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Editorial

A sad day

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Wednesday 13th April, 2022

Sri Lanka has had to suspend foreign debt payments for the first time. It is a sad day for every Sri Lankan. This measure has become unavoidable for two reasons. The country has to prevent a hard default; foreign debt payment due this year is reportedly about USD 4 billion including a USD 1 billion international sovereign bond maturing in July. It badly needs dollars for essential imports which are in short supply much to the consternation of the people, who have taken to the streets demanding relief and the ouster of the government. Political stability is essential for economic recovery, and vice versa. The country is thus in a catch-22 situation. It has come under a pall of political uncertainty, which has stood in the way of measures being adopted to save the economy. People’s economic hardships act as jet fuel for social unrest, which hinders economic recovery.

The need for debt restructuring cannot be overstated; but that task requires the consent of creditors, who will ask for a cast iron guarantee that their investments are safe and they will get returns thereon. It is doubtful whether the current political turmoil will help win their confidence.

It is hoped that when more forex is available for imports, and supplies are replenished, long queues will disappear—hopefully—making it possible for tension on the political front to be defused.

Newly appointed Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe has assured that the drastic measure at issue is only temporary, and the country will reach an agreement with the creditors concerned. One can only hope that the government pundits will allow the three men—the CB Governor, new Finance Minister Ali Sabry and new Finance Ministry Secretary Mahinda Siriwardana—and their teams of experts do what they deem necessary to tackle the economic crisis.

Needless to say, political upheavals drive away foreign investors and tourists and cost the country a great deal of much-needed foreign exchange. They also affect national productivity, which is a prerequisite for economic development. Neither the protesters nor the government politicians are willing to soften their stands. Both sides remain intransigent, making the country’s economic recovery an uphill task.

Protesters want the entire government to resign, and the latter is apparently playing a waiting game—maybe on the advice of its astrologers including Gnanakka—in the hope that protests will fizzle out with the passage of time, and its leaders will be able to crawl out of the woodwork and do more of what they have been doing.

The government does not seem to have realised the gravity of the situation. Both President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa said very little in so many words when they addressed the nation. The PM did not say anything new on Monday; he only repeated himself, and was seen to be making an effort to justify his decision to stay put amidst calls for his resignation.

Prime Minister Rajapaksa should have apologised to the nation, on Monday, for having wasted billions of dollars on Ozymandian projects like the Hambantota Harbour, the Suriyawewa cricket stadium, the Mattala Airport and the Lotus Tower. All Rajapaksa governments have been characterised by rampant corruption, which has led to an increase in national debt. The PM should also have explained to the public why the current administration had not sought IMF assistance at the first signs of trouble, the way his government had done in 2009 to avert an economic disaster.

The CBSL says it warned of the present crisis a long time ago but the government did not heed its warning. The yahapalana government ignored a warning by a foreign intelligence service of the Easter Sunday attacks, and more than 270 lives were lost, as a result. The present administration’s refusal to take on board the CBSL’s advice has turned the country into a hellhole, as it were, for 22 million people who have been left without essentials.

The government is struggling for survival, and let Parliament be urged to initiate action to abolish the 20th Amendment and reduce the executive powers of the President so that an interim arrangement could be worked out to facilitate the country’s economic recovery.

We wish our readers a happy New Year!



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Editorial

Where are workers?

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Wednesday 1st May, 2024

Another International Workers’ Day has dawned. Grand preparations have been made in this country to celebrate it amidst an unprecedented economic crisis. These celebrations, however, have little or nothing to do with workers; they have apparently everything to do with political parties and their leaders. The next presidential election is only a few months away, and therefore we will see a lot of political muscle flexing today, with the prospective candidates bringing as many supporters as possible to Colombo from all parts of the country to attract media attention.

Given the despicable manner in which Sri Lankan politicians use workers to gain political mileage on the pretext of championing the rights of the working class, one wonders whether Sri Lanka should have a separate workers’ day on 21 March, when the World Puppetry Day falls. We hold workers in high esteem and intend no affront to them, but it needs to be said that the spectacle we behold on 01 May, year in year out, is a grand puppet show. Worryingly, workers do not care to assert themselves at least on May Day, much less eclipse politicians. They are not ashamed of making a public display of their servility to their political masters.

