The petrol and gas queues are gone, but economic statistics paint a grim picture. The country’s international debt continues to mount inexorably as it did before the economic crash. Two years ago when the economic crisis hit, it was in the region of USD 80 billion. According to news reports, Sri Lanka’s debt has now increased to over USD 100 billion amid marginal improvement in some macroeconomic measures (such as inflation), while unpaid principal and interest on selected debt exceed USD 6.4 billion. This bodes ill for the country. It shows that little that is fundamental has changed in these past two years. The country, and government, continue to spend more than they earn and can only make ends meet by borrowing from abroad.

Since Sri Lanka suspended servicing the external debt of bilateral and commercial creditors in April 2022, unpaid debt service has increased to close to USD 4.5 billion, while unpaid interest has gone up to USD 2 billion by the end of last year. In 2023, the government got little over USD 2.12 billion in foreign financing by signing 16 agreements with foreign development partners and lending agencies. However, nearly all of this, US$ 2.02 billion was in the form of loans which need to be repaid. The economy contracted by 2.3 percent last year after shrinking by 7.3 percent in 2022. Economic growth is estimated to be around 2 percent this year, but the income level will still be less than it was two years ago. Worse is to come. The World Bank has recommended that “a sufficiently deep debt restructuring is needed to restore Sri Lanka’s debt sustainability.’’

Government leaders have been saying that the country needs political stability if it is to continue on the past of economic recovery. Not just politicians but economists, too, have been saying the same thing. Unfortunately, as the above statistics show, the evidence for the economic progress that the country is said to be experiencing, under the present government, is limited. Some sectors of the economy, notably tourism, are doing very well. But other sectors, such as small scale manufacturing, are facing huge difficulties. There are also hardly any large scale investments taking place, and where they are, as in the case of the Mannar wind power project, it appears that the terms are highly disadvantageous to the country.

Illegitimate Government
There is an uncertainty that prevails in Sri Lanka about the future of elections which is the topic of conversation everywhere, in the markets and supermarkets, over meals and drinks with friends and colleagues, whether the government will hold elections or not. This is the uncertainty that is going to undermine the country. Already two sets of elections have not been held, the Provincial Council elections for over five years, and the local government elections for over a year and there is no sign of them being held either, except in the words and promises of government leaders. The Presidential Elections due this year will hopefully set the stage for other elections to follow and Sri Lanka will be democratically stable even as it copes with the economic challenge.

For the past two years there has been a freeze on the repaying of most debt as the country is officially bankrupt and going through the initial phases of an IMF-led debt restructuring programme. When the country finally negotiates a settlement with its debtors it will have to repay those loans that it is currently not repaying, and the burden on the masses of people will get even worse. This calls for problem solving by a government that is seen as being legitimately voted in by the people at free and fair elections. A government that avoids holding elections in 2024 will be perceived as illegitimate and will find it difficult to restrain the anger of the people when the economic crisis grows in intensity.

At present, the political uncertainty that prevails in the country is not due to elections but is rather due to the possibility that there will be no elections. Not having elections on the grounds of wanting to have political stability is to put the cart before the horse. All democratic countries have elections. England held elections in the middle of World War II, and so did Sri Lanka during the three-decade long war and in the midst of insurrection that almost toppled the government. Elections are a given in a democratic society, and everything needs to be arranged around the elections, and not the other way round. The reason there is political uncertainty in Sri Lanka today is that no one knows if elections that are due will, in fact, be held.

Early Elections
Constitutional experts have pointed out that extending the term of office of the President and Parliament would require both a 2/3 majority in Parliament and approval by the people at a referendum. They also point out that the President’s legitimacy to seek an extension of his term of office is even more compromised as he was not elected by the people. Unlike a President elected by the people, Article 31 (e) of the Constitution specifies that a President elected by Parliament cannot call for early elections after four years. Pragmatism also dictates that the government is unlikely to press for a referendum to extend its life. Public opinion polls have consistently shown that the two main opposition presidential candidates from the SJB and NPP are ahead of the incumbent President. Therefore, it can be surmised that the majority of voters at a referendum would not wish to postpone elections and provide a longer period to the government.

When in 2022 President Ranil Wickremesinghe became President, through a vote in Parliament, he was able to crack down and disable the protest movement due to the special conditions prevailing at that time. The economic situation was dire and the street protests were getting out of hand. But today there is a state of normalcy in which there are no visible shortages but most people are worse off, economically, than they were in 2022 due to the shrinking of the economy by 7 percent in 2022 and 2 percent in 2023. The deteriorating political and economic situation of the country is a matter of deep concern and should be given the highest priority by the leadership that does not prioritise self–interest and instead prioritises national interests.

Also, it is unlikely people will acquiesce in a crackdown by a government that is denying them the right to vote. A legitimate government, that is voted for by the people, is needed to cope with the international debt which is bound to get worse once Sri Lanka reaches agreement with its creditors to start repaying its debts. In these circumstances, economic recovery that benefits the masses of people needs to be given priority. The postponement of elections is not only democratically illegitimate, it would also generate public opposition that would create political uncertainty and drive away economic investors. The best course of action for the government would be to end the political uncertainty by working with the Election Commission to declare the date of the Presidential Election sooner rather than later.