Sri Lankan President Chandrika Kumaratunga yesterday swore in Mahinda Rajapakse, a leading figure in her own Sri Lanka Freedom Party (SLFP), as the country’s new prime minister. While the ceremony featured the customary pomp and congratulations, Rajapakse’s installation will do nothing to resolve the bitter divisions within ruling circles that culminated in Kumaratunga’s decision to sack the elected United National Front government on February 7.

Rajapakse does not have a majority in the 225-seat parliament. The United Peoples Freedom Alliance (UPFA), which includes the SLFP, the Janatha Vimukthi Peramuna (JVP) and several smaller parties, won the most seats in the April 2 election. But they are still eight short of a majority. While intense horsetrading is underway with other parties, the UPFA has yet to secure any additional backing. At present Rajapakse will have to rule as the head of a minority government—an unstable situation that will inevitably lead to more political turmoil.

While conceding defeat, outgoing prime minister Ranil Wickremesinghe warned at his press conference on April 5: “If you haven’t got a government with a majority in the parliament, then everything else is suspended. Whether it be the peace process or the economy or the administration—everything is in suspense.” He declared that the United National Front (UNF) would give the new government no period of grace and would decide “issue by issue” whether to support it or move to bring it down.

The choice of Rajapakse as prime minister has only underscored the underlying divisions among the UPFA partners and within the SLFP itself. Kumaratunga’s decision to forge a coalition with the Sinhala chauvinist JVP was vigorously opposed by sections of the SLFP, led by Rajapakse, who favoured a grand alliance with the UNF to press ahead with the peace process. As part of the coalition agreement, the SLFP agreed that Kumaratunga’s former foreign minister Laskshman Kadirgamar, not opposition leader Rajapakse, would be the prime minister in any UPFA government.

Kadirgamar was a compromise between the Rajapakse wing of the SLFP, and those led by Kumaratunga’s brother, Anura Bandaranaike, who had been vigorously pushing for a pact with the JVP. Kadirgamar was acceptable to the JVP because he had led an international campaign to ban the Liberation Tigers of Tamil Eelam (LTTE) as a terrorist organisation. At the same time, Kadirgamar was an advocate of peace talks. So Kumaratunga could use him to allay the concerns of big business and the major powers that the JVP’s inclusion in government would spell a return to war.

But the issue was not resolved prior to the election. In the course of its campaign, the UPFA refused to publicly disclose who would be its prime minister. Following the poll, there was a further delay. According to a number of media reports, Kumaratunga was compelled on Monday to back away from Kadirgamar after fierce opposition from Rajapakse. Anura Bandaranaike also made an unsuccessful bid for the post.

The reasons for the about-face stem from the weakness of the SLFP’s position. The SLFP only defeated the UNF by forging an alliance with the JVP. Its unpopularity was revealed by the poll’s results—the SLFP’s tally of seats slumped to just over 60 out of the 105 won by the UPFA. Moreover the UPFA is without an overall majority, obliging it to obtain the support of other parties—in particular, the Sinhala extremist Jathika Hela Urumaya (JHU), which stood Buddhist monks as candidates and won nine seats.

Kumaratunga needed a prime minister who could carry out a precarious balancing act: on the one hand, carrying out the UPFA’s promise to restart negotiations with the LTTE and, on the other, placating the JHU monks who are opposed to the so-called peace process. Rajapakse argued that he fitted the bill better than Kadirgamar who, as a Tamil, would automatically raise the JHU’s chauvinist hackles. Rajapakse has close connections to the Buddhist hierarchy and also a reputation as a “liberal”, advocating peace talks and maintaining connections to various Tamil and Muslim parties.

After Rajapakse was sworn in, Alle Gunawansa, a monk who heads the Sinhala extremist Patriotic National Movement, showered the new prime minister with religious blessings. But just how long Rajapakse can be all things to all people remains to be seen. He faces opposition inside his own party from the Anura Bandaranaike faction, and within the UPFA from the JVP. Prominent JVP leaders were pointedly absent from his swearing in and have publicly declined to accept posts in his cabinet, putting forward lower ranking JVP MPs instead.

Rajapakse, 58, has been in parliament continuously since 1970. He holds the southern electorate of Beliaththa, where his father was the former parliamentary representative. He has always had to contend with the JVP, which has a strong base of support in the predominantly Sinhalese south. He backed the bloody suppression of the JVP uprising in April 1971 by the SLFP-led coalition government of Sirima Bandaranaike, Kumaratunga’s mother—something the JVP has never forgotten.

