A Chequered Year

Photo courtesy of WSWS

“Democracy faces a perfect storm of autocratic resurgence… To fight back, democracies need to protect key elements of democracy, like elections and the rule of law, but also profoundly reform government so that it delivers fairness, inclusion, and shared prosperity.” Kevin Casas-Zamora, International Institute of Democracy and Electoral Assistance (Guardian- 11.9.2025) 

The JVP’s inimitable general secretary Tilvin Silva was generally the final speaker at the NPP’s main presidential election campaign rallies. And he would always end his speech with a poem from the JVP’s past. The words were an emotive appeal to “rag-clad masses” with “stomachs burning from hunger and hearts burning from grief,” exhorting them to rise up, rise up, your turn has come.

Those combative words suited the times. By September 2024, almost a quarter of Sri Lankans were living in poverty and more than half the population (55.7%) multi-dimensionally vulnerable. In 2023, there had been a million+ electricity disconnections. The removal of electricity subsidy alone had increased poverty by 1.9% and contributed to a 5% decrease in disposable income of the poorest tenth of Sri Lankans, according to World Bank figures.

By September 2024, Ranil Wickremesinghe had managed to stand on its feet the economy Gotabaya Sulanga (Gotabaya Wind) had upended. The economy started marking positive growth in the last two quarters of 2023 and reached an astounding 5.3% growth rate in the first quarter of 2024. But this improvement didn’t bring much benefit to the poorer half of Sri Lankans. Aswesuma and Urumaya were steps in the right direction but woefully inadequate to contain the flash flood of povertisation Gotabaya Sulanga had unleashed and the first year of belt tightening worsened.

(Source – World Bank – Sri Lanka Public Finance Review 2025 – Towards a Balanced Fiscal Adjustment)

The task was to maintain this growth path while shifting the burden of recovery from the poor and the vulnerable to those more economically able to shoulder it. And 42% of Sri Lankans thought that Anura Kumara Dissanayake could be better trusted to alleviate the poverty and affordability crises than incumbent Ranil Wickremesinghe, opposition leader Sajith Premadasa or Rajapaksa scion Namal.

In September 2024, many Sri Lankans – including this writer – feared that a Dissanayake presidency would bring forth a JVP Sulanga, resulting in a Gotabaya 201. One year on, that fear has proven to be groundless. President Dissanayake and his government have managed to keep Sri Lanka on the growth path. True, he and his party pretend that the righting of the economy was all their own work. That’s hardly a cardinal sin since a President Sajith Premadasa or a President Namal Rajapaksa would not have been more truthful.

However, the first year of Dissanayake Presidency has brought little relief to the hungry masses Tilvin Silva addressed in his rousing campaign finale. According to the World Bank, “The fiscal adjustment has also disproportionately impacted the poor, who continue to grapple with job and income losses… Food prices remain more than double their pre-crisis levels and real wages are yet to recover. In response…many households have scaled back spending on human capital, particularly on nutrition, healthcare, and education”. Life may not be as hard as it was in 2022 or 2023 but the hope of a more affordable world has begun to erode as the NPP/JVP’s massive vote loss at the 2025 Local Government polls demonstrates.

Home 

Caution was the dominant tempo of the first Dissanayake year, a conscious determination to avoid fast runs and great leaps. On the economy and on contentious areas like constitution making, this caution is comprehensible. But there were other, less fractious, issues and promises the administration could have addressed and didn’t – a failure that might have contributed to its May 2025 lacklustre performance.

Failures such as reforming or scrapping the repressive Online Safety Act can be explained by a fact of political life most political parties champion democracy while in opposition but rarely follow through when in government. But less comprehensible is the tardiness in removing the grotesques giveaways successive presidents had presented themselves with. It was only in June 2025, the cabinet asked the legal draughtsman to prepare a bill for the removal of presidential privileges. Thus it is possible to surmise that had it not been for the electoral drubbing the government received in May 2025, Mahinda Rajapaksa would still be enjoying the services of 26 electricians, 16 chefs, four civil engineers, four technical engineers, three personal trainers, one carpenter, one dog minder et al and Gotabaya Rajapaksa eight chefs, one personal trainer, one dog minder et al, at our expense. In fairness, it must also be said that no other government would have scrapped presidential privileges, even tardily.

