Wednesday 6th November, 2024

The Ceylon Petroleum Corporation (CPC) has leapt to the defence of the JVP/NPP government, which is under fire for the latest fuel price revision. Only the prices of Octane 95 petrol and Super Diesel have been reduced much to the resentment of the ordinary people who use Octane 92 petrol and Auto Diesel.

CPC Chairman D. A. Rajakarauna has told the media that the CPC is no longer free to determine petroleum prices due to the presence of some foreign companies in the fuel retail market, where the current fuel pricing formula applies to all players alike mandatorily. The agreements Sri Lanka signed with those foreign firms under the previous dispensation have restricted the CPC’s independence; otherwise, the CPC would have been able to lower the prices of other fuel types as well, Rajakaruna has claimed.

The CPC Chairman’s argument smacks of a misrepresentation of facts about the impact of the aforesaid agreements; it is also self-defeating. His line of reasoning makes one wonder whether the JVP/NPP, which used to make ex cathedra assertions about fuel prices, which it promised to slash, was not aware of the agreements in question when it was in the Opposition. It claims to have a team of mavens, doesn’t it?

The CPC management has apparently sought to obfuscate the main issue and deflect the blame for the government’s failure to reduce fuel prices. It has chosen to leave something important unsaid about the fuel prices and the agreements under discussion; the foreign companies involved in fuel retailing will incur losses only in a situation where fuel prices are arbitrarily reduced while the petroleum taxes are kept at the existing level, the way governments did in the past for political reasons. The costs of all fuel types include government taxes. The NPP pledged to lower fuel prices by reducing petroleum taxes, didn’t it? If it had decreased the taxes, fuel prices could have been brought down through the pricing formula, and the foreign companies would not have suffered any losses.

The Opposition insists that taxes on a litre of Octane 92 petrol amount more than Rs. 150. Will the CPC panjandrums give cost breakdowns for all fuel types so that the public will know how much they pay by way of petroleum taxes? They should also publicise the controversial agreements.

There is no gainsaying that the current government or a future administration, for that matter, must not resort to anything that will stand in the way of the ongoing efforts to boost state revenue significantly. The JVP/NPP should have known better than to promise huge fuel price reductions. Some of the main causes of the current economic crisis were politically motivated tax and tariff reductions under the Gotabaya Rajapaksa government. The ongoing economic recovery programme would go pear-shaped if some of the NPP’s main election promises were implemented.

The government’s failure to carry out its pledge to reduce fuel prices substantially entails a considerable political cost, which the JVP/NPP needs like a hole in the head at this juncture. But there is hardly anything the government can do about it. The IMF has set revenue targets for Sri Lanka, and unless they are met, the next tranche of the extended fund facility will not be unlocked. Hence the need for all political parties to refrain from promising what they cannot deliver.

The NPP is not alone in having made promises that cannot be fulfilled. One wonders whether those who made them were really serious about honouring them. The SJB has also promised to renegotiate the IMF programme!

The energy sector agreements the CPC Chairman has reportedly frowned upon bolster arguments against involving foreign companies in large-scale power generation projects here. The entry of conglomerates such as Adani into the local power sector could lead to a situation where they will pursue profit maximisation ruthlessly, causing Sri Lanka to run the risk of facing the same fate as Bangladesh, which is now at the mercy of Adani Power. It will be interesting to see how the NPP and its rivals propose to tackle this issue, which is bound to affect Sri Lanka’s energy sovereignty?

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.

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.