Sri Lanka Looks to an Eventful 2026

Sri Lanka President Anura Kumara Dissanayake

Col R Hariharan in Sri Lanka Perspectives January 2026 highlights the trajectory of Sri Lanka's external and internal dynamics in the year ahead with prospects and challenges

Sri Lanka had weathered political, economic and climatic maelstrom in the last three years after the Aragalaya – spontaneous uprising of the people - dethroned the Rajapaksas from power in 2022.  During the last two years President Anura Kumara Dissanayake and his left-leaning National Peoples Power (NPP) government had hopefully come to terms with the harsh reality of governing with systems polluted by unhealed sores of three decades of ethnic conflict. AKD’s government has inherited the systemic aberrations of cronyism, corruption and misgovernance.

Faced with the woes of national economic bankruptcy, AKD has found it is better to “reconcile” than “renegotiate” (as NPP had promised during the run up to the election) the norms set by International Monetary Fund (IMF) for economic revival. His government led by Prime Minister Dr Harini Abeyasekara taking their baby steps at governance could hardly cope with the demands of reforming the ingrained systemic aberrations. This is being exposed every day on simple issues like introducing education reforms, appointing the police chief or advocate general with clean hands, let alone prosecuting political leaders like the Rajapaksas,

As the country marches to celebrate its 78th Independence Day next month, it will be useful for AKD and his JVP colleagues to ponder over the words of Martin Luther King Jr: “And since we knew that the system will not change the rules, we are going to have to change the system."

During the year 2026, AKD will not be able to embark upon any major systemic changes without drawing up a new constitution. He has promised to abolish the executive presidency which is not possible without systemic changes.  NPP had promised to hold the much-delayed provincial council elections in the first six months of 2026. The NPP is hardly ready for it as its grassroot support is not as widespread as other national parties.

The NPP cannot retain its new found support in North and East without showing some progress on human rights aberrations inflicted upon Tamils. Justice and National Integration Minister Harshana Nanayakkara has said investigations into more than 11,000 complaints related to missing persons will be completed within the next two years. He has clarified that though additional staff have been recruited and money allocated for their training investigations into only 5,000 complaints are expected to be concluded this year.

It is not going to be easy to abolish or amend the Prevention of Terrorism Act (PTA) as promised as vested interests within the system have misused it. Big-ticket prosecutions are pending of political leaders like Ranil Wickremesinghe and Namal Rajapaksa. They are in the cycle of prosecution. Will they be finished to show NPP holds its election promises true, before going for yet another election?

Changes in Strategic environment in Indian Ocean

The 2025 US National Security Strategy (NSS), released by the Trump administration on December 4, 2025 is likely to serves as a roadmap for the "America First" foreign policy to be followed during the year. The NSS focuses on transactional, sovereign-driven, and interventionist principles.

The NSS reshuffles the traditional hierarchy of U.S. regional focus. The Western Hemisphere now outranks the Indo‑Pacific as the primary regional focus.

China is no longer described as a long‑term strategic threat but primarily an economic problem. Russia is not portrayed as a dangerously revisionist power but as a state that “maddens Europeans” and with whom the U.S. can reach strategic stability. The document criticizes European governance, political culture, and demographic trends, using terms like “civilizational erasure.”

The 2025 NSS represents a significant break from post‑Cold War US’ strategic thinking. It narrows U.S. global ambitions and rejects the idea that permanent American global dominance and emphasizes a tighter definition of U.S. national interests. The US is likely to reduce its willingness to carry “global burdens” not directly tied to its national interests.

During the year 2026, strategic environment in Indian Ocean is likely to face the after effects of POTUS Trump is creating a huge foreign policy churn-up affecting Indo-Pacific theatre. As a result, a reset in US relations with India, Japan and the European Union is likely during the year.

The NSS introduces flexible realism—a pragmatic approach that prioritizes issues most relevant to U.S. national interest. It moves away from comprehensive, all‑encompassing strategies and allows unilateral action when necessary. This marks a departure from earlier NSS documents that attempted to cover every region and issue.

The NSS has serious geopolitical implications for countries in India and its Indian Ocean neighbours (as a part of Indo Pacific theatre). For instance, in 2017, US considered India a “major defence partner” and counterweight to China. In 2022, in US eyes India became central to Indo‑Pacific, Quad, technical and supply‑chain diversification. In 2025, US considered India still useful as a balancing partner with more U.S transactional ‘bandwidth’.

It implies more room for strategic autonomy for India as there will be less U.S. ideological pressure on democracy or human rights and more space for issue‑based alignment. But if Western Hemisphere and domestic issues dominate, India cannot assume to have sustained U.S. attention in every Indo‑Pacific contingency. We can expect more emphasis on trade, supply chains, critical minerals and less on expansive security guarantees.

Similarly, the NSS speaks of US policy change towards China from systemic rival and challenge (2022) to economic competitor and problem creator (2025). It implies lower ideological Cold War, higher focus on US tariffs, industrial policy and tech controls. Military competition will persist, but with less rhetoric about “democracy vs autocracy.” This provides the US more space for deals with China on trade, fentanyl, limited crisis management if they serve U.S. domestic economic narratives.

India’s strategic response to the “America First 2.0” posture in the NSS may be described as pragmatic multi‑alignment. It aims to deepen cooperation where interests converge, hedge where U.S. retrenchment creates uncertainty and expand autonomous capabilities to avoid being caught in Trump’s transactional approach. Already, India’s relations with China appears to have softened. India has announced PM Narendra Modi will be attending the 14th BRICS summit hosted by China in virtual format on June 23-24, 2026. This includes a High-Level Dialogue on Global Development with guest countries on June 24. We can expect both India and China to explain their multifaceted strategic response to changes in their strategic environment.   

Sri Lanka, a close strategic ally of India with important trading connections with China is likely under stress till the US policy fallout to island nations in Indian Ocean becomes clear during 2026. During the month, China’s foreign minister Wang Yi stopped over in Colombo during which he met the Sri Lanka PM. He did not call upon the President perhaps because he wanted to avoid embarrassing questions on the shake up in the Central Military Commission in China which going on since October 2025. Internal developments that follow in CMC is likely to keep President Xi Jinping busy for a few months in 2026.

Overall, we can expect President Dissanayake to be kept busy during 2026 with both internal and external developments in his strategic environment. AKD will have to keep his ear to the gear wheel if he want to deliver the changes he promised.

Obituary

The month saw the passing of two veteran columnists on Sri Lanka – one Indian and another Sri Lankan. Iqbal Athas, investigative journalist of Sri Lanka passed away on January 13 at the age of 81. He was known for his fearless investigations on defence and political affairs, published in his "Situation Report" column for The Sunday Times. He gained international attention when he exposed major irregularities in the purchase of four second-hand fighter aircraft from Ukraine in 2006.The other - N. Sathiya Moorthy, veteran Indian journalist and policy analyst specializing in Sri Lanka and the Maldives, was my friend. He passed away on January 15, 2026, in Chennai at the age of 71. He was widely respected for his in-depth analysis of South Asian politics, particularly the internal dynamics of Sri Lankan and Maldivian affairs and their implications for India.

[Col R Hariharan VSM, a retired MI specialist on South Asia and terrorism, served as the head of intelligence of the Indian Peace Keeping Force in Sri Lanka 1987-90. He is associated with the Chennai Centre for China Studies. Blog site: https://col.hariharan.net  Email: haridirect@gmail.com,]