The removal of presidential privileges could have been achieved within the first four months of Dissanayake presidency since the Chitrasiri report was handed to the president in early December (It was never made public like so many other presidential commission reports, including non-controversial ones like the report on Roshain Chanaka, the 22-year-old FTZ worker killed in June 2011 while protesting against a Rajapaksa attempt to impose an extractive pension scheme on private sector employees). Hopefully, the promise to slash the perks and privileges of current and former parliamentarians too would be implemented soon. The asset declarations of parliamentarians on both sides of the aisle demonstrate that almost none of them need a lifetime pension!

Perhaps the tardiness in removing perks and privileges of the political class was due to sheer incompetence (a signature characteristic of this administration). Perhaps too it was due to pushback by deeply entrenched vested interests. So far, the government’s record in taking on such vested interests is not encouraging. It makes public threats, but fails to take practical measures to follow through, the clash with rice milling oligopoly being a case in point. This inability bodes ill for the future, for the government can address poverty and affordability crises only if it is willing and able to confront entrenched political interests, without and within.

As the second year of the Dissanayake presidency dawns, the government is faced with its own affordability crisis – how to fulfil its economic promises without increasing the budget deficit exponentially and while remaining within the borrowing limit it has set itself. As the 2026 Appropriations Bill demonstrates, the government has closed off the obvious path to fiscal viability, a rational fact-based reduction of military expenditure. The only other way to deal with the poverty and affordability crises without triggering a macro-economic meltdown is to increase direct taxes and reduce indirect taxes. On the advisability, indeed the desirability, of this path, there is a broad consensus, ranging from the Bretton Wood Twins to local experts.

The IMF has made a wealth tax and an inheritance tax a part of its conditionalities. Sri Lanka was supposed to introduce both taxes in 2023; President Wickremesinghe bought time till 2024. Dissanayake government has gone mute on the issue, strangely, for direct taxes in general and wealth and inheritance taxes in particular have long been key left/progressive demands the world over.

In its latest report, the World Bank makes a powerful case for shifting the tax burden from indirect to direct as a necessary measure to ensure socio-economic justice and to maintain growth momentum. The Bank points out that the January 2024 VAT increase from 13% to 15% and removal of all VAT exemptions (including on books) increased poverty by 2.2%. Reliance on indirect taxes has become a structural constraint on revenue mobilisation and poses direct risks to post-crisis recovery by reducing purchasing power and consumer demand of poorer Lankans. Its favoured solutions include a 15% minimum effective tax rate on all companies, domestic and international, and a greater focus on improving compliance by high earners. (Incidentally countries like France and the UK adopt innovative methods to achieve this aim, such as checking social media accounts for lifestyle details and satellite imagery about expensive building renovations.)

A recent article in Lanka News Web quotes an investment banker, “This budget will show whether the government can push through reforms that shift the tax burden onto those best able to pay or whether it will buckle under political pressure and return to old patterns of borrowing and austerity.” The article also quotes former Inland Revenue official Kalyani Dahanayake and economist Deshan de Mel, both advocating wealth and inheritance taxes. The recent asset declarations of ministers and parliamentarians might explain, at least to some extent, the NPP’s curious reluctance to even broach the subject of increasing direct taxation and why wealth and inheritance taxes might not be implemented under its watch.

In a delicious irony, the supposedly arch capitalist Ranil Wickremesinghe was far more willing to take the political class on in the matter of taxation. Sri Lanka’s reliance on indirect taxation decreased under his watch from 76.7% in 2021 to 66.5% in 2023. But the imbalance is projected to return and the share on indirect taxes is expected to go above 75% in the next three years. As the World Bank warns, indirect taxes have already reduced the purchasing power of pensioners and public sector workers causing a “deterioration in living conditions for the most vulnerable groups…” The situation is no better for those holding low to middle level employees in the private sector (garment factory workers are a prime example) and those in the gig economy.

