Additional tranche of four-year IMF loan released amid improved economic climate; President Wickremesinghe’s challenge to Supreme Court provoked criticism.

IMF authorised disbursement of new tranche of $3bn four-year loan. Executive Board of International Monetary Fund (IMF) 12 June approved second review of Extended Funds Facility and authorised disbursement of additional $336mn as part of four-year loan. Colombo 26 June said it had sealed agreements with bilateral creditors committee led by Japan, France and India to restructure debt of $5.9bn. Official statistics released 14 June showed country’s economy grew by 5.3% in first quarter of 2024, considerably faster than 2% growth predicted by IMF for 2024. Govt’s plans to institute IMF-backed rental income tax by April 2025, designed to replace promised property, inheritance and gift taxes, sparked considerable uncertainty and criticism over impracticality and additional burdening of middle class, rather than wealthy groups govt and IMF said they intended to target.

President Wickremesinghe’s criticism of Supreme Court sparks controversy. In parliamentary session Wickremesinghe 18 June attacked Supreme Court’s 17 June determination that key elements of govt’s draft Gender Equality bill were inconsistent with constitution and needed to be removed or amended. President’s statement widely condemned with Bar Association of Sri Lanka 19 June criticising speech as “threat to Supreme Court and entire judicial system” and rejecting president’s proposed parliamentary select committee to review Supreme Court ruling as “dangerous precedent”. Senior Tamil National Alliance member M.A. Sumanthiran 18 June alleged president’s statement was part of larger plan to intimidate Supreme Court into approving constitutional amendment to extend president’s term from five to six years.

Sinhala-dominated parties appealed for support of Tamil voters in north and east. During visit to northern towns, Samagi Jana Balawegaya leader and likely presidential candidate Sajith Premadasa 9 June promised he would implement thirteenth amendment, designed to grant enough powers to provinces to satisfy demands for self-rule by Tamils in north and east. National People’s Power (NPP) and Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayake 11 June also visited north, said JVP party also supported “properly implementing” provincial council system, falling short of clear promise to fully implement thirteenth amendment.

Civil war commemorations drew large crowds in eastern and northern provinces, UN criticised govt inaction over unsolved enforced disappearances, and proposed economic reforms divided parties. 

Wave of events marked 15th anniversary of civil war’s end. Ahead of fifteenth anniversary of end of civil war on 18 May, known increasingly by Tamil activists as “Tamil Genocide Remembrance Day”, Tamils in north and east of island, and in diaspora communities worldwide, organised series of commemorations: notably, police 12 May in eastern town of Trincomalee arrested four Tamil women serving “kanji” dish to commemorate Tamils killed in final weeks of 2009 war; other commemorations in north and east were allowed to proceed under tight police and military surveillance. Thousands 18 May gathered at Mullivaikkal beach, scene of final massacres of thousands of Tamil civilians and fighters in 2009; marking first ever attendance of international dignitary at war commemoration event, Amnesty International Sec Gen Agnès Callamard spoke at Mullivaikkal, criticising govt’s “clampdown on memory initiatives, including arrests, arbitrary detentions and deliberately skewed interpretations of Tamil community’s attempts to remember people lost to war”. Consortium of Buddhist and Tamil groups 17 May held first-ever inter-religious and inter-ethnic event in capital Colombo’s centre to commemorate all those killed.

UN report highlighted enforced disappearances. UN Office of the High Commissioner for Human Rights 17 May issued major report detailing decades of unsolved, un-investigated enforced disappearances of tens of thousands of people, urging govt to acknowledge involvement of “state security forces and affiliated paramilitary groups” and stating that “alleged perpetrators, including current and former senior officials and diplomats, continue to evade justice”; report criticised govt’s poor record in addressing issues and urged it to establish independent persecutorial authority.

Govt’s economic policies courted criticism. Cabinet 6 May approved twenty-year power purchase agreement for development of 484 MW of wind power generated by stations in north west; economists and opposition politicians criticised lack of competitive bidding for deal, as environmentalists highlighted threat to migratory birds. Former president Mahinda Rajapaksa 16 May attacked proposed sale of state-owned enterprises, a central pillar of International Monetary Fund’s (IMF) economic reform agenda.

