Thursday Oct 02, 2025
Thursday Oct 02, 2025
Wednesday, 1 October 2025 01:30 - - {{hitsCtrl.values.hits}}
By Tisaranee Gunasekara
During her 107-day presidential election campaign, Kamala Harris (having inherited the Democratic Party candidacy after the precipitous departure of Joe Biden) tried to project herself as the true change agent. That image was blown to smithereens on the talk-show ‘The View’, just a month before the election. Asked what she would have done differently from President Biden in the last four years, she answered: “There’s not a thing that comes to mind.”
Her ‘Not a thing’ answer horrified Democrats, thrilled Republicans (who used it to create many a campaign ad), and marked a turning point in the election. In her recently released memoir, ‘107 Days’, Harris compares her answer to pulling the pin of a hand grenade. To the voters, her answer brought to mind the seminal failures of the Biden presidency, from his inability to deal with the affordability crisis to his enabling Israel’s genocide in Gaza. Many of those voters, believing in Donald Trump’s promises to curb inflation and bring peace to Gaza, abandoned both Kamala Harris and the Democratic Party in November 2024.
In Sri Lanka, Anura Kumara Disanayake contested the September 2024 election as the 100% change candidate, and spent most of his first year as the continuance president.
Disanayake came into office just as the country was crawling out of the economic abyss Hurricane Gotabaya had flung it into. In September 2024, the biggest fear about a Disanayake presidency was that it will bring about a Gotabaya 201, another cyclone of bad decisions wrecking the fragile recovery achieved by Ranil Wickremesinghe. In September 2025, a key criticism President Disanayake’s first year is not inane adventurism but unnecessary timorousness.
President Disanayake, in his first UN speech, focused on the need to combat global poverty. No such focus was discernible in national policymaking in the past year. Lanka’s poverty explosion wasn’t his (or Ranil Wickremesinghe’s) creation but a Rajapaksa construct. According to the ADB, “Sri Lanka’s economic crisis led to a sharp increase in poverty and socio-economic vulnerability. Poverty levels rose to 25.0% in 2022 from 13.1% in 2021” (https://www.adb.org/sites/default/files/linked-documents/57035-001-sprss.pdf). Poverty increased still further in 2023 to 27.5% but decreased to 24.9% in 2024.
As the World Bank emphasises in its latest report, ‘Sri Lanka Public Finance Review 2025 – Towards a Balanced Fiscal Adjustment’, a disproportionate share of the burden of the crisis and the recovery was borne not by rich or even middleclass Lankans but by poor Lankans: “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” (https://documents1.worldbank.org/curated/en/099090825205582722/pdf/P501002-32a393bd-fa6b-497c-b777-69fa8e12079a.pdf).
A quarter of the populace subsisting below the poverty line; over half of the population (55.7%) being multi-dimensionally vulnerable. These are perilous problems in need of urgent solutions. Add to that 16% of households being food insecure (especially female-headed households); and more than half of households using such debilitating coping mechanisms as skipping meals, eating less preferred food or limiting portion sizes. Between 2021 and 2024, malnutrition among underweight children under 5 years increased from 12.2% to 17%; stunting among children under 5 years increased from 7.4% to 10.5% ((https://www.ohchr.org/sites/default/files/documents/hrbodies/hrcouncil/sessions-regular/session60/advance-version/a-hrc-60-21-auv.pdf).
The problem is not so much the IMF as Lankan policymakers’ lack of interest in the problem. For instance, the IMF has set a minimum target of 0.7% of the GDP for social safety net spending. This target was not met either in 2023 or 2024. We spent less on poverty alleviation not because the IMF ordered us to but because we didn’t care enough and prioritise enough. The austerity trap was of our own making.
In his first year, President Disanayake managed to maintain growth by taking the difficult political decision of sticking to the economic trajectory charted by Ranil Wickremesinghe (while strenuously denying that authorship). But no such political will was discernible in dealing with poverty (and inequality). It is a strange disconnect for the leader of a party which flies the hammer and sickle banner outside its glitzy headquarters.
