In a campaign speech in rural Sri Lanka, Ranil Wickremesinghe, the new prime minister of Sri Lanka, said: "We established good governance in 100 days; we can produce a new country in 60 months". The accent was on "new country" and "60 months". For all practical purposes, Sri Lanka is already a new country, having made the transition in 2009 under Mahinda Rajapaksa when Velupillai Prabhakaran and the entire leadership of the Liberation Tigers of Tamil Eelam (LTTE) were wiped out in a military operation. LTTE was the most dreaded guerrilla force in the world: there are few that can claim the dubious distinction of having assassinated the premiers of two nations, apart from killings hundreds of thousands of innocent civilians. After 30 years, Eelam continues to be a distant dream with the Sri Lankan state reluctant even to grant police powers to north and east Sri Lanka. The war has created a deep divide in Sri Lankan society and also deep fatigue. Closure is slow in coming. So in a way the general election that brought Wickremesinghe to power was about taking the first step towards closure. This was reflected in the result in the north and east. What is important is not whom the people voted for but whom they did NOT vote for. In Jaffna, the cultural and notional heart of the Tamil homeland, for instance, the Tamil National Alliance, contesting as the Ilankai Thamil Arasu Katchi, got 69 per cent of the vote. The Tamil National People's Front failed to win a single seat in Jaffna. Though strongly supported by LTTE and pro-LTTE elements in the Tamil diaspora, it polled only 5 per cent votes. Former LTTE members contesting as independents also fared badly, polling only 0.66 per cent votes. Equally strong was the rejection of the Sinhala hardliners. The Bodu Bala Sena and the Bodu Jana Peramuna got zero seats. The party led by the former chief of army staff, Field Marshal Sarath Fonseka, also failed to get a single seat. It was Fonseka who led and won the war in the north. In other words, Sri Lanka said 'no' resoundingly to extremism of all sorts. The Rajapaksa factor The attitude of the voters to Mahinda Rajapaksa who with his clan ruled Sri Lanka for ten years (2005-2015) was somewhat ambivalent. The United National Party led by Wickremesinghe got 45 per cent of the vote. Rajapaksa's United People's Freedom Alliance got 43 per cent. In other words, it was by no means a blanket rejection of Rajapaksa - he is very much in the game. The Lankan people also told everybody who wanted to listen that words like 'kleptocracy', used to describe corruption by the clan, had no meaning for them: when Rajapaksa filed his nomination papers from Kurunegala, all the members of his family out of jail - his son Namal, elder brother Chamal, other brother Gotabhaya - were all by his side. In other words, Rajapaksa was telling voters his family was his family and would continue to stand by him. So what has Sri Lanka voted for? For one thing, free market policies. While Wickremesinghe is not against giveaways, he knows that Sri Lanka faces serious economic challenges.
Some of them are a legacy of the previous regime, while others are in the future. Rajapaksa got a pro-China image because of a series of contracts given to Chinese investors for infrastructure. Topping the list was the $1.5-billion contract given to a Chinese company to build the 570-acre Colombo Port City on reclaimed land. Who should have sovereign rights on this land - Sri Lanka or China? This became a raging question in the run up to the presidential elections held in January 2015. Sensing the public mood, Wickremesinghe vowed to cancel the contract if he came to power - but when he became interim prime minister, he put it on hold rather than cancelling it altogether. Now that he has been elected, how he will deal with it remains to be seen. Wickremesinghe has not shut the door on Chinese investment completely - he cannot. He recently announced that the government was in talks to invite Chinese investment in a port project in Hambantota. But China is now conscious that it can no longer take Sri Lanka for granted when it comes to investment: and Lanka will need a lot of it, especially when the north and east are developed. And the north and east are crucial for Wickremesinghe. Although he did not oppose the military campaign, Tamil and Muslim minorities in the north and east are politically more receptive of him and contributed in no small measure to his victory in the current elections. All for growth In return, Wickremesinghe has pledged to launch massive infrastructure development of this area - an economic opportunity that is being eyed by India and China alike. Of the 45 economic development zones promised in the election manifesto, Wickremesinghe has promised many will be located in the north and east. He has also said German investors, including Volkswagen, have promised to build a car manufacturing plant in one of the economic zones and develop other manufacturing facilities. In Sri Lanka, the services sector accounts for 58 per cent of the gross domestic product (GDP). But in terms of employment, agriculture and tourism is the mainstay. These two sectors will be the focus of the new administration. Tax breaks for real estate development, especially hotel and resort, are likely. Until 2014, Sri Lanka used to levy 100 per cent tax on foreign real estate transactions. This may be diluted now. The Generalised Scheme of Preferences (GSP) Plus agreement extended by the European Union (EU) in 2008 was withdrawn in 2010 after the Rajapaksa government failed to comply with EU norms on human rights, governance, environment and labour laws. Wickremesinghe has promised to restore GSP Plus by December 2015, assuring that negotiations are in an advanced stage. But the new government also faces significant challenges, mainly from debt-servicing obligations. Central Bank of Sri Lanka data released in February showed Sri Lanka's foreign debt servicing commitments in the 12-month ending 31 December 2015 was higher than its foreign currency reserves. Chinese lenders account for more than 70 per cent of this debt, which was contracted at cheaper interest rates but higher 'fees'.