Thread by @ChayuDamsinghe

A lot of conversation on RW as PM and what it means politically, but a quick thread on what I think a GR-Prez/RW-PM led (mostly) SLPP government means economically

#EconomicCrisisLK #SriLankaEconomicCrisis #SriLankaCrisis #SriLanka #lka

Disclaimer - I'm no political expert, so my views on POLITICS are no more important than any other random citizen. What I'll try to explain is my personal view on the economics on which I hopefully have more credibility

There are 2 arguments I hear on why this is great for SL's economic crisis

1. RW coming in means political stability->more economic stability->economic revival

2. RW has international connections that will bring in lots of bridging finance

Let me explore what I think of this

1 - political stability

Having a PM is better than no PM for sure. But stability is a big ask in my view. Remember, this is still mostly an SLPP government led by GR - who the people keep asking to leave.

On that basis alone, there's a huge credibility issue

But credibility matters now, because the upcoming period is going to have a lot of difficult economic choices and realities. Some of these were directly put in place due to bad economic policy earlier, some of it is a less-bad outcome than what we could have had.

But all painful

The question then is, can this new government have the credibility to carry out these measures AND have the ability to be seen as listening to the people's demands?

I personally feel not. If not, that means more protests, more strikes, continued instability.

Add to this the support that RW might or might not have. So far, other than the SLFP, the other opposition parties haven't indicated their support. Then either, RW is essentially leading a pre-Mirihana coalition OR a shaky 113.

Neither of those are stable credible outcomes

In my view, RW doesn't add a lot of stability - and I personally think we'll see him resigning/chased out/kicked out sometime over the next few months as well.

Back in the same hole again.

2 - RW's international credentials

I think people really overestimate the value of personalities in geopolitics. No government is going to give SL money because Ranil is their friend, any more than anyone is giving money because Mahinda was their friend.

Geopolitics is based on negotiation. Sure, perhaps Ranil is more likely to negotiate with India/West than others. But negotiations again, aren't based on personal connections, but on actual bilateral agreements.

So then, the question goes back to 1 - is RW a stable leader?

I'm not saying things won't improve and we won't get ANY money. We likely will get some. But I personally feel all these billions and billions people talk about is just irrational.

As long as our political situation is shaky, so will our financial situation.

A key part to both of these is how accepted the GR/RW led SLPP coalition will be publicly. If people continue and increase protests, more likely they will fall as well. If not, they can continue for longer.

The realistic best case I see here is some form of SLFP/SJB/TNA and hopefully JVP alliance that forms a national government. If JVP doesn't join, they need to wholeheartedly support. That sort of arrangement COULD last long enough to bring stability and then have an election.

The economic situation is very dire, there's no question about it. I would very much prefer it to be fixed as opposed to anything else, so IF RW can do it, great. However, looking at what is in line to be done, and how other countries have worked out, I doubt it's likely he can.

But eventually, we'll get some solution that works for enough people that we get through this. Until then, we'll have to look out for each other and keep hoping for the best.

Few more things
- How will RW handle a SLPP cabinet
- How will an SLPP gov led by a UNP PM be seen internationally
- How will remittances recover when RW and GR in power