Sri Lanka's President Maithripala Sirisena emerges from a meeting naming him leader of the New Democratic Front party. Colombo, Sri Lanka, January 16, 2015. (Ishara S. Kodikara/AFP/Getty Images)

Sri Lanka's President Maithripala Sirisena emerges from a meeting naming him leader of the New Democratic Front party. Colombo, Sri Lanka, January 16, 2015. (Ishara S. Kodikara/AFP/Getty Images)

Six years after Sri Lanka’s bloody civil conflict ended and a few months into the presidency of Maithripala Sirisena, this small island state in the Indian Ocean has entered a complex, transformative era. In four months, Sirisena has met Chinese President Xi Jinping, Indian President Narendra Modi, and United States Secretary of State John Kerry. India and China, and to a lesser extent Japan and the US, are competing for influence and economic opportunities in the country.

Domestically, the new government is focusing on reforms to decentralize power, curb corruption and economic inefficiencies, and deliver more equal growth. At the same time, it needs to manage external (mainly Western) pressures to cooperate with the United Nations’ investigation into wartime atrocities, seeking to balance justice with stability, and reconciliation with nationalistic instincts.

Both great opportunities and risks lie ahead. Success rests on the ability of Sirisena and his successors to balance the inevitable differences and trade-offs that define multi-ethnic societies. It will also depend on the capacity to play the new “Great Game” of Asia, in which China, India, Japan, and the US will compete for influence and economic opportunities.

These challenges are shared by many small- and middle-power countries in Asia, which struggle to balance the need for societal adaptation and risks of instability on one hand, and managing relations with old and new powers on the other. Read more