Sri Lanka finds itself caught in the crosscurrents of Donald Trump’s MAGA-driven policies. With USAID funding frozen, local NGOs on the brink, and diplomatic turbulence across the Indo-Pacific, Colombo faces mounting pressure. President Anura Kumara Dissanayake’s global outreach offers hope, but can Sri Lanka withstand the economic and geopolitical storms ahead?
Sri Lanka is now facing the crosswinds of global politics as Donald Trump’s “Make America Great Again” policies reshape the Indo-Pacific and reverberate into Colombo’s economic and diplomatic strategies. In recent weeks, the country’s attempt to modernize tourism, address corruption, and navigate regional power rivalries has collided with the reality of aid freezes and strained alliances. September began with Sri Lanka Tourism endorsing an LGBTIQ tourism initiative led by rights organisation EQUAL GROUND, a project designed to position Sri Lanka as a safe, inclusive, and diverse destination for international travellers. While the move was welcomed internationally as a progressive step toward diversifying tourism markets, it drew sharp criticism at home from Archbishop of Colombo Cardinal Malcolm Ranjith, highlighting the cultural and religious tensions the country must balance as it seeks global relevance.
President Anura Kumara Dissanayake’s appearance at the UN General Assembly symbolised the new direction of Sri Lankan diplomacy. Posing for photographs alongside US President Donald Trump and First Lady Melania Trump, AKD underlined Sri Lanka’s willingness to engage with Washington while maintaining a distinct diplomatic course. On the sensitive issue of Palestine, Colombo voted in favour of recognition but refrained from joining the walkout staged by several nations when Israeli Prime Minister Netanyahu spoke. This demonstrated a nuanced strategy of balancing principle with pragmatism. Addressing the UN, AKD was forthright about the crisis in Gaza, describing it as “an open prison full of pain and suffering” even though more than 20,000 Sri Lankans currently work in Israel. His speech also connected corruption to poverty and underdevelopment, noting, “Fighting corruption is dangerous. But not fighting it presents even graver risks,” a phrase that resonated with both domestic and international audiences.
Yet while AKD struck a careful balance on the global stage, Trump’s second-term fallout began hitting Sri Lanka directly. On January 20, 2025, the Trump administration froze USAID funding, halting a wide range of development and humanitarian projects. This decision has left key organisations like Women In Need, which relies on USAID for 85 percent of its funding, at risk of collapse. Their Ratnapura Crisis Centre, which served nearly 1,000 women in 2024, may close entirely, and four emergency shelters jointly supported by the Ministry of Women and Children’s Affairs are also in danger. USAID was Sri Lanka’s single largest donor, contributing Rs. 15 billion in 2024, and supporting over 565,000 direct beneficiaries and 400 staff. Its abrupt halt has pushed hundreds of NGOs toward operational paralysis. Elon Musk, controversially appointed by Trump to dismantle USAID, alleged that millions had been wasted on “gender-neutral journalism training” in Sri Lanka, further politicising the aid freeze.
The government in Colombo has struggled to respond. Budgetary limitations and political priorities prevent it from filling the gap, and proposals from NGOs to step into critical sectors such as domestic violence support, education, and food security have been left unresolved. The loss of USAID’s technical assistance to parliamentary committees, including the Committee on Public Finance, has further weakened oversight. With US funding to UN agencies also cut, organisations like the UNDP, FAO, and UNAIDS have little capacity to compensate. The EU and Japan, traditionally strong backers of Sri Lanka, have expressed concern but have made no major pledges to replace USAID funding. Some relief has come from the private sector and diaspora groups in Canada, the UK, and Australia, who are mobilising funds for NGOs working in education, nutrition, gender-based violence, and youth empowerment. But these efforts lack national coordination and remain fragmented.
The broader geopolitical turbulence created by MAGA also places Sri Lanka in a precarious position. The sharpening of US-India relations against China leaves Colombo in a delicate balancing act, while more defined US-Pakistan ties add new layers of complexity. In this environment, Sri Lanka risks being pulled in competing directions while trying to protect its own economic recovery and sovereignty. President Dissanayake’s visits to the US and Japan reflected this balancing strategy. Addressing Sri Lankan migrants abroad, he described his first year in power as one of rebuilding and stability, claiming his government had restored confidence by strengthening the rule of law, stabilising the economy, and pushing corruption-free governance. He stressed Sri Lanka’s diversity as its greatest strength, declaring, “Our country is home to diverse ethnic and religious communities, each with its own unique culture. This diversity is one of our greatest strengths, and to move the nation forward, it is essential to foster unity among all people.”
As the aftershocks of Trump’s policies continue, Sri Lanka must grapple with a mix of lost aid, domestic reforms, and delicate diplomacy. For AKD, the path ahead is defined by whether he can shield the country from external turbulence while keeping promises at home. The coming months will likely see Colombo forced to revisit development plans, diversify funding streams, and carefully manage relations with India, China, and the US. Trump’s MAGA has placed Sri Lanka in the eye of a storm, but it has also underscored the urgency of self-reliance, transparency, and reform.
