Sri Lanka 2018: The Unfinished Drama of Island State Democracy

As in 2017, the political landscape in Sri Lanka in 2018 appeared to be characterised by constant difficulty with democracy. First, through an unexpected landslide electoral victory, the former President Mahinda Rajapaksa was back on the political stage and he was able to challenge the governing coalition and its leaders. Second, the outbreak of a deep constitutional crisis caused – albeit for a short time – the break-up of the governing coalition and the appointment of Rajapaksa as the new Prime Minister. As far as foreign policy is concerned, 2018 witnessed the continuation of Sri Lanka acting as a «tightrope walker», striving to maintain its metaphorical balance between India and China. Moreover, the year under review saw the government’s efforts to develop new ties with Asian countries such as Japan, Pakistan and Iran. In addition, Sri Lanka developed new links with international economic and security organisations in order to pursue its goal of becoming a significant political and economic hub in the Indian Ocean. At economic level, the year under review saw a further weakening in economic performances. There were also some moderately positive outcomes (the government was able to keep the public finances in order and to increase state revenues, and positive steps in the reform process towards increased revenue-based fiscal consolidation were recorded). However, these positives outcomes were put at risk by the worsening of the economic trends, caused by the uncertainty and instability due to the constitutional crisis of the last months of the year.