Will lotus bud derail Sri Lanka’s economic reform agenda?

The local government election upset for the incumbent coalition could spell doom for the country’s economic reform agenda if Former President Mahinda Rajapaksa loyalist faction’s Sri Lanka Podujana Peramuna (SLPP) pushes its advantage in parliament, and the government may have to sacrifice some of its long-delayed reforms to maintain power.

“There are stories that a new government will be formed. We don’t know which government will come into play. If that happens, the reform programme would be completely reversed, which would not be good for the country’s economy in the long run,” said Former Central Bank Deputy Governor W. A. Wijewardena.

In the recent past he had said that despite the incumbent government’s shortcomings, it was the best bet for enacting the reforms necessary to modernize Sri Lanka’s economy to attract foreign direct investment, enhance skills and boost exports.

“The government, the main party, the UNP, will now have to look back and examine itself where it has gone wrong,” he said.

Unless the parliament composition changes, there won’t be any effect on the national economy, according to Wijewardena.

National Chamber of Commerce of Sri Lanka President Sujeeve Samaraweera too echoed these sentiments, saying the local government elections results itself won’t have any immediate impact on reforms or doing business.

“Stability of course if the key; we will have to wait and see whether MPS crossover,” he said.

Numerous reports yesterday said that the SLPP was already at work, attempting to form alliances in parliament to call for a snap election through a resolution to parliament— to circumvent the constitutional roadblocks against a premature dissolution of parliament— to ride into power on the support it currently enjoys.