Editorial
Nightmare unfolding
A new year has dawned, and a nightmare is unfolding for the public. It is a case of the people’s worst fears being realised. The implementation of the enhanced VAT (Value Added Tax) regime has had the same effect as a dam burst, in a manner of speaking. People are struggling to keep their heads above water. Traders have jacked up prices according to their whims and fancies. They are guided by Rafferty’s rules, as usual. Regulators seem fast asleep maybe due to the end-of-year hangover, or they do not give a tinker’s cuss about the exploitation of the hapless consumers.
It is being argued in some quarters that the government has increased VAT against its will, in this election year, because it was under pressure from the IMF to do so. But what the IMF asked the government to do was to increase state revenue––a goal that could have been achieved by other means. The current dispensation should have curtailed its wasteful expenditure and taken action to eliminate corruption, which deprives the state coffers of billions of rupees a year, besides standing in the way of foreign investment. A rupee saved is said to be a rupee earned. The government has allocated more than Rs. 11 billion purportedly for development work at the district level in view of elections, and the Opposition says only the ruling party MPs will benefit from the fund allocation at issue. This, the government has done, while claiming to be unable to allocate about Rs. 10 billion for conducting the local government elections! The ruling party politicians’ foreign junkets must also be costing Citizen Perera an arm and a leg. Most of all, the government has not made any serious effort to create a sustainable and equitable tax system by expanding the personal tax base, among other things; it has resorted to jacking up PAYE tax and VAT, instead.
There is reason to believe that the government has dared increase VAT in an election year because it thinks its leaders can take voters for a ride once again by wrapping themselves in the flag and bellowing ethnocentric rhetoric.
Private bus operators began their campaign for a fare hike weeks ago. Now that the government has increased VAT, let it be urged to do the math at least where the bus fares are concerned, and foil the private bus operators’ attempt to effect a massive fare hike on the basis of the increase in the price of diesel due to the VAT hike.
It may be recalled that the private bus operators audaciously refused to bring down fares despite a 27-rupee decrease in the price of diesel on 30 Nov., 2023. We pointed out the absurdity of their position in an editorial comment on 05 December 2023. We argued that if the bus operators considered a 27-rupee price decrease insufficient for them to consider a fare reduction, it logically followed from their contention that they would not have asked for an upward fare revision if the diesel price had been increased by Rs. 27 from Rs. 356 (being the price as at 30 Nov.) to Rs. 383. Therefore, we pointed out that a fare hike must not be granted even if the diesel price reached Rs. 383 in the future. The latest VAT increase has caused the price of regular diesel (which was Rs. 329 at 31 Dec., 2023) to increase by Rs. 29 to Rs. 358, which is only two rupees higher than the diesel price (Rs. 356) on 30 Nov., when the bus operators refused to decrease fares. If the VAT hike has led to any increases in spares, etc., that issue has to be handled separately. The bus mudalalis must not be allowed to have the best of both worlds where fuel price fluctuations are concerned. But, unfortunately, given the government politicians’ enormous appetite for bungs, bus operators and other such elements bent on fleecing the public usually have the last laugh.
The incumbent SLPP-UNP regime has earned several epithets, most of which are not so complimentary. But in our book, nothing suits it more than ‘VAT 69’. Obviously, not that it has enabled the people to lead the so-called whiskey lifestyle; it can be called as such because it depends solely on VAT (Value Added Tax) for survival, having come to power by duping 69 lakh voters.
Editorial
Polluted TUs
Political propaganda is double-edged. Hence the need to handle it carefully lest it should backfire. One may recall that before the 2019 presidential election, a prominent Buddhist monk blundered by asking SLPP candidate Gotabaya Rajapaksa to act like Hitler. The then Opposition made Gotabaya out to be Hitler incarnate thereafter. JVP/NPP stalwart Lal Kantha, addressing a campaign rally in the run-up to the September presidential election, pledged to vest villagers with some judicial powers. The opponents of the JVP/NPP raised hell, claiming that the JVP was planning to reintroduce kangaroo trials. President Anura Kumara Dissanayake has drawn heavy flak for asking the people to get rid of the Opposition and elect 225 NPP MPs in the upcoming general election. Besides, in a bid to discredit the government, the Opposition is now using a rhetorical statement made by Lakshman Nipuna Arachchi, an NPP candidate in the current parliamentary election fray, about trade unions. Addressing an election rally, Nipuna Arachchi said the other day that trade unions had become redundant as the NPP government was now looking after the interests of the working class; there was no need for labour struggles, and the NPP should consider disbanding the trade unions affiliated to it.
The Opposition parties have given a twist to Nipuna Arachchi’s statement to suit their own narratives and agendas. Some of them have claimed the NPP has issued a not-so-veiled threat to Sri Lanka’s trade union movement.
Nipuna Arachchi’s statement boils down to mere campaign rhetoric. Those who are out of power usually see more devils than vast hell can hold and cry wolf at the drop of a hat. That is the name of the game in Sri Lankan politics.
The JVP-led NPP has however brought to light, albeit unwittingly, an important issue that has gone unaddressed all these years—the over-politicisation of trade unions, which have been reduced to mere appendages of political parties as a result.