Sacred cows, from military costs to Israel
In his UN speech, President Disanayake lamented the trillions spent on weapons of war while poverty rages across the globe, a murderous pandemic. Rightly so; but his words would have carried more weight if his own Government had taken even a baby step to prune Lanka’s gargantuan defence budget in the last one year.
According to the latest available data, Sri Lanka is among the 50 most militarised countries in the world, ranking 48 in the Global Militarisation Index (GMI). And Sri Lanka failed to reach anywhere near the top 50 countries in Social Progress Index, ranking a very low 74. The war has been over for a decade and a half. Spending more on defence than on poverty alleviation and other measures to ensure social stability and cohesion makes no sense, economically, politically, or even from a national defence point to view. President Disanayake can set this right, but has opted not to, not in his 2025 Budget nor in his 2026 Budget estimates.
He has been equally reluctant to tax the rich, occupying a space way to the right of both the IMF and the World Bank.
The IMF has repeatedly underscored the need to broaden the tax base in order to reduce reliance on poverty-increasing indirect taxes. Since the latest Structural Adjustment Programme began, the IMF has also been urging Colombo to introduce a wealth tax and an inheritance tax.
The World Bank, in its new report, warns that the extreme imbalance in direct: indirect tax ratio (and the resultant dependence on indirect taxes which cuts into purchasing power and living conditions of poorer Lankans) can hamper the Government’s effort to reach a growth target of 6%. It advocates a minimum effective rate of 15% Corporate Income Tax (CIT) on all companies, both domestic and international (with a 30% statutory nominal rate). It also urges the Government to improve compliance at the top end of income distribution and estimates that focusing on net higher earning individuals could increase Personal Income Tax (PIT) revenue by a massive 169% and PAYE revenue by 75%.
The Wickremesinghe administration’s decision to increase direct taxes was falsely decried by the then Opposition, including the JVP, as anti-people. As the latest World Bank report demonstrates, this increase impacted primarily on the richest 10% of Lankans (unlike the January 2024 VAT hike and exemption removal which increased poverty by 2.2%). Households in the richest decile bore 76% of the PAYE tax burden and 66% of the PIT burden. Increased direct taxes, together with increased transfers, reduced poverty by 6.4% in 2024.
Unfortunately, the Government is as unlikely to increase direct taxes as it is to reduce military expenditure. It has also backtracked on its campaign promise to increase daily wage in the estate sector to Rs. 2,000 and subsequent Budget pledge to increase estate worker daily wage to Rs. 1,700. Incidentally, it will be instructive to see whether the Government moves beyond rhetoric to ratify even one of the 53 ILO Conventions Sri Lanka has evaded ratifying, especially such fundamental ones as C155 (Occupational Safety and Health Convention, 1981) and C187 (Promotional Framework for Occupational Safety and Health Convention, 2006).
Contrary to its change-centric rhetoric and transformational promises, the Government shows a debilitating inability to take on entrenched political, business, military or religious interests. For instance, throughout the campaign, and even before, the NPP/JVP promised to decriminalise homosexuality by scrapping colonial era sodomy law. But once in Government, it went mute on the promise, obviously due to its unwillingness to upset temple and church dovecots. The resistance to direct taxes (especially wealth tax and inheritance tax) is also likely to come from within the ruling party (JVP) and the ruling coalition NPP. NPP/JVP ministers and parliamentarians might march under the proletarian banner on International Workers Day but their asset declarations place them firmly within property-owning and middle/high income cohorts. Why would they back taxation measures which would hurt their personal finances, even if doing so would benefit Sri Lanka as a whole and non-privileged
Lankans in particular.
Another reason for Government’s curious timorousness might be an insufficient understanding of socio-economic and political realities, beyond familiar ideological matrixes. Take, for instance, the Government’s fear of antagonising Israel. Is it due to the mistaken belief that if we utter a word of criticism, Sri Lanka will lose Israeli jobs and Israeli tourists? If so, the Government obviously doesn’t understand that Israel is today a near-pariah state. There are very few countries in the world (including countries far poorer than us) who will send their citizens to work in a state which is morally abhorrent and unsafe (due to its penchant to start regional wars). Similarly, there are very few countries where Israeli tourists feel welcome and protected.
