Similarities and differences in economic policies of Bangladesh and Sri Lanka after uprisings

Bangladesh’s new government took over in August, while Sri Lanka’s did so in September. Both governments are outcomes of similar popular uprisings. Sri Lanka’s political organisers remained active for two years after the uprising, eventually gaining power through elections. In Bangladesh, though unelected, interim advisers hold power with the consensus of political parties.

The world closely watches these two South Asian transformations, eager to see how each government fulfills the political and economic expectations of its people, especially when much of their economic independence is under the International Monetary Fund’s (IMF) influence.

Sri Lanka held its presidential election in September, followed by parliamentary elections in November. In both elections, the National People’s Power (NPP), led by the Janatha Vimukthi Peramuna (JVP), gained power. Anura Kumara Dissanayake became president, and Harini Amarasuriya became prime minister. Both are under sixty and nearly the same age.

The JVP initially surprised many by appointing an intellectual as prime minister. Although 56 per cent of voters in Sri Lanka are women, and women played a significant role in the uprising, the government claims this appointment wasn’t about gender. This move signals the party's shift from a 'radical' leftist image toward a more centrist approach.

This is the first time a woman, based on merit, has been appointed to one of the country’s highest positions, not by virtue of being someone’s wife or daughter. The NPP continues to appoint individuals outside traditional political circles in other roles as well.

Sri Lankans have grown weary of the elite, two-party rule for seven decades. One silent demand of the uprising was to break this structured setup. JVP has been gradually addressing this.

Instead of viewing everything in the country through a Sinhala-Tamil lens, the JVP looks at problems through the perspective of the rich and poor and discusses solutions accordingly. Therefore, despite being the dominant Sinhala party, they have avoided highlighting ethnic issues in their election campaigns.

Even with the possibility of holding power alone, JVP formed coalitions with like-minded smaller organisations, including various professional, worker, and civil society groups. This coalition structure allows President Anura to receive continuous feedback from all levels of the society, guiding economic policy accordingly. Many professional organisation leaders have been included in the cabinet. The coalition’s organisational approach has made the first state budget quite practical.

The new government focuses on three economic priorities: poverty reduction, gradual digitisation of the economy, and environmentally friendly living. For the last goal, they aim to integrate their cultural heritage with a green economy. Anura believes this will boost tourism.

Sri Lanka aims to earn $5 billion from tourism this year. In the first seven days of March, around 7,500 tourists visited daily. However, to reduce the budget deficit, additional revenue is needed. Taxes on cigarettes, beverages, and other sectors with minimal impact on the middle and lower classes have been increased. The government plans to increase revenue by 23 per cent in the next 12 months while limiting expenditure growth to 13 per cent.

The military sector still receives a substantial budget allocation. The armed forces’ budget increased by 12 billion rupees to 437 billion rupees. Sri Lanka ranks among the highest globally for per capita military spending. Concurrently, to appease Tamils, the government allocated 100 million rupees for developing the central library in Jaffna, which Sinhala soldiers burned during the civil war.

The new government plans to spend 5 billion rupees on road development in Tamil areas and 7–8 billion rupees for the Malay community. Through these measures, JVP is integrating minorities into its economic redistribution vision. The president personally oversees the economy.

In foreign policy, JVP has shifted from its strong anti-India stance, aiming to maintain balanced relations with Asia’s two major powers, China and India. Anura has visited both countries.

A similarity between Bangladesh’s current government and Sri Lanka’s is that the NPP is reviewing questionable agreements made with India. India’s Prime Minister’s visit to Sri Lanka next month will clarify these agreements' outcomes. The Adani group has already withdrawn from a controversial LNG power project in response to JVP’s objections, as the agreement terms weren’t Sri Lanka-friendly.

However, Anura hasn’t neglected balancing relations since India remains a significant source of tourists, second only to Russia. Anura, cautious in foreign policy after observing Trump’s America, seeks to maintain peace with both China and India.