Political spectacles that pass for May Day rallies in this country are cringeworthy. Workers carry politicians on their shoulders, making a public display of their servility. In fact, May Day rallies have become political dog-and-pony shows.
Trade unions with political agendas do not hesitate to subjugate the interests of workers and the country to their parties’ agendas. There are a handful of independent unions, but they are the exception that proves the rule. Thus, one may argue that the JVP/NPP should seriously consider disbanding its trade union wing forthwith, as Nipuna Arachchi has suggested. Other political parties with trade union arms ought to follow suit.
Much is being spoken these days about the need to bring about a new political culture. There is also a need for a new trade union culture, which is a prerequisite for serving the interests of workers and achieving economic development. Sri Lanka lacks a work ethic, without which national productivity cannot be increased to achieve economic progress. Most trade unions only make demands and never do they concentrate on their members’ duties and responsibilities. They are also responsible for having rendered the state sector inefficient and unproductive. A stock of biometric attendance marking devices procured by the Health Ministry at a cost of Rs. 30 million remains unused due to trade union resistance, we are told. The health sector has therefore become notorious for overtime rackets. This is how trade union power is abused. Most labour unions in the private sector are no better.
Sri Lankan trade unions ought to learn from their counterparts in other countries, such as Japan, how to act responsibly and help the country achieve progress while protecting labour rights. That said, the blame for the sorry state of affairs in this country should be apportioned to successive governments and most private sector employers. The only way workers can have themselves heard and their grievances redressed, in most cases, is to protest or down tools, and the trade union arms of political parties make the most of this situation.
Sri Lanka has set for itself ambitious economic goals and debt repayment targets. None of them may be attainable unless national productivity is enhanced substantially with employees, employers, trade unions and politicians putting their shoulders to the wheel. This task requires healthy relations and cooperation among key stakeholders. Hence the pressing need for a radical rethink of trade unionism in this country.
Editorial
Tuk-tuk tut-tutting and ground reality
Monday 4th November, 2024
Many are those who are tut-tutting over the latest fuel price revision, which has not brought any relief to the general public; trishaw drivers, who served as the JVP-led NPP’s grassroots propaganda foot soldiers, as it were, are prominent among them. Quite a few of them are openly critical of the NPP government.
Securing popular mandates in elections is one thing, but delivering what they are obtained for is quite another. Sri Lankan voters are a fastidious lot known for their impatience to have election pledges fulfilled. So, it is only natural that the NPP government has come under fire for its inability to sort out a host of issues such as unconscionably high prices of commodities, especially rice, coconuts, milk food, eggs and fuel.
The NPP leaders, who came to power, promising to break the back of the escalating cost of living immediately, are now expected to make good on their pledge. They also offered to slash petroleum prices by reducing taxes and eliminating corruption, but fuel prices were reduced only marginally last month. The latest fuel price revision has irked the ordinary people using regular petrol and diesel, whose prices have remained unchanged. Only the prices of 95 Octane petrol and Super Diesel have been brought down, and the government stands accused of having sought to serve the interests of the rich at the expense of the poor.
President Anura Kumara Dissanayake and his interim government are caught in a nutcracker, in a manner of speaking. On the one hand, they have to abide by the IMF dictates to keep the bailout programme on track, and on the other, they are under severe pressure from the public as well as the Opposition to grant promised relief forthwith.
The IMF has said in no uncertain terms that general government revenues must be in the region of 15 percent of GDP in 2025. So, it will be well-nigh impossible for the government to reduce taxes to slash fuel prices, and at the same time it cannot convince the public of this economic reality; they are in no mood to reason.
The NPP says it will win the upcoming general election. If it achieves its dream, it is likely to find itself in a more unenviable situation, for it has pledged to grant pay hikes from Budget 2025 and increase welfare expenditure substantially; it has said it needs a parliamentary majority to deliver the promised relief. But whether it will be able to allocate adequate funds for that purpose within the fiscal confines stipulated by the IMF is the question.
The IMF has urged Japan, an economic powerhouse, to fund additional spending plans for relief programmes within its budget without issuing more debt. This has been the IMF’s reaction to the Japanese government’s promise to introduce a sizeable spending package to mitigate the adverse impact of rising costs on the public. “Any kind of support you are providing should be a lot more targeted, and any kind of new initiative should be financed within the budget … You should not be increasing more debt to provide for any new initiative,” Krishna Srinivasan, IMF Director for Asia and Pacific has told Japan, according to Reuters. This shows how difficult it will be for the next government of Sri Lanka, dependent on IMF assistance, to increase welfare expenditure.
Whenever a self-proclaimed messiah elevated to power fail in this country, those who have voted for him or her try to overcome their sense of guilt and vent their frustration by swinging en masse to another political camp, and when they react in this manner waves of popular support form in the polity and crafty politicians ride them. The NPP has benefited from such a wave, and, now, the biggest challenge before it is to prevent its political and electoral gains from being reversed by a counterwave of public anger.