As Israeli columnist Dani Bar On wrote, “I escaped to a Greek Nudist Paradise only to discover Israelis are hated there too.” He went to the remote Samothrace in Northern Aegean, only to encounter telling graffiti: ‘A vacation from Genocide – Not here’ (Haaretz – 18.9.2025). Sri Lanka is probably the only country in the world which bails out Israeli tourists who attack its own citizens (contrary to Sinhala-Buddhist extremist propaganda, the hotelier assaulted by two Israeli tourists in Arugam Bay is a Sinhalese). In this extremely unfavourable global context, Israel needs us more than we need Israel, a truth as alien to the NPP/JVP mindset as the desirability of direct taxes.
But the Government is ahead on two scores: its seemingly sincere desire to tackle waste and corruption; and the Opposition.
This unprecedented Opposition
Former Secretary General of Parliament Nihal Seneviratne’s memoir, ‘Memories of 33 Years in Parliament’, provides glimpses of a past which seems more akin to another planet than another country. During his long career, he often acted as secretary to Lankan parliamentary delegations on international visits.
“I recall one of our members of an Inter-Parliamentary Union delegations in a faraway Scandinavian country coming to see me with what he called a ‘huge problem.’ He had an hour long telephone call to his spouse in Sri Lanka. He told me she had been in a delicate state of health and he needed to speak to her. He had then been hit with a telephone bill amounting to over 100 Euros. He wanted me to settle this bill. I then very gently reminded him that at the start of the trip, I had very politely told all delegates that any personal overseas telephone calls would be on their own account. He wanted me to speak to our ambassador in that country and ask him to foot the bill which I politely refused to do. He finally had to pay the bill himself” (excerpted in ‘The Sunday Island’ - 2.3.2025).
That was the country we had and lost. Lost to such a degree that when the NPP/JVP Government introduced the long awaited bill to scrap presidential privileges, the Opposition, instead of backing it, took the coward’s way out by staying away from the chamber during voting time.
During the time of the pandemic and the economic crisis, the Government spent a staggering sum of Rs. 421 million on renovating Mahinda Rajapaksa’s presidential retirement evidence. Rajapaksa obtained permission for this project via two cabinet papers which he presented in 2020 and 2021 in his capacity as Prime Minister (he was also the Minister of Finance). According to information obtained by the Daily Mirror under an RTI request, over Rs. 15 million was spent on bathroom accessories, over 15 million for granite laying and almost 32 million for electrical work (https://www.dailymirror.lk/expose/Renovation-of-MRs-official-residence-No-proof-to-show-Govt-procurement-guidelines-were-followed-during-purchases-through-Lanka-Building-Materials-Corporation-Limited/333-304174).
This horrendous expenditure was made under the Presidential Privileges Act. The Opposition was so lost to all sense, it didn’t realise how the Rajapaksas abused this Act and that repealing it was a demand by many who voted for Sajith Premadasa/SJB and Ranil Wickremesinghe/UNP in the last two elections.
The non-SLPP Opposition went onto trump that inanity with an obscenity, joining hands with the Rajapaksas at the UNP convention. And applauding Sagara Kariyawasam when he came out with some of the most shameful lines ever with customary shamelessness: “Our two camps made the same major mistake… Both of us, in order to gain power, ignored the services rendered by our opponents to the country…pointed our finger at the opposite side and called them ‘Thief, Thief, Thief’, with no proof, with no reason. That error was committed by us and by you” (https://www.youtube.com/watch?v=u02YkZdqdEw).
With one blow, he did the Government’s job for it, by labelling the entire Opposition untruthful, untrustworthy, and opportunistic, a bunch of imposters who would say anything, do anything for power. He – and his audience – lacked the sense to realise what a gift they presented to a Government squirming under the verbal faux pas of its ministers.
A mediocre Government and a suicidal Opposition: is this our fate?