All political parties that stand accused of having suppressed labour rights have trade union wings, which have workers on a string. The UNP ruthlessly crushed a general strike in 1980. It resorted to mass sackings, and about 50,000 strikers were terminated overnight for demanding a pay hike. Dozens of those unfortunate men and women took their own lives. It is also celebrating the International Labour Day, with its trade unionists carrying its leaders on the shoulders and singing hosannas. The SLPP, whose leaders have the blood of workers on their hands and bankrupted the economy, causing many job losses, and reducing millions of people to penury, is also celebrating the International Workers’ Day! The same goes for the SLFP, which left the 1980 strikers in the lurch after they lost their jobs, and became part of the incumbent dispensation. The JVP, which murdered many trade union leaders and workers for opposing its terror campaign in the late 1980s, now claims to be the greatest protector of workers’ rights. It unflinchingly betrayed workers in 1980 by pulling out of that year’s general strike at the eleventh hour; in doing so, it demoralised the protesting workers beyond measure and emboldened the J. R. Jayewardene government to crush the strike. It is also celebrating the International Workers’ Day today. Time was when the traditional left was at the forefront of struggles to win workers’ rights, but unfortunately it has been in the SLFP-led governments responsible for gross violations of labour rights.

It may not be fair to say workers have not gained anything, at all, under successive governments. There are some progressive labour laws and workers’ welfare schemes. But workers would not have been in the current predicament if those governments had worked with their interests at heart. Workers are struggling for survival because all governments since 1977 have aggravated the country’s debt burden, which led to the current crisis precipitated by the Gotabaya Rajapaksa government.

Trade unions in Sri Lanka have earned notoriety for overstepping their limits, and some of their leaders have strayed into active politics at the expense of their members’ interests. Several trade unions were among those who misled President Gotabaya Rajapaksa and contributed to the ruination of the economy. It was at their behest that he plunged head first into a disastrous experiment with organic farming.

It is time Sri Lankan workers, especially their trade union leaders, abandoned the practice of helping further the interests of politicians on May Day, and realised the need to liberate themselves from the clutches of political parties. Let that be their May Day resolution.

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Editorial

JVP in NPP’s clothing

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Tuesday 30th April, 2024

The JVP-led NPP has come under an avalanche of criticism for a claim made by Nalin Hewage, one of its stalwarts, in a recent television debate, that the victims of the JVP’s reign of terror in the late 1980s were anti-social elements such as rapists, robbers, bootleggers and cattle rustlers. A protest was held near the JVP headquarters, Battaramulla, yesterday, against that controversial claim.

Hewage’s assertion runs counter to JVP/NPP leader Anura Kumara Dissanayake’s recent statement, in Canada, to the effect that he was sorry for the JVP’s violence in the late 1980s. One wonders whether the JVP is remorseful for its terrorism (1987-89) or divided on that score, with the party’s ultra-radical core remaining unremorseful. Is the JVP in the NPP alliance trapped in what may be called the Dr. Jekyll and Mr. Hyde duality? Other political parties planning to contest the upcoming presidential election are out for the JVP’s blood, so to speak, the prominent among being the SJB, the UNP and the SLPP.

The UNP has condemned the JVP for the latter’s mindless violence in the late 1980s. It seems to think the people have forgotten its own Caravan of Death, which left thousands of youth dead. It ran many torture chambers, massacred suspects and buried them in mass graves or burnt them on tyre-pyres on the roadside by way of a warning to others. Most of all, the country would not have been plunged into a bloodbath if the UNP had not falsely accused the JVP of complicity in the 1983 anti-Tamil pogrom and proscribed it. Perhaps, the UNP destroyed more lives than the JVP did during the 1987-89 period. Worse, the UNP, had no qualms about enlisting the JVP’s support to retain its hold on Parliament after falling out with President Maithripala Sirisena in 2018. The ‘Marxist’ JVP unashamedly propped up the beleaguered ‘capitalist’ UNP administration! The SJB leaders were in the UNP government, which benefited from the JVP’s backing. They did not make an issue of the JVP’s ugly past then.

The SLPP is also without a moral right to condemn the JVP for its past violence. Its leader Mahinda Rajapaksa would not have won the 2005 presidential election but for the JVP’s support. It was the JVP which led his propaganda campaign to all intents and purposes and made his victory possible.

