Sri Lanka has announced plans to halve its military by 2030 as part of efforts to cut costs in light of the country’s current financial crisis, a move experts say could result in better long-term security “if done the right way”. State minister of defence Premitha Bandara Thennakoon said the proposals to help downsize the army post-war would reduce the number of approved military personnel from 200,783 to 135,000 by 2024, and projected to be further reduced to 100,000 by 2030. The army was also expected to undergo “technological modernisation”. The country has been struggling with depleting foreign currency reserves and staggering external government debt of US$37.6 billion, leading to skyrocketing food prices and severe shortages in fuel and medicine. Its year-on-year food inflation in December was at 64.4 per cent, while inflation pegged at 57.2 per cent. During the 2023 budget speech in November last year, President Ranil Wickremesinghe proposed reforming the country’s bloated public sector of about 1.45 million employees to reduce government spending on salaries, which is estimated to reach LKR 701.9 billion by 2023. Military salaries take up about 37 per cent of the wage expenditure. Army spokesman Brigadier Ravi Herath said, however, that downsizing the military would not be done “haphazardly”. “It will be done through restrictions in recruitment, and through natural retirement, when soldiers and officers [reach] maximum service length”, he told This Week in Asia, adding that this would help minimise any issues arising from unemployment like crime and avoid causing another “social problem”. Experts welcomed the downsizing move, saying that reduced expenditure on wages would bring about more economic stability and help Sri Lanka focus on getting out of its financial crisis “as soon as possible”. With Sri Lanka mired in debt, its greatest external security concern is its “tremendous dependence” on countries such as India and China, according to Daniel Alphonsus, former adviser to the Sri Lankan ministry of finance. “We can see this in relation to the fuel crisis,” he said, referring to the country’s dependency on multiple credit lines from India to buy fuel last year. Colombo is working on negotiating a US$2.9 billion loan package with the International Monetary Fund (IMF), but unlocking IMF board approval for the bailout still requires the backing of its key bilateral creditors China and India. New Delhi has said it would back Sri Lanka’s debt-restructuring plans, while China’s Exim Bank has reportedly offered Colombo a two-year moratorium on debts. Alphonsus called on Sri Lanka to build a “strong, export-oriented, competitive economy” within a robust governance framework, so that the country could then consider investing in security equipment such as surface-to-air missiles. “A lower wage and upkeep bill will help ensure that the government can prioritise welfare, stabilisation, recovery and growth,” he said, adding that former military personnel could contribute to the economy by entering other industries through the labour market. Sri Lanka’s defence budget between 2009 and 2017 was 2.4 per cent of the country’s gross domestic product, according to a study conducted by Alphonsus that was published in 2021. Sri Lanka’s new budget: good enough for the IMF, but what about the people? With the potential downsizing, more focus on foreign affairs and a boost in technology can also play an important role in maintaining security, observers note. “There is a huge mismatch between [Sri Lanka’s] expenditure on diplomacy versus the military. The defence budget is generally over 20 times the size of the foreign ministry budget,” Alphonsus said, noting that diplomacy was an area that did not receive adequate attention and that “the quality of [Sri Lanka’s] diplomats is poor”. Alphonsus said Sri Lanka’s only “existential risk” was the prospect of Indian aggression, and Sri Lanka being short of diplomats had “real security costs” in this context as Colombo lacked the ability to understand, much less shape, Indian policy. Sri Lanka also did not have adequate diplomatic representation in key Indian states and elsewhere including in Washington, New York and Beijing, he added. “Real wages have fallen by 92 per cent since Sri Lanka’s independence. Therefore, there are clearly significant efficiencies to be gained by reallocating resources away from defence to diplomacy.” The estimated 2023 budget for the ministry of defence is LKR 410 billion, compared to LKR 19 billion for the foreign ministry. With the “next level of warfare … coming from the cyber front or from extreme religious elements”, strong intelligence gathering and sophisticated surveillance equipment will be necessary, according to Indika Perera, a lawyer and visiting lecturer at the General Sir John Kotelawala Defence University in Colombo. Advances in technology would also reduce the need for large armed forces with limited modern equipment and training, said Major General (ret) Mats Engman, a military expert at Europe-based consultancy IndependentViews. Perera, however, cautioned that downsizing would have to be conducted strategically. Budget estimates for 2023 showed that the bulk of government defence spending was on salaries rather than on buying equipment, and any reduction could have economic implications for vulnerable households that depend on family members getting military jobs. Pensions would still need to be paid out even after officers retire, which might negate any meaningful reductions in expenditure, he added. Engman echoed the sentiment, adding that rebuilding the military after a downsizing exercise was often a long and difficult process. “Training takes time, building infrastructure takes time and buying new equipment takes a very long time,” he said.