Govt lobbied International Monetary Fund (IMF) and creditors to secure loan disbursement amid rising poverty, while fifth anniversary of 2019 Easter bombings fuelled political tensions and calls for justice.

Govt sought to secure next tranche of IMF loan. Govt officials sought to convince IMF enough progress was being made to approve second review of Extended Fund Facility and disburse third tranche of roughly $335mn. Govt 16 April stated that main stumbling block in reaching deal with commercial creditors was “baseline parameters” for bondholders, whose payout will depend on nation’s economic growth; bondholders think IMF calculations underestimate growth potential and ability to repay bonds. Campaigning for presidential election, which is due by mid-Oct, may complicate negotiations or delay debt restructure deal into 2025. Meanwhile, Asian Development Bank mid-April projected moderate growth of 1.9% in 2024 and 2.5% in 2025. World Bank 2 April reported devastating increase in poverty from 11% of population in 2019 to almost 26% in 2024.

Fifth anniversary of Easter bombings spurred political attacks and justice campaigns. Ahead of anniversary of 2019 Eastern attacks on 21 April, main opposition party Samagi Jana Belawegaya 4 April promised within two months of gaining power to appoint Special Investigative Commission on attacks to be served by special team of investigators, pledging to establish special court to expedite prosecutions. Delegation of opposition National People’s Power (NPP) 18 April presented its seven-point action plan, including promise to establish special investigative commission. Gen Sec of President Wickremesinghe’s United National Party, Palitha Range Bandara, 19 April attacked both NPP and Archbishop of Colombo Cardinal Malcolm Ranjith, accusing NPP of having links to bombers and Cardinal of “associating” with former President Gotabaya Rajapaksa. Commemorating attacks, Cardinal Ranjith 21 April delivered scathing attack on Gotabaya Rajapaksa, accusing him of obstructing investigation and failing to pursue new revelations about attack, while also accusing Attorney General of failing to take legal action against govt and security officials found negligent by multiple inquiries. Rajapaksa 25 April issued detailed statement rejecting allegations.

As elections lingered on horizon, govt’s authoritarian legislation faced opposition and communal tensions persisted in Northern Province; govt secured next portion of International Monetary Fund (IMF) loan.

Political jockeying intensified as elections appeared increasingly likely. With presidential elections required by mid-Oct, and parliamentary elections possible before or soon after, negotiations for possible electoral alliances intensified. President Wickremesinghe held discussions with leaders of current ruling party, Sri Lanka Podujana Peramuna (SLPP), even as quiet efforts continued to reconcile Wickremesinghe and former allies in opposition Samagi Jana Balawegaya (SJB). Frontrunner, leftist National People’s Party (NPP), held series of rallies countrywide.

Govt’s anti-democratic laws met opposition at home and abroad. UN High Commissioner for Human Rights Volker Türk 1 March expressed concern over new or proposed laws to severely restrict rights to freedom of assembly, association and expression. UN Human Rights Council “Core Group” 4 March warned of Online Safety Act’s potential “chilling effect on freedom of expression” and cautioned govt on proposed “Commission on Truth, Unity and Reconciliation”, calling for “inclusive participatory process to build trust in advance of any legislation”. Civil society organisations 14 March met with Wickremesinghe to explain opposition to draft Non-Governmental Organisations Act, which permits authorities to monitor, collect information and restrict activities. 

Communal tensions persisted in north. After “Core Group” 4 March noted “with concern reports of increased tensions around land seizures” in North and East, police 8 March arrested eight Tamil Hindus at worship site in Northern Province’s Vavuniya district despite court order permitting prayer ceremony; police 19 March released them amid reports of mistreatment in detention. Govt 4 March announced bill aimed at “formally managing the discovery and preservation of the nation’s antiquities and archaeological heritage”, likely through granting even stronger powers to Archaeology Department, which has seized land used by Tamils and Muslims in north and east. 

Govt secured next part of IMF loan. IMF 21 March announced new staff level agreement with govt, paving way for disbursement of third instalment of $300mn loan; govt figures 16 March showed economy grew by 4.5% in last quarter of 2023, despite overall negative economic growth of -2.4% in 2023.

Opposition challenged President Wickremesinghe’s pursuit of authoritarian legislation, as speculation grew over potential delay to presidential election and govt touted economic recovery. 