The JVP is playing the victim card to gain public sympathy. It says it has become a target of the political elites in the SLPP, the UNP, the SJB, the SLFP, etc., They, it says, have banded together, shedding their differences, to suppress it. This claim is not without a modicum of truth. The leaders of the political parties opposed to the JVP co-operate to safeguard their interests, and that is why none of their leaders have been incarcerated for their crimes despite regime changes. But one disagrees with the JVP on the Marxist markers used in identifying elites. Going along with Vilfredo Pareto’s theory of elites instead, one may argue that the JVP leaders cannot be excluded from the political elites. Examining the structure and change of elites, Pareto has convincingly argued that elites and non-elites are not stable and new elites rise and oust othe old ones, and this change is called the circulation of elites, which has not spared the JVP. Besides, the JVP has earned notoriety for political promiscuity. It has honeymooned with the parties it describes as elitist. In 1970, it backed the SLFP-led United Front, and turned against the newly-formed government the following year. In the late 1970s, it got close to the UNP, whose government released its leaders from prison. Later, it turned on the UNP and met its Waterloo in 1989. In 1994, it backed the SLFP led by Chandrika Bandaranaike Kumaratunga, and subsequently fell out with it. In 2004, it coalesced with the SLFP and had representation in the UPFA Cabinet. The following year it enabled Mahinda to realise his presidential dream. It took on Mahinda later on. In 2015, it honeymooned with the UNP again for about five years. Now, it is on a campaign to vilify the UNP and its leader Ranil Wickremesinghe.

Fear being expressed in some quarters that the JVP is likely to revert to its old ways and suppress political dissent ruthlessly the way it does in universities is not unfounded. Its role in the 2022 protests, especially the abortive march on Parliament, has fuelled the fear that it has not bid farewell to extra-parliamentary methods to capture state power.

The JVP would have the public believe that winning the next presidential election will be a walk in the park for it, but reality is otherwise. It has its work cut out to allay fears in the minds of the public. Having made a colossal blunder at the last presidential election, the people are not likely to vote blindly for any political party or person again. The least the JVP can do to gain public confidence is to tender an unqualified apology for its past crimes and publicly abandon its outdated ideology.

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Editorial

Boosting state revenue

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Monday 29th April, 2024

The Committee on Public Finance (COPF), headed by SJB MP Dr. Harsha de Silva, is reported to have called upon the government to re-evaluate its tax policies, systems and mechanisms to boost state revenue. It has reportedly explained revenue losses in terms of what has come to be known as the Laffer curve, according to which when tax rates are extremely high, they lead to a decrease in taxed activities such as investment and consumption, causing a drop in state revenue, and when tax rates are too low, they fail to yield sufficient revenue for the state.

The SLPP government, under President Gotabaya Rajapaksa, did away with some taxes and slashed others at the expense of state revenue, but it has, under President Ranil Wickremesinghe, moved to the other extreme. The need is for a via media.

Citing reasons for the drop in state revenue, the COPF has highlighted the Excise Department’s failure to bust the fake revenue sticker racket and collect duties on liquor efficiently. However, impervious to logical reasoning and wise counsel, the government continues to labour under the misconception that jacking up taxes is the only way to boost state revenue although unconscionable tax increases lead to tax avoidance or evasion and promote the growth of the so-called underground economy.

The government does not curtail its wasteful expenditure for state revenue to increase. It has embarked on a campaign to shower handouts on the poor ahead of the upcoming presidential election to compass its political ends despite calls for it to rationalise welfare expenditure and ensure that poor relief is properly targeted. State funds are also wasted on useless government ceremonies and politicians’ junkets. Corruption, which is rampant among government politicians and officials, also causes huge losses to the state coffers, as evident from the Health Ministry procurement scams.

The COPF has expressed serious concern about the inordinate delay in digitalising the excise duty collection process. If the Excise Department as well as other revenue-generating agencies such as the Customs could be rid of various malpractices, which deprive the state coffers of billions of rupees annually, perhaps it may be possible to pass the benefits of revenue increases therefrom on to the public. It is the corrupt who fear and resist digitalisation, which could be considered the most efficacious antidote to corruption, for it engenders transparency.

It is hoped that the government will heed the COPF guidelines for increasing state revenue by preventing losses and eliminating waste instead of burdening the public with more taxes.

Fish or cut bait

The SJB and the JVP-led NPP keep challenging each other to a debate on the current state of the economy and how to revive it. At this rate, one wonders whether the debate will ever take place. The two parties are only wasting their time and energy. Given the appalling nature of parliamentary debates on economic affairs and other such vital issues, it is doubtful whether a debate between two Opposition parties, the SJB and the NPP, will leave the public any the wiser.

If either the SJB or the NPP has an alternative to the government’s economic recovery strategy and really feels for the country, it ought to unveil its silver bullet without further delay. There should be ample time for the economic programmes of the SJB and the NPP to be evaluated properly before the next election so that the public will be able to see if they are feasible.

The upcoming battle for the coveted executive presidency will be fought on the economic front. Having been taken for a ride, the public cannot be unaware that it is a mistake for their political allegiances to take precedence over their concerns about the economy. They are not likely to be swayed by promises and political rhetoric again while reliving hardships, shortages of essentials and winding queues.

If the SJB and the NPP are serious about having a debate on the economy, they should have a discussion, decide on a date and be done with it. Let them be asked to fish or cut bait.

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