Regarding Adani, JVP’s stance is bolder than Bangladesh’s. Bangladesh’s interim government talks about merely ‘re-evaluating’ similar controversial contracts. Before the uprising, protesters were deeply angry about these agreements, especially regarding tax exemptions.

Comparing JVP and Anura’s post-uprising governance with Bangladesh’s shows that JVP recruits talented activists for various administrative roles instead of elite families, especially from professional and worker organisations. In Bangladesh, such appointments are made by ‘elite’ individuals from home and abroad.

Many political appointments in Bangladesh are made among academics, who lack organic ties with grassroots communities. Highly educated young women involved in the uprising have not prominently joined the government or political parties in Bangladesh.

While Bangladesh’s government aims for reforms via sector-based commissions, Sri Lanka’s Anura coalition politically organises professionals directly, bypassing bureaucratic delays.

Bangladesh’s government talks about political consensus but seems to wait for party consensus before taking poverty alleviation or social safety net steps, which is puzzling. Generally, political parties don't oppose such initiatives.

A report published in Prothom Alo on 6 March shows that from July to February, government food aid rice and wheat distribution dropped by nearly 11 per cent, with relief distribution declining more sharply.
Poor people and marginalised women are overlooked amid calls for reform. Professionals and workers who disrupt public life by blocking roads or railways receive some additional support.

Post-uprising, Bangladesh formed a task force under former BIDS director KAS Murshid to draft economic strategies. The 12-member team submitted a 526-page report two months ago. Another economic ‘white paper’ by experts was submitted three and a half months ago.

People are looking for actionable steps from these reports. Political gridlocks hinder crucial improvements like statistical system upgrades. Nonetheless, efforts to curb money laundering and increase legal remittance flows have revitalised the economy.

Sri Lanka focuses on practical governance without seeking applause. The government avoids the old Sinhala-Tamil binary, opting for an economic binary. This approach has helped Tamil communities support the NPP, prompting the government to plan increased Tamil police recruitment.
Bangladesh’s uprising promised to reduce inequality but has since fragmented society along cultural lines, alienating minorities from the uprising’s core.

Both countries strictly follow IMF directives. President Anura openly admits, “Sri Lanka’s economy isn’t independent; we’re under IMF oversight.” Bangladesh is in the same situation. The IMF’s stance on Bangladesh’s student representatives in government remains unclear, but IMF influence is likely reflected in the upcoming budget.

Sri Lanka’s 17 February budget curbed state spending and subsidies, with no significant wage increases.

JVP seems to temper its leftist stance, avoiding radical system change but pursuing center-left reforms to ensure transparency and reduce corruption.

The private sector will lead economic efforts. Loss-making state enterprises will operate under public-private partnerships. Anura’s economic policy will be tested through this audit. Flood-affected farmers have already protested for subsidies, but IMF constraints limit government support. Rice prices have increased. Although economic indicators are positive, change is slow.

Bangladesh’s liberal VAT policy hasn’t spurred significant economic growth, and inflation remains above double digits due to higher commodity tariffs. IMF hasn’t disbursed the fourth tranche of a $470 million deal, delaying it until June, enforcing austerity measures.

Both countries face employment crises due to investment shortages. A significant portion of income of boght the countries is spent for debt, a burden resulting from past governments’ debt-financed development models. Repaying this liability will take time.

As a result, there will soon be limited opportunities to increase investment from state revenue in Bangladesh or Sri Lanka. Consequently, the chance to boost domestic employment is also low. However, the uprisings have created an expectation of a relatively better life among the youth of both countries, and this pressure is already being strongly felt in Bangladesh.

The center-left uprising has already taken on a center-right character. It’s not surprising that right-wing groups would try to take advantage of the uprising’s abandonment of its core political commitment. Anura is desperately trying to increase state investment by any means to reduce unemployment. Those who get elected in Bangladesh’s upcoming elections will face the same challenge.

**Altaf Parvez is a researcher on history

**This analysis appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Rabiul Islam.