Opposition challenged govt and parliamentary Speaker over constitutionality of recent actions. Main opposition party Samagi Jana Balawegaya (SJB) 26 Feb, later joined by other parties, began effort to bring no-confidence motion against Speaker Mahinda Yapa Abeywardana for his decision to certify enactment of widely-criticised Online Safety Act (OSA) on 24 Jan, pointing to law’s failure to incorporate amendments required by earlier Supreme Court judgment. Supreme Court 29 Feb dismissed Tamil parliamentarian M.A. Sumanthiran’s “fundamental rights” petition challenging law’s validity on same grounds; govt 13 Feb had announced plans to amend law without specifying how. Parliament 20 Feb received Supreme Court ruling approving constitutionality of main thrust of proposed Anti-Terrorism Act, while requiring amendment of some clauses. Other legislation likely to restrict political freedoms remained in pipeline, including tighter controls on NGOs and community groups. Meanwhile, SJB leader Sajith Premadasa 26 Feb challenged validity of Constitutional Council’s appointment of Deshabandu Tenakoon as head of Police Service, arguing Speaker had no right to cast decisive vote. 

Uncertainty rose regarding upcoming presidential election. Feb saw renewed public speculation that govt may postpone presidential election – mandated by constitution between 18 Sept and 17 Oct. Former president Maithripala Sirisena 11 Feb claimed Wickremesinghe had convened group of lawyers to advise him on options for abolishing executive presidency. In response, Wickremesinghe’s media division 13 Feb asserted election will be held within mandated period. Public concern about possible postponement of election comes in wake of opinion polls showing Wickremesinghe receiving support from just 9% of those polled in Dec 2023. 

Wickremesinghe boasted of economic progress. Wickremesinghe 7 Feb gave strikingly upbeat assessment of economy in speech to parliament, citing improvements in multiple macroeconomic indicators, even as govt 28 Feb announced plans to expand beneficiaries of its flagship welfare program to nearly 40 percent of population; speech laid out ambitious agenda for deep structural changes to economy unlikely to be accepted easily by powerful constituencies. U.S. Assistant Sec of State Donald Lu 15 Feb praised country’s “historic comeback” from economic crisis.

Govt began 2024 with raft of legislation to expand powers of surveillance and repression and advance its contested reconciliation agenda, while police crackdown on drugs led to tens of thousands of arrests. 

Govt moved to retain and expand surveillance powers. Parliament 24 Jan passed govt’s Online Safety Bill, despite uncertainty whether it included amendments required by earlier Supreme Court review; civil society and opposition parties criticised expansive powers law would afford state to regulate speech on social media, as opposition lawmaker labelled it “threat to our democracy”. Global tech and social media companies 16 Jan urged govt to withdraw bill. Govt 10 Jan presented to parliament proposed Anti-Terrorism Act, which was only modestly changed from version first introduced in early 2023 that was roundly criticised; Office of the High Commissioner for Human Rights (OHCHR) 19 Jan criticised new draft, while bill’s constitutionality was challenged in numerous Supreme Court petitions.

Govt sought to advance its reconciliation program amid opposition. Govt 1 Jan publicised text of legislation to establish Commission for Truth, Unity and Reconciliation amid near unanimous opposition from survivors’ groups and rights activists who view it as designed to win support at UN Human Rights Council. Parliament 9 Jan passed legislation to establish eleven-member “Office for National Unity and Reconciliation” despite opposition from most Tamil parliamentarians and many civil society groups. Police 4 Jan arrested and detained for eight days prominent Tamil woman campaigner seeking truth about enforced disappearance of her son, following protest against President Wickremesinghe’s visit to northern town of Vavuniya. 

Police faced criticism for heavy-handed drug crackdown. Public Security Minister Tiran Alles continued to champion police operation which to date has led to arrest of over 40,000 suspected of using or selling drugs and detention in prison or “rehabilitation” centres of more than 3,000; while popular among some parts of public, OHCHR 12 Jan criticised “heavily security-based response to country’s drug problem”. 

International creditors recognised economic progress. International Monetary Fund officials 19 Jan stated reforms had produced first signs of recovery but stressed importance of “sustaining the reform momentum”.

Govt unlocked new tranches of international financial assistance in bid to raise revenue, while inter-ethnic reconciliation generated debate and allegations of abuse dogged police leadership.

