COLOMBO, Sri Lanka ��A power struggle among Sri Lanka's top leadership has led to the return of former President Mahinda Rajapaksa, who was named prime minister in a surprise appointment that could herald closer ties with China.
On Friday evening, Sri Lanka's President Maithripala Sirisena unexpectedly dismissed Prime Minister Ranil Wickremesinghe and appointed Rajapaksa �� who was president between 2005 and 2015 �� as his replacement. Wickremesinghe is contesting his removal and is likely to challenge it as unconstitutional in the courts.
The appointment is perceived as a way for Sirisena to retain political power by co-opting Rajapaksa's residual popularity among many Sri Lankans, who credit the former president's tough approach �� condemned internationally by human rights groups �� with ending the country's 26-year civil war in 2009.
The decision to appoint Rajapaksa, who had been making political inroads against Sirisena, including in local elections, could also have a geopolitical effect given his ties to China and his history of borrowing heavily from Beijing to pay for infrastructure projects. The return of Rajapaksa may also dent New Delhi's influence in Colombo, given Wickremesinghe's attempts to rebalance Sri Lanka's foreign relations away from China and toward India and Japan.
"Sirisena brought back Rajapaksa for political self-preservation, but along the way it will re-open the door to Chinese funding," said Shailesh Kumar, Asia director at political risk firm Eurasia Group. Rajapaksa has many friends in China and handled most of the Chinese inflow, Kumar said. "This transition will ensure that China can once again prevail over Sri Lanka's economy as they have a friend in the prime minister's office -- in contrast to Wickremesinghe."
On Saturday, the United States said it was following the events closely.
"We call on all parties to act in accordance with Sri Lanka's constitution, refrain from violence, and follow due process," the State Department said on Twitter. "We expect the government of Sri Lanka to uphold its Geneva commitments to human rights, reform, accountability, justice, and reconciliation."
Although it was Rajapaksa-era loans that sank Sri Lanka into debt, the decision to hand the port back to China was made by Wickremesinghe and was widely criticized. In a sign of how fraught relations were among Sri Lanka's two top leaders, Wickremesinghe was forced to defend himself against a no-confidence vote that was backed in part by Sirisena's party. He defeated the motion.
There was a general sense that Wickremesinghe wasn't steering the economy properly, and his replacement by Rajapaksa is likely to be popular with the general public, said Sanjeewa Fernando, a strategist at CT CLSA Securities in Colombo. The federal budget may also be delayed as a result of this move, he said.
"There was this notion that nothing is being executed properly," Fernando said. "It has to do with sentiment. There is a general excitement for change."
With Sri Lanka still burdened by debt payments and global market turmoil making international financing less likely, the appointment of Rajapaksa could ensure a steady source of capital from China at a time when few other countries are interested in investing there, Eurasia's Kumar said.
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(Marlow reported from New Delhi.)
