Shehan Karunatilaka’s freewheeling debut, Chinaman, won a clutch of awards in 2010. In it, a cynical, drink-soaked narrator tries to track down a possibly dead cricketer in a Sri Lanka riven by civil war. In Karunatilaka’s new novel, The Seven Moons of Maali Almeida, the titular narrator is a war photographer, gambler and ‘slut’ who also likes a drink, while Sri Lanka still likes to shed its own blood. But while the two novels traverse similar historical terrain, The Seven Moons of Maali Almeida is far from a retreading.

The novel is narrated by Maali in the second person. ‘You’ awake in a cross between an underfunded job centre and an A&E department after an explosion. The year is 1990 and you are dead. This is the In-Between, an overcrowded state of limbo, and everyone is shouting, bleeding and lost.

Down There (the world of the living), Maali’s body has been butchered and dumped in the Beira Lake, whose putrid stench (like ‘a powerful deity has squatted over it, emptied its bowels … and forgotten to flush’) epitomises the rot of Sri Lanka itself. He doesn’t know why he’s dead or who killed him. He has only seven moons in which to discover how he died, contact his family and lead them to his tranche of secret photographs, which, he believes, have the power to transform Sri Lanka. After seven moons, the door to The Light – a sort of forgetful heaven – will be closed forever.

The difficulty for Maali is that, despite the Dante-esque division of the world into three spheres, there’s no Virgil to guide him. Instead, a chorus of voices vie for his trust. We, as readers, are as unsure of whom to believe as Maali is. Do we follow the murdered lecturer trying to steer us to The Light, or the man clad in garbage bags that ‘flap like wings … making a gesture that you cannot read’ and promising justice for your killers Down There? Can we even trust Maali himself, with his partial memories and addiction to infidelity? This celestial tussle for Maali’s soul plays out alongside a chaotic dash for his photos.

Maali’s voice is wise, weary and whip-smart, by turns self-reproaching and smug. As we read on, it becomes clear that the second-person narration has a deeper significance than was at first apparent, for this is a world in which ‘every person you see has a spirit crouching behind them’, whispering. The living mistake the whisperings for their own thoughts. As ‘you’ are spoken to by Maali’s spirit, his thoughts become yours, an effect that reaches a climax in the final pages, where Karunatilaka dissolves the remaining gap between Maali and us in an act of reincarnation.

For worlds like Karunatilaka’s to work, an author must set governing rules, so that the fantastic is not used as an easy trick to just magic away plot problems. Karunatilaka does briefly fall into this trap, with a new rule, discovered two-thirds of the way through and leading to an important plot development a few pages later, feeling overly convenient. But generally, his creation is hard won.

Of course, the most grimly absurd element of the world is not the demonology but Sri Lanka, Down There (Karunatilaka’s eschatology has no need for hell when the civil war does the job better than any devil could). Karunatilaka’s Sri Lanka is a land where executioners and lawmakers are one and the same, Tamil extremists murder Tamil moderates in an attempt to establish a Tamil state, communists ‘murder the working class while they liberate them’ and the members of the Indian peace-keeping force ‘are willing to burn villages to fulfil their mission’. We are through the looking glass, darkly.

Some critics have seen The Seven Moons of Maali Almeida as a purely dystopian satire. But this misses the hope at the book’s core. For Karunatilaka also satirises those who see the world as a flat, material place without deeper meaning. Indeed, one way of reading the novel is as a slow unfurling of a kind of faith in the enchantedness of the world and the possibility of redemption. For while ending up in the afterlife comes as something of a shock to a wise-cracking atheist like Maali (‘it appears that the sheep made the smarter bet’), over the course of the novel he relinquishes his characteristic evasiveness and selfishness and performs a sacrificial act of love, seeking to save in death ‘the friend you let down the most’ in life.

Witty, inventive and moving, Karunatilaka’s prose is gloriously free of cliché, and despite the apparent cynicism of his smart-alec narrator, this is a deeply moral book that eschews the simple moralising of so much contemporary fiction. It would be a deserving winner of the Booker Prize, for which is has been shortlisted. But as Maali Almeida knows, you don’t always get what you deserve.