Balancing India and China Is the Challenge for Sri Lanka’s Dissanayake

The challenge of modernity is to live without illusions and without becoming disillusioned.

— Antonio Gramsci, Selections from the Prison Notebooks.
On September 22, 2024, a headline from CNN reverberated across Sri Lanka: “Sri Lankans elect Marxist-leaning Dissanayake as president to fix the economy.” The deceptively simple headline conceals the hope, frustration and the persistent change that characterize today’s Sri Lanka. National People’s Power (NPP) party leader Anura Kumara Dissanayake now stands at the helm. Yet questions echo in the collective consciousness: Is this the dawn of genuine transformation, or merely another chapter in Sri Lanka’s lengthy political saga? This time, the air feels charged with an unsettling potential.
The Sri Lankan people’s yearning to disrupt the status quo has eclipsed their fear of the unknown — the nebulous movement embodied by AKD, a leader emerging from the rural hinterlands to topple the established order represented by the seasoned Ranil Wickremesinghe, a six-time president.
From his inaugural moment, AKD’s presidency marks an audacious experiment for the country. His NPP is a heterogeneous ranging from radical leftists rooted in the Janatha Vimukthi Peramuna (JVP) to progressive elements. Here, we witness a Antonio Gramsci-esque experiment in adapting Marxist movements to the ever-shifting landscape of social conditions.
Gramsci, a thinker who grappled with the nuances of ideological purity, argued for the necessity of pragmatism to forge a broader appeal. AKD’s own pragmatic turn has inspired a tentative optimism not only within Sri Lanka but also in the cautious hearts of its neighbors, especially India. The pivotal question persists: Can AKD balance reform with pragmatism during his presidency, or will he become ensnared in the very contradictions he seeks to transcend?
The NPP positions itself as a reformist entity distinct from its traditional Marxist roots, seeking to redefine its identity within the broader historical panoply of leftist movements. Yet — as with all revolutions — the shadow of past dogmas hovers, threatening to undermine the delicate foundations of reform.
AKD’s election symbolizes a profound shift in Sri Lankan politics and Sri Lankan socialism. In the 1970s, the JVP’s rigid adherence to Marxist orthodoxy privileged revolutionary fervor over pragmatic reform. Today, while the NPP acknowledges its origins, it has redefined itself as prioritizing governance and systemic reform over ideological purity. This evolution, however, is fraught with uncertainty and internal conflict, for the pull of old-guard sentiments within the JVP may clash with the drive for pragmatic governance.
As he navigates these turbulent waters, AKD faces formidable geopolitical challenges in the competing interests of India and China. Scholars  Harsh Pant and Aditya Gowdara Shivamurthy assert, “Given the economic and geopolitical scenario, pragmatism is likely to take precedence — Sri Lanka will continue to balance between India and China.” Their insights reveal a landscape shaped by competing aspirations, where AKD’s focus on governance could forge a path toward stability — though whether this is a hopeful vision or an illusory one remains an open question.
However, India’s apprehension looms large as AKD’s presidency unfolds. The strength of the NPP, particularly in its connections to Beijing, raises alarms in New Delhi, which views the burgeoning partnership as a potential threat to its own regional influence. This fear is not unfounded, since India faces the possibility that Sri Lanka under AKD might continue the economic tango with China — trading closer alignment for survival. India fears that AKD might inadvertently lean toward China. The previous Rajapaksa regime did so, which cultivated ties with Beijing, allowing increased Chinese influence through infrastructure projects like the Hambantota Port. India’s security apparatus remains vigilant; some analysts warn that AKD’s presidency could herald a recalibration of Sri Lanka’s foreign policy that may favor China at India’s expense.
As New Delhi grapples with these fears, it remains intent on countering any perceived drift of Kotte towards Beijing. Indian officials are likely to engage with AKD’s administration to promote stability and cooperation while subtly exerting pressure to ensure Sri Lanka does not slip further into China’s orbit.