Govt secured international financial support. International Monetary Fund’s (IMF) Executive Board 12 Dec announced completion of first review of Extended Fund Facility, opening way for cash infusion of $337mn; IMF judged govt’s performance “satisfactory” for raising revenue and rebuilding reserves, while noting challenges ahead, including need to further raise revenue, eradicate corruption and enhance governance. Meanwhile, Asian Development Bank 8 Dec announced it had approved $200mn concessional loan to help stabilise financial sector and World Bank 20 Dec announced release of $250mn in budget support. Parliament 13 Dec approved govt’s 2024 budget featuring plans for ambitious increase in revenue.

Inter-ethnic reconciliation initiatives provoked controversy. Sangha for Better Sri Lanka, comprising half a dozen Buddhist monks, and members of diaspora-based Global Tamil Forum (GTF) 7-15 Dec jointly conducted series of meetings with wide range of religious, political, civil society leaders and diplomats in effort to launch “national conversation” based on “Himalaya Declaration” agreed by pair in April 2023; GTF described initiative as attempt to create country based on “pluralistic character”, “equal citizenship” and devolution of power to provinces. Domestic and diaspora Tamil groups attacked initiative for falling short of long-standing Tamil demands and for supporting govt’s reconciliation agenda, including controversial truth and reconciliation commission due for 2024 launch. In eastern district Batticaloa, Buddhist monk-provocateur Ampitiye Sumanarathana physically blocked two Tamil parliamentarians from joining Tamil cattle herders demanding return of land forcibly seized by Sinhala farmers.

Controversy swirled around leadership of Sri Lanka police. Supreme Court 14 Dec ruled that acting Inspector General of Police (IGP), Deshabandu Tenakoon, and three other police officials had illegally detained and tortured man in 2011. Police arrested more than 15,000 people in island-wide anti-drug blitz, amid allegations of excessive force and lack of due process; campaign was personally directed by Tenakoon and public security minister Tiran Alles, who 16 Dec announced police had been authorised to use “maximum force” against suspected criminals.

President Wickremesinghe presented ambitious 2024 budget ahead of next year’s presidential polls, while Supreme Court ruled on former presidents’ economic mismanagement and anti-terrorism regulations.

Govt’s 2024 budget goals met with scepticism. Ahead of presidential elections set for late 2024, President Wickremesinghe 13 Nov presented to parliament 2024 budget. Extremely ambitious target of raising revenue by 47% was widely questioned given govt’s failure to make sufficient progress raising chronically low revenue, which fell about 15% below International Monetary Fund’s projections in 2023. Budget also boosts govt workers’ pay, increases state pensions and proposes new taxes and crackdown on tax avoidance.

Supreme Court issued landmark judgment on former presidents’ economic mismanagement. Supreme Court 14 Nov found former presidents Mahinda and Gotabaya Rajapaksa, and other top officials, responsible for economic mismanagement between 2019-2022, which violated public trust and Sri Lankans’ constitutional rights. Judgment brought no immediate legal repercussions, though opposition called for Rajapaksas to be barred from holding office in future. In another important ruling, Supreme Court 14 Nov ordered state to pay 1mn rupees ($3,000) to Muslim social media activist Ramzy Razeek, whose detention for five months on charges of breaching often-abused International Convention on Civil and Political Rights Act violated his fundamental rights.

Calls mounted for new 2019 Easter bombings investigation. In interview with ABC Australia, former Deputy Inspector General of Police and head of Criminal Investigation Dept Ravi Seneviratne 16 Nov for first time publicly accused intelligence agencies of actively interfering with police investigations into 2019 Easter bombings; Sri Lankan Catholic Church next day repeated calls for new, independent investigation. Separately, Supreme Court 13 Nov ruled as unconstitutional anti-terrorism regulations on “religious extremism” introduced in 2021 but never applied, designed to process hundreds of Muslims arrested following 2019 Easter suicide attacks.

Tamils held commemorations. Thousands of Tamils across north and east took part in annual ceremonies in week leading to “Great Heroes Day” on 27 Nov, commemorating those who died in struggle for independent state; police disrupted or blocked numerous local gatherings, with at least one organiser arrested under anti-terrorism law.