Kumaratunga appointed Rajapakse as labour minister when her Peoples Alliance (PA) won office in 1994. Her aim was to exploit his relations with the “left” parties and trade unions to deal with the working class. But when Rajapakse’s ministry drafted a “workers charter” in collaboration with the unions, it ran into sharp opposition from the IMF and World Bank which were demanding the removal of any protection for workers’ jobs and conditions. Kumaratunga demoted Rajapakse to fisheries minister—a decision he accepted without protest. He became parliamentary opposition leader after the PA was defeated in December 2001.

Peace talks

The new prime minister confronts intractable political problems. After his appointment, Rajapakse held a 45-minute closed-door meeting with the Indian High Commissioner in Colombo, Nirupam Sen. While no official announcement was made, Rajapakse told reporters that Kumaratunga would supervise the peace process and that India should be involved. “We want India involved as soon as possible. I have always wanted India to play a role in Sri Lanka,” he said.

Just how the government will start talks with the LTTE, and what role India will play, is unclear. Prior to dismissing the UNF government, Kumaratunga, the SLFP and the JVP repeatedly denounced Wickremesinghe for making too many concessions to the LTTE. The parties denounced the LTTE’s proposals for an interim administration for the North and East of the island as the de facto establishment of a separate state. Kumaratunga and Rajapakse are counting on using India to pressure the LTTE to negotiate on Colombo’s terms.

For its part, the LTTE has declared the election of 22 members from its proxy party, the Tamil National Alliance (TNA), to be a vindication of its policies. A statement on April 5 affirmed: “This result delivered a message on the concept of the Tamil homeland, Tamil nationalism and reiterated that the right for Tamil self rule should be accepted as the basic aspiration of the Tamil people.” It warned Colombo: “The Tamil national problem should be politically resolved on that basis, failing which the Tamil people will fight to establish the Tamil sovereignty in their homeland on the principle of self-determination.”

Restarting peace talks is further complicated by a split that emerged in the LTTE in early March. A breakaway faction led by the LTTE’s military commander in the East, V. Muralitharan, also known as Karuna, is demanding a separate ceasefire with the government. Five TNA members are known to be loyal to Karuna, who will almost certainly use them to press for a separate seat in any peace negotiations.

Rajapakse also faces opposition from big business, which backed Wickremesinghe and the peace process as a means of transforming the island into a cheap labour platform. The peace talks with the LTTE were intimately bound up with a far reaching economic restructuring plan that generated widespread hostility as the government slashed jobs, conditions, services and subsidies.

The UPFA exploited anti-government sentiment with a series of empty promises to halt privatisation, increase wages, restore fertiliser subsidies and create 125,000 jobs within three months. Just days after the election, the new government is already under pressure to ditch these promises.

The all-share index on the Colombo stock market plummeted by 127 points, or nearly 10 percent, on Tuesday. Some brokers warned that the share market could slide by up to 25 percent this week.

The Ceylon Chamber of Commerce issued a statement after the election pointing to the ambiguities in the UPFA’s election manifesto and demanding: “Economic policy has to be very clearly outlined with regard to every aspect of the economy, whether it is open, closed or mixed.

Federation of Chambers of Commerce and Industry of Sri Lanka president Nihal Abeysekera insisted that the UPFA government had to continue the UNF’s open market policies. “There must be continuity of the policies adopted. If a complete turn around in economic policies were to be introduced, this would lead to the wastage of funds expended to bring the country to this [high growth] level,” he warned.

An editorial in the business pages of the Sunday Times on April 4 echoed these sentiments, declaring: “The private sector and donor agencies are still not entirely happy with the labor market reforms and are pressing for further liberalisation. Donor agencies are also putting pressure on the government to control spending and resist demands for further wage hikes. Now that the polls are out of the way, the new government would be better positioned to deal with such issues.”

There is no doubt that Rajapakse will fall into line with the demands of big business. Kumaratunga’s previous PA government implemented economic policies that were virtually identical to those of the UNF. Moreover, in the course of the election campaign, SLFP and JVP leaders offered assurances to corporate leaders that their interests would be guaranteed. But any attempt to implement open market measures will also provoke immediate opposition from workers, farmers and young people, who voted for the UPFA in the mistaken belief that it was a “lesser evil” than the UNF.

Even before Rajapakse forms his cabinet, he confronts a situation that is likely to lead, sooner rather than later, to a new political crisis.