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(Bloomberg) – Sri Lankan President Maithripala Sirisena said he brutally dismissed the island's prime minister, in part because he had not investigated the plot to assassinate against him.
In a speech to the nation Sunday night, Sirisena said the plot was the "closest and most powerful reason" to replace Ranil Wickremesinghe as prime minister by former strongman Mahinda Rajapaksa. The president said that an anonymous cabinet minister was involved in the plot and that officials were trying to put pressure on the investigation.
"Faced with these political problems, the economic troubles and the powerful plot to assassinate me, the only alternative I had was to invite former President Mahinda Rajapaksa and appoint him Prime Minister to form a new government, "said Sirisena.
The move ushered in a new period of political uncertainty in Sri Lanka, which saw last year's economic growth reach its slowest pace since 2001. On Monday, Sri Lanka's 6.75% to 2028 dollar bonds tumbled to a record low of 87.4 cents The biggest decline since the bond was sold in April, according to prices compiled by Bloomberg.
The appointment of Rajapaksa is good news for China, which has forged close ties with Sri Lanka during its 10-year reign ending in 2015 and has seen the country go into debt to finance projects. # 39; s infrastructure. Wickremesinghe had attempted to rebalance Sri Lanka's foreign relations between China and India and Japan.
The Indian Foreign Ministry said on Sunday that it was closely following the recent developments in the political situation in Sri Lanka, echoing the United States and the European Union. The US State Department called on all parties to respect the Constitution, to avoid violence and to respect due process, and invited Sirisena to "immediately reconvene Parliament".
"China is once again becoming Colombo's last hope," said Shailesh Kumar, director for Asia at Eurasia Group, a political risk company, which predicts that Rajapaksa will reopen the door to financing. Chinese. "This transition will ensure that China can again overtake the Sri Lankan economy, which has a friend in the prime minister's office – unlike Wickremesinghe."
On Saturday, Sirisena suspended Parliament until 16 November, with both sides lobbying legislators for support. Wickremesinghe said at a press conference Saturday that he still commanded the support of the majority in parliament and called for a special session of the legislature to prove it. He is likely to challenge his dismissal as unconstitutional in the courts.
"Life is a struggle," Wickremesinghe told reporters, adding that not all parties should make matters worse for ordinary people.
In his speech, Sirisena said that the differences with Wickremesinghe on politics, culture, personality and conduct "have aggravated this political and economic crisis". He called on the 225 members of the Sri Lankan parliament to join the new government.
After the defection on Friday, Rajapaksa and Sirisena won the support of some 95 parliamentarians, while a simple majority does not yet need a simple majority to show that the candidate for the post of Prime Minister has the confidence of Parliament. Wickremesinghe has the support of 106 legislators. The Tamil National Alliance, which has 16 seats, has not yet specified who it will support, while another party, with six seats, has condemned Rajapaksa's nomination proposal.
As the political struggle continued, the security guard of former oil minister Arjuna Ranatunga was arrested after firing on a crowd of Rajapaksa supporters at the headquarters of Ceylon Petroleum Corp. . One person died and two others were injured.
Rajapaksa remains extremely popular in Sri Lanka, despite his controversial past. He led the final assault on separatists belonging to the Tamil minority, which sparked the brutal civil war that lasted 26 years in 2009, criticized by human rights groups and governments foreigners.
He also contracted numerous loans from China to finance major infrastructure projects, including the construction of a port in southern Hambantota – his own political constituency – which had lost ground. money and that was eventually sold to a state-owned Chinese company. equity swap on a 99-year lease. In Sri Lanka, about 80% of total government revenue is spent on debt payments.
Although it was Rajapaksa's debt that had indebted Sri Lanka, the decision to return the port to China had been taken by Wickremesinghe – and had been heavily criticized. Demonstrating the tension in relations between Sri Lanka's two most senior leaders, Wickremesinghe was forced to defend against a vote of censure supported in part by the Sirisena party. He defeated the motion.
In general, Wickremesinghe did not run the economy properly, and its replacement by Rajapaksa should appeal to the general public, said Sanjeewa Fernando, strategist at CT CLSA Securities in Colombo. The federal budget could also be delayed because of the move, he added.
"There was this notion that nothing was done properly," Fernando said. "It has to do with feeling. There is a general enthusiasm for change.
(Updates with Sirisena's statement of the first paragraph.)
To contact the reporters on this story: Iain Marlow in New Delhi at [email protected], Anusha Ondaatjie in Colombo at [email protected]
To contact the editors responsible for this story: Ruth Pollard at [email protected], Jeanette Rodrigues
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