If the poverty and affordability crises worsen and the wealth and the pay gaps widen, public mood will darken, a danger point for any democracy. As American left wing commentator Hasan Piker pointed out (in relation to the assassination of American right wing political activist Charlie Kirk), “Everything seems unaffordable. Everything seems worse than it was for the previous generation. I think that is what we have to solve. If we don’t that, people are going to continue to grow frustrated and angry. People are resentful. People are more malleable, more susceptible to radicalisation and they more willing to act out in a violent manner when they feel like there’s no hope, there’s no other option (Politico – 11.9.2015).

And the world

Tommy Robinson (birth name Stephen Yaxley-Lennon) was the kind of right wing activist no one in the British political scene took seriously for years. That was until an American tech billionaire gave him a total makeover, including a new set of teeth. The fairy godfather billionaire who transformed Tommy Robinson from caricature to “respectable” citizen-journalist was Robert Shillman, a Zionist whose statue is adorns the grounds of Israeli Institute of Technology.

In 2024, the duly remade Mr. Robinson became a force behind UK anti-immigrant riots. This month, he was the man behind the Unite the Kingdom rally which drew over 110,000 people. Police were attacked and the government was threatened. Elon Musk, addressing the crowd via a video-link, called for the dissolution of parliament and alluded to the inevitability of a civil war. “You are in a fundamental situation here where violence is coming to you,” he said. “You either fight back or you die. You either fight back or you die. That’s the truth.”

After 2024 riots, Dr Andreas Krieg, a senior lecturer at the School of Security Studies at King’s College, London warned, “The arsonists are also now trying to be firefighters. Those who invented the broad-brush scarecrow of ‘Islamist’ to smear Muslims in civil society writ large are as much to blame as their financiers in Israel, UAE, Russia et al and the thugs now acting on it”. “Israel injects the venom of hate and Islamophobia into civil-societal discourse in Europe to undermine scrutiny of what it is doing in Palestine…” he warned again in July 7 2024. At the Unite the Kingdom rally, Tommy Robinson warned of a conspiracy to replace Europeans with non-Europeans in Europe via migration, and to make Europe Muslim.

In Sri Lanka, we’ve had birth rate theory (Tamils and Muslims) and conversion theory (Christians). For us replacement theory is new because we don’t have migrant issue. Now that toxin too is being introduced to the national bloodstream by Sinhala Ravaya. This week, its national organiser made the wholly fabricated claim that the NPP government is bringing Palestinian refugees to Sri Lanka in enough numbers to change our demographics. In a video with the incendiary title of Is the government mad to bring Gaza/Palestinian terrorists here? he said, “We are telling the government not to try to change the demographics of Lanka by bringing such people here. We know that Rohingya migrants are entering this country from one side and Tamil migrants from another side. And we see that (the government) is getting ready to create an unnecessary problem by bringing Palestinian refugees here. With that, we can see that this government is trying to artificially change the demographics of this country. This government has been accused of doing politics with the money of Muslim nationals and Muslim hajiyars and that they continue to business with extremist organisations. Those charges are being proven beyond doubt with this attempt to artificially change the demographics… We can see that people in this government take money from extremists and are trying to turn this country into a Muslims country, that they are trying to take revenge from Sinhala people… We are warning the government not to artificially change demographics by bringing these extremists and terrorists into the country, thereby creating clashes with Sinhalese.” It is perhaps material that Sinhala Ravaya is being cultivated by the Israeli lobby in Sri Lanka, and its national organiser was included in the recent “journalists” junket to Israel.

This week, the report on Digana riot was publicised by the Human Rights Commission detailing how Sinhala-Buddhist extremist elements used a road accident to set off a violent attack on Muslims. When socio-economic pains reach unbearable levels anything, starting with an incident of road rage, can ignite a violent outburst against this or that minority, with organisations like BBS and Sinhala Ravaya playing the role of fire-starters. That was why attempts to ignite anti-Muslim violence failed in 2016 and 2017 and succeeded spectacularly in 2018.

If the NPP/JVP government fails to adequately address the pain of the masses Tilvin Silva addressed in his rousing campaign finales, despair will set in. When voters feel cheated again and they are ready for the next pendulum swing, lies, however grotesquely silly, can be believed and violence, however irrational, can become possible.