By Dhananath Fernando
Originally appeared on the Morning
In the aftermath of Sri Lanka’s Local Government Elections, political parties across the spectrum are rushing to claim victory. But amid the noise of celebration, one hard truth emerges: the real losers could be the citizens of Sri Lanka.
While the National People’s Power (NPP) has secured control over a notable number of local councils, the final outcome paints a picture of fragmentation, not consolidation. In many councils, no single party holds a clear majority – opening the door for instability. Power shifts at the local level, particularly during budget votes and council sessions, could become common, driven by crossovers and shifting alliances.
This instability is no minor issue. In Sri Lanka’s governance structure, local government leaders wield significant administrative power, from approving housing plans to managing grassroots-level infrastructure. When political disruption seeps into this tier, it directly stalls economic activity in towns and villages across the country.
Further complicating the picture, the President recently remarked that the Government would “think more than 10 times” before allocating funds to councils not under its control. If this sentiment translates into action, we risk seeing small-scale development projects stall, limiting rural and urban-level economic dynamism at a time we need it most.
Beyond the numbers, this election signals a larger shift. The ruling party appears to have lost over two million votes compared to last year’s General Elections. Even accounting for changes in voter turnout, the decline as a percentage of total votes is significant. This drop weakens the Government’s political capital, an essential currency for pushing through unpopular but necessary reforms.
Unfortunately, the first 100 days of the current administration have not delivered on the momentum of reform many had hoped for. While no major missteps have been made, there has been little visible progress on the growth-enhancing reforms promised earlier. Instead, much of the current economic trajectory is the result of groundwork laid in 2022-2023, including debt restructuring and the continuation of the International Monetary Fund (IMF) programme.
However, it must be emphasised again: the IMF programme is a stabilisation package. It is not a growth agenda. Economic growth is – and must be – Sri Lanka’s own responsibility. Despite a modest rebound in 2024, projections for 2025 show expected GDP growth in the range of just 3.5-3.9%, according to the World Bank and Asian Development Bank.
This slower-than-expected recovery poses a major threat. Without strong growth, Sri Lanka’s ability to meet its debt obligations from 2028 onwards becomes increasingly uncertain. And growth will not come without bold reforms, particularly in State-Owned Enterprises, land, labour, investment climate, and public sector governance. These are politically sensitive areas, and advancing them requires a government willing and able to expend political capital.
The recent election results, however, suggest that the administration may become more cautious. Reforms could be further delayed, either due to internal hesitancy or increased resistance from an emboldened Opposition. In such a scenario, the price of political caution is paid by ordinary citizens: fewer jobs, slower income growth, and delayed improvements in living standards.
History tells us what happens when governments, under pressure, prioritise political survival over economic transformation. Reform fatigue sets in. Investor confidence fades. Informal sectors swell. In fragile economies like ours, uncertainty quickly breeds stagnation – and even criminality – at the local level.
Politics and economics are inseparable. Those in power must deliver change. But when reform is stalled, the pressure doesn’t disappear – it rebounds. And in the end, it’s not parties that bear the real cost; it’s the people – the farmers, workers, small business owners, and students who hoped for something better.
The best-case scenario is still within reach: a government that recognises the warning signs and takes swift, decisive steps on the reform path. But if that doesn’t happen, and reform inertia persists, it won’t matter who wins at the ballot box.
In the long run, we all lose.
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