Govt unlocked International Monetary Fund (IMF) support and introduced, then withdrew, controversial bills aimed at boosting executive powers; ethno-religious tensions simmered in northeast.

IMF and govt agreed next steps in economic reform program. Following three-week delay, govt and IMF 19 Oct reached new agreement to complete first six-month review of four-year Extended Funds Facility bailout program, paving path to further $330mn financial support pending approval of IMF’s Executive Board; deal came after China 11 Oct announced one of its two main creditors had reached tentative deal to restructure $4.2bn worth of debt (over half of what govt owes Beijing).

Govt pursued bills expanding executive power. Govt 3 Oct presented – but later in month quietly withdrew – new draft of Anti-Terrorism Act to parliament, which immediately drew domestic and international criticism for over-broad definition of terrorism and dangerously expansive powers afforded to executive and security agencies. Ten UN Special mandate holders 18 Oct argued that bill “does not go far enough to remedy the defects of […] draconian Prevention of Terrorism Act”. Govt 3 Oct also introduced Online Safety Act to parliament that generated strong criticism for its intent to create “Online Safety Commission”, appointed by and answering to president, with sweeping powers to determine that a statement is “false” and remove online content; more than 40 petitions were registered at Supreme Court challenging bill.

Ethno-religious tensions persisted in eastern province. Monk-provocateur Ampitiye Sumanaratna 15 Oct led small procession of Sinhalese to install Buddhist statue on disputed land in Batticaloa district, at site of long-running dispute over land used by Tamil dairy farmers now taken over by Sinhalese farmers. Police, on orders of president, 19 Oct removed Buddhist statue. Sumanaratna 25 Oct was filmed threatening to kill Tamils.

In other important developments. Wickremesinghe 21 Oct announced intention to hold presidential election in 2024, followed by parliamentary elections due by mid-2025; 16 Oct appointed controversial commission to advise on changes to electoral law. Wickremesinghe 3 Oct angrily rejected possibility of international commission to investigate 2019 Easter bombings after UK’s Channel 4 in Sept broadcast allegations that military intelligence facilitated attack and obstructed investigations.

New allegations of govt involvement in 2019 Easter bombings took centre stage, UN Human Rights chief lamented country’s poor accountability and ethnic tensions grew more severe.

New claims surfaced alleging govt involvement in 2019 attacks. UK news outlet Channel 4 on 5 Sept broadcast documentary with eyewitnesses alleging military intelligence officials were involved in organising 2019 Easter Sunday suicide bombings and obstructed police investigations before and after attacks, accusing current head of State Intelligence Service Suresh Salley of meeting directly with bombers. In response, Catholic Church reiterated calls for international investigation, while main opposition party called for international support to domestic probe; Salley, former president Gotabaya Rajapaksa and Defence Ministry rejected accusations, while President Wickremesinghe 10 Sept announced two separate committees to investigate claims.

Ethnic tensions escalated. Tamil district judge T. Saravanarajah 23 Sept resigned his position in northern district of Mullaitivu and fled country, after receiving threats apparently linked to recent rulings that had angered prominent Sinhala nationalist monks and govt parliamentarians. Stick-wielding Sinhala nationalists 17 Sept attacked Tamil parliamentarian Selvarajah Kanjendran in Trincomalee, Eastern Province, during march commemorating death of Tamil nationalist hunger striker; organisers cancelled another commemoration event in capital Colombo amid threats.

UN High Commissioner for Human Rights (OHCHR) criticized “accountability deficit”. UN Human Rights Council 11 Sept commenced session following High Commissioner’s 6 Sept report that found “lack of accountability at all levels remains the fundamental main human rights problem”; report urged international community “to play an important complementary role”. Govt reiterated its rejection of resolutions that set up OHCHR “accountability project” and criticised OHCHR’s “increasing mandate”. Govt 15 Sept published revised draft of Anti-Terrorism Act, followed on 19 Sept by release of draft Online Safety Act; activists and opposition politicians expressed strong criticism of both, arguing they posed major threats to democratic rights.

In another important development. International Monetary Fund officials 27 Sept announced they had failed to reach agreement with govt to unlock next $330mn tranche of funding; officials expressed concern at lower-than-projected govt revenue and announced completion of first six-month review also depends on foreign debt restructuring.