Sri Lanka Announces Major Cut to Armed Forces

Confronted with a severe financial crisis, the government of Sri Lanka has announced plans to slash its armed forces over the course of the year in an effort to get a handle on public expenditures.

According to the Ministry of Defense, the move will see the Sri Lankan Army shrink to 135,000 next year from its current total of around 180,000. It will then fall further down to 100,000 by 2030.

The step comes as the island nation confronts its worst economic situation since it achieved independence in 1948. After defaulting on foreign debt repayments last year, the country encountered shortages of food, fuel, and medicines, with the public forced to confront long queues for everyday goods while saddled with high inflation and rolling blackouts.

Public outcry at the situation resulted in widespread anti-government protests, the storming of the presidential palace, and the resignation of the country’s president, Gotabaya Rajapaksa, whose family had wielded influence over Sri Lanka’s politics for close to two decades.

After Rajapaksa fled the country and appointed the prime minister, Ranil Wickremesinghe, to succeed him, the government declared a state of emergency. The new president has appealed to the International Monetary Fund (IMF) for a $2.9 billion bailout and must restructure Sri Lanka’s finances to unlock this much-needed funding. He is also in bilateral talks with lenders such as China and India about restructuring the country’s debt, which runs over $50 billion.

Cutting spending is first on the list of priorities for the government. The Wickremesinghe cabinet announced on January 17 that it will slash recurring expenditures by 6 percent this year and freeze public sector salaries.

One of the key places the government states it will look at is defense, as the military budget and bloated armed forces present an obvious place to begin.

Having emerged victorious from a 26-year civil war against the insurgent Liberation Tigers of Tamil Eelam (more commonly referred to as the Tamil Tigers) in May 2009, Sri Lanka has faced questions over what to do with its enlarged military, which also exerts undue influence within the civilian economy. The long-standing aim has been the slow demobilization of the manpower-heavy Army, coupled with an effort to re-equip the military with more modern and standardized equipment.

But in reality, little progress has been made.

The defense budget remains higher than during the height of the civil war, even when adjusted for inflation.

At some 255,000 personnel, the armed forces are among the world’s largest on a relative basis (though down from the 400,000 that they numbered during the civil war).

The combined defense and public security budget – proposed at LKR539 billion ($1.5 billion) for 2023 – is set to account for 9.3 percent of total government expenditure (down from 10.5 percent in 2018 and 10.1 percent in 2021). By contrast, the portions of funding allocated to health and education in the 2023 government budget amount to roughly LKR300 billion ($816 million) apiece.

Therefore, the military makes for a meaty target to reduce cost overhead and find efficiencies.

But past promises to streamline the armed forces and use savings to upgrade capabilities have amounted to little. Skeptics are many where government promises to reduce the military are concerned, particularly since cutting the force size will mean displacing younger soldiers and putting them on the unemployment line.

With just 6-7 percent of annual military budgets spent on capitalization, any meaningful reduction to Sri Lankan defense will only come from reducing personnel and salaries, even if it means merely shifting troops from full-time to reservist status.

How far the government truly intends to go during a time of political and economic upheaval and public discontent remains to be seen. As with all government promises, the key will be actions and not words.

About Daniel Darling

Dan Darling is Forecast International’s director of military and defense markets. In this role, Dan oversees a team of analysts tasked with covering everything from budgeting to weapons systems to defense electronics and military aerospace. Additionally, for over 17 years Dan has, at various times, authored the International Military Markets reports for Europe, Eurasia, the Middle East and the Asia-Pacific region. Dan's work has been cited in Defense News, Real Clear Defense, Asian Military Review, Al Jazeera, and Financial Express, among others, and he has also contributed commentary to The Diplomat, The National Interest and World Politics Review. He has been quoted in Arabian Business, the Financial Times, Flight International, The New York Times, Bloomberg and National Defense Magazine. In addition, Dan has made guest appearances on the online radio show Midrats and on The Media Line, as well as The Red Line Podcast, plus media appearances on France 24 and World Is One News (WION).

View all posts by Daniel Darling →