This geopolitical backdrop complicates AKD’s administration, as he must navigate the intricate balance between fostering relationships with both powers while maintaining domestic support. At the heart of this precarious experiment lies a pressing challenge: addressing the economic collapse that shadows AKD’s ascent.
AKD’s ability to navigate the labyrinthine reforms required by the International Monetary Fund (IMF) and the intricate dance of debt restructuring will define the early chapters of his presidency. To secure the fourth tranche of the $3 billion IMF bailout program, Sri Lanka must demonstrate measurable progress in fiscal reforms and debt sustainability. The urgency of these reforms is palpable, for the threat of further financial deterioration looms large, threatening the very fabric of the nation.
Debt restructuring is a particularly thorny issue, fraught with the weight of a massive external debt burden and exacerbated by years of mismanagement. AKD inherits a complex negotiation landscape, where cooperation from key creditors — China, India and private bondholders — will be critical. In the days preceding the election, Wickremesinghe warned that “any move to alter the basics of the agreement could delay a fourth tranche of nearly $3 billion from the IMF package, which is crucial for economic stability.” Such warnings echo in the corridors of power, reminding us of the fragile balancing act AKD must perform.
While China has already extended temporary reprieves in the form of debt rollovers, the way toward more comprehensive restructuring deals still needs to be discovered. Beijing’s strategic interests, particularly regarding infrastructure projects under the Belt and Road Initiative (BRI), complicate the process. India, eager to witness stability in Sri Lanka, stands ready to support AKD’s reformist agenda, yet the shadows of previous projects, like the Adani wind power initiative, loom large, casting a shadow of uncertainty on future collaboration.
AKD’s administration must navigate the treacherous waters of fiscal consolidation, implementing IMF-mandated measures that include tax reforms, public revenue generation and enhanced governance in public enterprises. While these reforms are crucial for economic stabilization, they are not without risks. Public discontent could rise as the specter of austerity measures threatens to exacerbate inflation and unemployment.
The balancing act between India and China constitutes one of AKD’s most formidable challenges. On the one hand, India anticipates that his rise could distance Sri Lanka from the Rajapaksa-era ties to Beijing, marred by allegations of corruption. Conversely, AKD’s historical ties to China and the NPP’s pragmatic stance suggest that Beijing may still see him as a favorable partner. As a Chinese journalist candidly expressed, BRI projects could gain momentum under AKD’s presidency, perhaps even surpassing the ambitions of his predecessors.
This intricate balancing act will inevitably dominate AKD’s foreign policy. His early promise to cancel the controversial Adani wind power project, while unlikely to fracture relations with India immediately, signals a willingness to make bold decisions that challenge external powers. Yet, whether such actions will tilt the balance in Sri Lanka’s favor or further entangle it in diplomatic complexities remains shrouded in uncertainty — much like his earlier campaign against the US MCC agreement, which revealed a readiness to confront foreign influence when politically expedient.
Amidst these challenges, AKD’s presidency offers a flicker of hope. The ravaged economy, scarred by years of mismanagement, yearns for bold reform. AKD’s election embodies the public’s longing for something new, a desire to transcend the failures of the past. His presidency will be defined by how he navigates internal reforms and his capacity to traverse a complex geopolitical landscape deftly. The stakes are high, and the potential for failure looms large, yet the possibility of transformation lies within this uncertainty.
Sri Lanka has seen political experiments before; many leaders have succumbed to the very establishment they once vowed to dismantle. But AKD’s presidency symbolizes a nascent possibility — a collective aspiration for a better future. Success will not merely depend on policy but on forging unity in a nation long fractured by political and economic strife.
As AKD prepares for parliamentary elections in November — an event that could define his capacity to enact reforms — the lingering questions remain: Will the Sri Lankan people, civil society and international partners rally behind arduous yet necessary changes? And can AKD maintain the delicate equilibrium between ideology and pragmatism while steering Sri Lanka through the turbulence of geopolitical rivalries? Only time will unveil the true nature of this bold new experiment, a venture into the unknown where hope and despair coexist in a fragile embrace. The future, like Gramsci’s modernity, hangs between hope and uncertainty, awaiting its verdict in a world without illusions.
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.