Sri Lanka’s ruling Rajapaksa brothers have tightened their grip over the country in a landslide election victory, with voters rewarding the government for its successful control of coronavirus.

But President Gotabaya Rajapaksa and his elder brother Mahinda Rajapaksa, the prime minister and himself a former president, will have little time to savour their emphatic win, which gives them firm control over the country’s legislature.

Sri Lanka is reeling from a deepening economic crisis in the wake of the coronavirus pandemic. The economy is set to contract by 5 per cent to 6 per cent this year, with the health crisis taking a toll on tourism, which accounted for about 12 per cent of gross domestic product. The island remains closed to foreign tourists, with little clarity about when it may reopen.

Public finances and foreign exchange reserves are also under severe strain, with the fiscal deficit soaring to about 10 per cent of GDP. Sri Lanka has about $72bn in public debt, roughly half of which is owed to foreign creditors.

“We may be heading for a debt crisis where we will have to restructure our debt,” said Murtaza Jafferjee, chairman of JB Securities.

Mr Jafferjee said the definitive victory would give the Rajapaksas the political space needed to make difficult economic policy decisions. “They have an unprecedented majority, which will spare them from having to follow excessively populist policies,” he said.

Sri Lanka’s sovereign bonds rallied sharply on Friday after the election results were announced.

The government imposed a lockdown in late March to control the spread of coronavirus among the island’s 22m people. A curfew, which lasted for months but was gradually eased, proved highly effective, with Sri Lanka recording just 2,839 coronavirus infections and 11 deaths.

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Public approval for the government’s management of the pandemic helped the Rajapaksas’ Sri Lanka Podujana party win 145 of the seats in parliament.

The opposition United National party — led by two-time former prime minister Ranil Wickremesinghe — was virtually wiped out, winning just a single seat. Mr Wickremesinghe, a member of the legislature since 1977, lost his own seat in his former stronghold Colombo, the national capital.

“The talk in the street was that if the UNP was in power in this crisis we’d all be dead,” said hotelier Chaminda Rajapakse, who has no relationship to the island’s ruling family.

Sri Lanka is an important strategic battleground between China and India. Mahinda Rajapaksa had close ties with China when he was president.

But the family has since moved to repair relations with New Delhi, and India’s Prime Minister Narendra Modi was quick to congratulate them on their victory. “We will . . . take our special ties to ever newer heights,” Mr Modi said on Twitter, after a call with the Sri Lankan prime minister.

The election results leave the SLPP just a few seats short of the two-thirds parliamentary supermajority required to amend the constitution, which had long been one of its top policy priorities.

The Rajapaksas are eager to scrap provisions of the 19th amendment of the constitution, which was adopted in 2015 and moved Sri Lanka away from an all-powerful executive presidency towards a parliamentary system.

Analysts say the SLPP will easily secure the support of the handful legislators needed to proceed with its plans for a constitutional overhaul, raising concerns about an erosion of Sri Lanka’s democratic freedoms.

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Via Financial Times