An old joke diplomats in the sub continent are familiar with is that if Delhi sneezes, Colombo ends up catching a cold. Jokes apart, it highlights the strong and historic socio-political connections between the South Asian neighbours and the resultant currents and undercurrents that invariably tend to inform political developments to a far greater extent in Colombo than in Delhi.
Such is the impact that no sooner a new president or government is elected in this country, it has become almost obligatory for that party to make a beeline to Delhi to pay pooja to the powers that be there. However, things are a little different when it comes to new beginnings on that side of the border, with Big Brother ‘inviting’ its neighbours to Delhi. This time is no different with Sri Lanka’s President due to attend Prime Minister-elect Narendra Modi’s inauguration of a third term in office.
It is in this backdrop that last week’s results of India’s General Elections must be viewed from this part of the world. Whatever way one looks at it, the results are likely to have profound implications for this Indian Ocean island nation, still reeling from its worst-ever economic crisis and heavily indebted to its northern neighbour.
One may argue that Sri Lanka has turned the corner and is well on its way to recovery, but how does one explain the fact that a country that was declared bankrupt when its total debt stock of $ 80-something billion in 2022 that was deemed unsustainable has now ballooned to nearly $ 100 billion despite the non-servicing of bilateral debt and International Sovereign Bonds (ISB) and no corresponding rise in forex income?
It will be recalled that it was India, and more specifically the Modi administration, that rushed to Colombo’s rescue at the height of the economic crisis and prevented the country from sliding into complete economic anarchy through a combined assistance package that included emergency funds to pay import bills as well as a credit line to import essential commodities. Nevertheless, political commentators have also described this ‘friendly assistance’ in less complimentary terms, pointing to Delhi taking advantage of Sri Lanka’s crisis by killing two birds with one stone: endearing Colombo’s leadership to Delhi, thereby getting a solid foothold as subsequently evidenced by the divestiture of key State-owned assets to Indian entities, and checkmating regional foe China in the process.
Two years down the line, it is clear that both objectives have been successfully achieved by Big Brother, contributing to the last Modi-led regime’s perceived sense of invincibility not only on the domestic front but also regionally. However, in hindsight, it appears that it is this very perception of invincibility and the attendant complacency that may have contributed to its lacklustre performance at the polls, with Modi’s Bharatiya Janata Party (BJP) failing to live up to expectations of a 400-plus seat landslide victory. Its final tally of 240 seats – way short of even a working majority – means that it will now be at the mercy of its smaller alliance partners to survive in office. Already, at least two of the partners have demanded several Cabinet ministerial posts, indicating that Modi will not have it free and easy anymore.
Even as Sri Lanka awaits in eager anticipation of its own elections in the near future, the tectonic shift in Indian politics following the results of its General Elections are likely to have profound implications given its newfound dependence on Big Brother. Modi, unlike earlier, will now – for the first time in 10 years – be forced to first comply with domestic compulsions before looking across the Palk Straits.
While political analysts begin the post-mortems on Modi’s strategy to reshape India under the microscope, what is clear is that it appears to have spectacularly backfired on the electoral front, with impressive big data seemingly blinding the BJP juggernaut to the travails of the rural and urban populace that has led to a widening gulf between the rich and the poor, leading to a fatal miscalculation of electoral strength.
The scenario certainly rings a bell across the Palk Straits, with Sri Lanka’s perceived economic recovery polarising the rich and poor to a greater extent than ever before. At the end of the day, Modi’s mediocre electoral performance appears to boil down to a class battle that led to not only polarisation between those benefiting from his economic policies and those who were not, but also near complete neglect of the poor. Blinded by big data on the economic front, driven essentially by corporate India, it was easy to forget the poor, but the collateral cost of that miscalculation has been dear – as Modi has found out the hard way.
The post-mortems now underway are likely to reveal that dissatisfaction appears to have been led by India’s farming community, which has been at loggerheads with the Modi administration for quite some time. The farmers’ main grouse with the Centre has been its agriculture policy that arguably has not been consonant with that of the vast farming community, which continued to experience a drastic drop in incomes as a direct consequence of policy issues.
It is this disgruntled yet important segment that the Congress Party-led main Opposition coalition appears to have successfully nurtured by championing their cause, making inroads into Modi heartland, including the most populous State of Uttar Pradesh where the BJP’s fortunes have nosedived compared to the last poll.
Coming back to Sri Lanka and the Presidential Election that is now just five months away, the parallels seem similar. It will be recalled that the initial protests that ultimately snowballed into what became the ‘Aragalaya’ or ‘People’s Struggle’ was in fact the farmers’ protests, owing to the disastrous overnight fertiliser import ban imposed by former President Gotabaya Rajapaksa.
Even though the new interim administration was quick to reverse the fertiliser import ban, the subsequent heavy depreciation of the rupee has driven this essential farming ingredient beyond the reach of the average farmer. Farmers are caught in a catch-22 situation as farm gate prices do not compensate for the required investment in costly fertiliser, leading to poor harvests and a corresponding drop in income.
As in India, it is those at the receiving end of the regime’s new economic revival policies that are lining up behind the Opposition parties, most notably the left-of-centre Janatha Vimukthi Peramuna (JVP), now rebranded as the National People’s Power (NPP). According to opinion polls, the party has made impressive gains owing to its grassroots focus as opposed to the main parties that continue to be focused on the macro picture. Besides, rising poverty – alarming at the last count, with official data indicating seven million people or one-third of the population now being classified as being below the poverty line, exactly double the figure from two years ago – has provided the Opposition in general and the NPP in particular a readymade vote bank which is theirs to lose going forward.
Meanwhile, the regime, blinded by its own recovery narrative, has studiously avoided the issue of rising poverty as well as that of rising unemployment, which have contributed to a palpable level of youth frustration. Youth in Sri Lanka account for about one-fourth of eligible voters and will turn out to be the decisive factor in deciding the ultimate winner, as Modi across the Palk Strait has now found out a little too late.
While the economic gains post-crisis have to be acknowledged, what requires deeper analysis is the sequence of the recovery effort. Back in 1991 when India found itself in the same shoes as Sri Lanka now, the Government at the time led by Prime Minister Narasimha Rao and Finance Minister Manmohan Singh was very particular about getting the sequence of the recovery formula right. The duo relied on a three-pronged strategy that ensured the country never had to go back to the International Monetary Fund (IMF) as opposed to the 16 times that Sri Lanka has done so.
The sequence of the three-pronged strategy was specific: first provide relief to those worst affected by the crisis, recover their personal economies, and then introduce necessary reform. Sri Lanka’s recovery process, however, has been in reverse order, with reforms preceding relief, throwing people from the frying pan into the fire. As a result, the thriving middle class has been effectively wiped out, creating a dangerous polarisation between the rich and poor. The gulf between the two is now fertile breeding ground for all sorts of extremists and a hunting ground for political opportunists looking for easy prey.
What is unforgivable is that this nation has been there, done that, and suffered the consequences of such polarisation decades back, leading to an insurgency coincidentally under the same actors in not-so-very-different roles.
Whether one likes it or not, it is the middle class that brought about a sense of both political and economic stability in this country. With that stabilising factor no longer available and the ranks of the poverty-stricken having swelled to over seven million, Sri Lanka is a ticking time bomb that needs to be handled with great care. Therefore, political choices that have to be made over the course of the next few months cannot and should not be based on emotions but rather on careful consideration of credibility and capacity to deliver.
Therefore, creating a stable and accountable political leadership through prudent use of the ballot is the only way forward. In that sense, the voters in India have set the benchmark by reining in a runaway train and whether those across the Palk Straits will take the hint, only time will tell.