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 Opposition candidate Maithripala Sirisena, a one-time ally of
Rajapaksa who defected in November and derailed what the president
thought would be an easy win, took 51.3 percent of the votes polled
in Thursday's election. Rajapaksa got 47.6 percent, according to the
Election Department.
Celebratory firecrackers were set off in the capital, Colombo, after
Rajapaksa conceded his defeat to Sirisena, who has vowed to root out
corruption and bring constitutional reforms to weaken the power of
the presidency.
Sri Lanka's stock market climbed to its highest in nearly four
years.
"We expect a life without fear," said Fathima Farhana, a 27-year-old
Muslim woman in Colombo. "I voted for him because he said he will
create equal opportunities for all," she said of Sirisena, a
soft-spoken 63-year-old from the rice-growing hinterlands of the
Indian Ocean island state.
Like Rajapaksa, Sirisena is from the majority Sinhala Buddhist
community, but he has reached out to ethnic minority Tamils and
Muslims and has the support of several small parties.
 His allies say he will rebalance the country's foreign policy, which
tilted heavily towards China in recent years as Rajapaksa fell out
with the West over human rights and allegations of war crimes
committed at the end of a drawn-out conflict with Tamil separatists
in 2009.
U.S. Secretary of State John Kerry was quick to welcome the
successful election and commended Rajapaksa for accepting the
verdict of the nation's 15 million voters.
Indian Prime Minister Narendra Modi telephoned Sirisena to
congratulate the new leader of "a close friend and neighbor".
Sri Lanka is just off India's southern coast and has historically
had mixed ties with its much larger neighbor. Rajapaksa had
cold-shouldered New Delhi in recent years but Sirisena told an
Indian newspaper this week that "we will revert to the old,
non-aligned policy".
"India is our first, main concern. But we are not against Chinese
investment either. We will maintain good relations with China too,"
he told the Hindustan Times.
Chinese Foreign Ministry spokesman Hong Lei said Beijing believed
the new government would maintain a friendly policy towards China
and support investment projects already agreed.
MOTLEY COALITION
Sirisena is expected to be sworn in at Colombo's Independence Square
at 6:00 p.m. (1230 GMT).
The results showed Rajapaksa remained popular among Sinhala
Buddhists, who account for about 70 percent of the country's 21
million people, but Sirisena earned his lead with the support of the
ethnic Tamil-dominated former war zone in the north and
Muslim-dominated areas.
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Rajapaksa won handsomely in the last election in 2010, surfing a
wave of popularity months after the defeat of the Tamil Tiger
rebels.
But critics say he had become increasingly authoritarian, with
several members of his family holding powerful positions. Although
the economy had blossomed since the end of the war, voters
complained of the high cost of living.
Rajapaksa had called this election two years early, confident that
the usually fractured opposition would fail to come up with a
credible candidate. But he did not anticipate the emergence of
Sirisena, who shared a traditional Sri Lankan dinner with him one
evening and turned on him the next day.
Sirisena will lead a motley coalition of ethnic, religious, Marxist
and center-right parties, which analysts say could hamper economic
reform and encourage populist policies.
"The opposition's coalition parties have not agreed on a common
approach to economic policy and, in our view, were mainly united by
the desire to unseat Rajapaksa," Standard and Poor's Ratings
Services said in a statement.
"Policy differences are likely to surface."
Sirisena has pledged to abolish the executive presidency that gave
Rajapaksa unprecedented power and hold a fresh parliamentary
election within 100 days.
He has also promised a crackdown on corruption, which would include
investigations into big infrastructure projects such as a $1.5
billion deal with China Communications Construction Co Ltd to build
a port city.
It is not clear if the port, to be built on land reclaimed from the
sea in Colombo, will be canceled.
However, Sirisena's backers have said a casino license given to
Australian gambling tycoon James Packer's Crown Resorts Ltd will be
withdrawn.
(Additional reporting by Ranga Sirilal in Colombo and by Megha
Rajagopalan in Beijing; Editing by Raju Gopalakrishnan and robert
Birsel)
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