Gotabaya Rajapaksa and the SLPP also rode a massive wave of popular support to power in 2019, but faced a backlash soon afterwards. Most trishaw operators threw their weight behind Gotabaya in the 2019 presidential race, but when he became a metaphor for failure, after being ensconced in power, they dissociated themselves from him, and some of them went to the extent of displaying on their tuk-tuks a catchy slogan, which read in Sinhala, “Sajith peradichcha eka hondai, neththam api thama hithan inne Gota veddek kiyala”—‘it is good that Sajith lost [in the 2019 presidential contest], otherwise we would still have been under the impression that Gota was a maven’. Whether the NPP, in case of its victory in the upcoming parliamentary race, will be able to prevent the aforesaid slogan reappearing on trishaws, with ‘Gota’ replaced with ‘Anura’, remains to be seen.
Editorial
Elections in the U.S. and SL
On Tuesday, Nov. 5, Americans will vote for a new president at an election that most observers and commentators agree is destined to be as consequential, if not even more so, as only two other elections in the chequered history of the United States of America. Americans will either choose to continue with the Great Experiment of democracy envisaged by the Founding Fathers over two centuries ago; or they will change course and adopt an authoritarian government on the model of other authoritarian nations in the world, like Russia.
The U.S. constitution decrees that a presidential election be held once every four years on the first Tuesday following a Monday in November. This is to ensure that the Polling Day does not interfere with Sunday worship and also that it does not fall on Nov. 1, also for a religious reason. Unfortunately, Sri Lanka has no ironclad date for holding elections, both presidential and parliamentary, and incumbents have considerable flexibility of when elections will be called. This is often used for their own advantage.
We in Sri Lanka will vote on Nov. 14 to elect our 17th Parliament which will convene on Nov. 21, completing two national elections to choose an executive president and a new parliament within a few weeks of each other. We voted in a new president as recently as Sept. 21. President Anura Kumara Dissanayake had during his campaign pledged that his first executive action, if elected, would be to dissolve the then parliament. This, of course was a sine qua non – an essential or indispensable requirement – as the NPP/JVP had only three seats in the last parliament and is now governing the country with the world’s smallest cabinet of just three ministers.
It is unlikely that the result of the U.S. election will influence voters here. There has been little or no mention of that subject in ongoing campaign rhetoric although the U.S. election has been extensively reported and commented upon both here and the world-over. Most Lankans, we believe, are convinced that the election of Donald Trump in what appears to be a very tight race in the “swing states,” would be an unmitigated disaster not only for America but also the wider world. There have been five examples – two recently – at U.S. presidential elections where the winner literally lost. The recent examples are 2000 when Al Gore won the popular vote and lost to George. W. Bush in the Electoral College. Then in 2016 Hillary Clinton who won the popular vote lost to Trump..
The 2024 U.S. election is being fought on a variety of issues, with immigration and reproductive freedom taking center stage. The economy used to be a major issue, but recent reports of a vast improvement in the economy consequent to the policies of the Biden administration – Bidenomics – has had the effect of a dramatic reduction in inflation, which now stands at 2.2%, down from 9% in 2022. Glowing reports about the continuing success of the economy, which The Economist recently headlined as “The envy of the world” has largely silenced Republican critics. As has the prediction of a majority of economists that Trump’s nebulous economic plan, based mainly on increased tariffs on imports, will result in higher prices and recession.
Convicted felon Trump keeps hammering on about the catastrophe of an open Southern border, with gross exaggerations about criminals, murderers, rapists and people who bring drugs, crossing the border in their millions – “vermin who are poisoning the blood of the people”. He is creating hatred and fear of immigrants in a land of immigrants, continuing a strategy which won him the presidency in 2016.
However, the overturning of Roe v. Wade by the Republican backed US Supreme Court, will likely play a major role in the final outcome of the election. Women’s reproductive rights had been guaranteed by the Supreme Court judgment of Roe v. Wade, since 1973. The Court had ruled that that abortion was a decision to be made by the pregnant woman, her physician, her parents (in the case of a minor) and her God. After 50 years, Donald Trump appointed, three decisively pro-life judges to the Supreme Court, which now has a 6/3 Republican majority, which overturned Roe v. Wade in 2022, ending the constitutional right to abortion.
Women, Democrats, Republicans and Independents, form the majority (52%) of the electorate. They are overwhelmingly in favor of the re-instatement of Roe v. Wade. Vice-President Harris as vowed to sign this into law as one of her first actions on election as president. The fact that women usually exercise their right to vote in greater numbers than men may just swing an extremely close, most consequential election in favor of Vice-President Harris and the Democrats.
Here in Sri Lanka we have President AKD calling on the electorate to give the NPP/JVP a parliamentary majority to ensure smooth government with a single party controlling both the presidency and the legislature. He wants the voter who crowned him executive president to do a “satyagraha” to give him the parliamentary majority as well. Sajith Premadasa seeks the majority pledging to work with the president on everything good it attempts while Ranil Wickremesinghe lectures that politicians with experience must be elected MPs. He is eloquently silent on why he, the country’s most experienced politician, does not offer himself for election. He has even ruled out a National List entry to parliament for himself like he did in 2020 when the UNP won zero seats and scraped a single National List slot. But he eventually took that place after months of foot dragging. The rest is history.
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