ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Rajni Gamage

Reforms in Sri Lanka

In times of volatility, elite groups try to stay relevant and increase their relative power. The conditions under which bargains and increased competition among elite groups happen, help understand the country’s economic and democratic trajectory, and what options are available for progressive interventions. An analysis of various elite groups’ responses to domestic debt restructuring, labour law reforms, anti-corruption, and a new counterterrorism act reveals patterns in terms of shaping the outcomes and impact of these reforms.

Sri Lanka is on the verge of becoming a poster child of International Monetary Fund (IMF) reforms. The country’s inflation has dipped to a single digit after two years, being one of the highest in the world a year ago (Ondaatje 2023). At a time when many Asian, African, and Latin American (peripheral market) countries are facing severe economic and balance of payment stress and are likely to seek IMF bailouts sooner or later, such narratives of success or failure are important to these countries (Reuters 2023). They are also important to international financial institutions (IFIs) such as the IMF, who are champions of eliminating price controls, deregulating capital flows, and dismantling trade barriers, what is often called the “neo-liberal agenda.”

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