Bureau to curb organised efforts to draw schoolchildren into narcotics use. He was also informed about community-based programmes planned in conjunction with the International Day Against Drug Abuse and Illicit Trafficking, which falls on 26 June.
Among those present at the meeting were the Anunayaka Theros of the Malwathu and Asgiri Chapters, senior clergy representing several Buddhist Nikayas, Christian priests, Hindu Kurukkals, Muslim religious leaders, senior government officials including Secretary to the President Dr Nandika Sanath Kumanayake, ministry secretaries, senior tri-forces commanders, Inspector General of Police Priyantha Weerasooriya, heads of relevant institutions, senior security officials, and representatives of the “Ratama Ekata” National Steering Council.
[PMD]
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