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Editorial

Bailout and ‘bili boys’

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Wednesday 13th December, 2023

The government is on cloud nine, having secured the passage of its VAT (Amendment) Bill. It is flaunting the outcome of Monday’s vote in Parliament as a huge victory. On Sunday, the Opposition had the public believe that the SLPP parliamentary group was divided on the proposed VAT increases, and it might be difficult for the government to have the crucial bill passed. It also succeeded in derailing the VAT debate, on Sunday, by staging a walkout and thereby rendering the parliamentary session inquorate. But the VAT Bill was put to the vote the following day, the ayes had it comfortably with 100 government MPs voting for it and 55 Opposition members opposing it.

The government will now be able to have the second tranche of the IMF loan unlocked and go ahead with external debt restructuring confidently. But it cannot wish away the political fallout of its economic undertaking, whose success hinges on its ability to adopt some extremely unpopular measures such as tax and tariff increases.

State Minister of Finance Ranjith Siyambalapitiya has told Parliament that inflation, which is currently at 3.4%, would increase by 2.5% when the VAT increases take effect. This, we believe, in an understatement. Independent economists are of the view that it is not possible to estimate the exact increase that the new VAT regime will cause in inflation, but the general consensus is that it will be much higher than 2.5%. Even the ballpark figure Siyambalapitiya has given presumably in a bid to downplay the real impact of the VAT increase from 15% to 18% on the cost of living is disconcerting. Fuel price increases alone will cause cost-pushed inflationary surges with transporters jacking up fares and freight by disproportionate amounts.

The government initially sought to do away with VAT exemptions previously given to 138 goods and services, but pressure from the Opposition, the media and civil society outfits made it reconsider its decision and leave out about 40 items. But that will not help mitigate the severe blow from the VAT hikes.

Curiously, SLPP MP Namal Rajapaksa has distanced himself from the IMF bailout programme and gone to the extent of absenting himself when votes are taken in Parliament on matters related thereto. He was absent on Monday (11) as well. Prior to the vote, he said he was against the Bill, but his father, Mahinda Rajapaksa, voted for it. He also struck a discordant note on Budget 2024, when he said he would not back it because it did not offer relief to the public.

What is up Namal’s sleeve? How come the new VAT regime which Namal is opposing is acceptable to the SLPP?

The public no doubt wants the government to succeed in straightening up the economy, but there is no love lost between them and the current rulers. Therefore, the people’s appreciation of the government’s performance on the economic front is not likely to translate into votes for the constituents of the ruling coalition; the incumbent administration is seen to be cleaning up an economic mess of its own making.

The Rajapaksas are running with the hare and hunting with the hounds. Some of them are backing the government’s economic recovery programme while others are being critical of it. They are apparently labouring under the belief that if Namal dissociates himself from the government’s unpopular policies, actions, etc., which are necessary to sort out the economy they themselves ruined, the adverse impact thereof will not affect Namal’s political future. The SLPP is believed to be grooming Namal for a leadership role. The other SLPP MPs, especially the young ones, are denied the same leeway as Namal; they have had to vote for all unpopular measures such as VAT increases, debt restructuring, etc., at the risk of incurring public anger. They could be considered the political version of cannon fodder or ‘bili boys’. But whether the SLPP leadership will be able to take the public for a ride again with the help of such ruses remains to be seen.



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Editorial

The games they play

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The new parliament, packed with first timers as never before, had an interesting session last week with the dust yet unsettled over the issue of the last speaker’s doctorate. Now plain MP Ranwala who resigned from his august position, which ranked him number three in the national protocol list, has not admitted any malfeasance or skulduggery. He says his instant problem is an inability to quickly get clear proof of his qualification from Waseda, a private university in Japan with an affiliate research institutes, one of which he claims awarded him the disputed degree. This has been rubbished by critics saying we live in an age of instant communications. However that be, the ex-speaker is widely accused of flaunting a qualification he did not possess and the government which proposed him for the jb continues to draw flak on this matter. Whether his resignation was a command performance or voluntary remains unclear. After he gave up his wig and robes, there have even been demands that he resigns from parliament as he allegedly presented himself to the electorate with a qualification he did not possess.

Gone are the days when leftist giants of the past like Dr. NM Perera who earned a DSc. degree from the London University and Dr. Colvin, R. de Silva who earned a PhD from the same university strode the legislature and were recognized countrywide for their erudition. There was also the unforgettable W. Dahanayake from Galle, who succeeded the late SWRD Badaranaike as prime minister when the latter was assassinated. He called himself Dr. Wijayananda Dahanayake after he was conferred a doctorate honoris causa by the Vidyodaya University. He as Minister of Education, raised Vidyodaya and Vidyalankara from pirivena to university status and this was recognized by the conferring of the honorary degree.

Although some honorary doctorate holders use and have used the title, others desisted, restricting themselves to using it only in their curriculum vitae with the specific notation of honoris causa. We even had the notorious Mervyn Silva flaunting a so-called doctorate from the Institute of Alternative Medicine founded by the late Dr. Anton Jayasuriya who was a western qualified medical practitioner and a well know acupuncturist. His institute freely distribution of doctorates and all manner of persons were decorated with them.

There was a time in the past when a well know surgeon of yesteryear insisted that he be called Mr. Muller rather than Dr. Muller as he did not hold a Doctor of Medicine degree. In our country and many others holders of the MBBS (Bachelor of Medicine, Bachelor of Surgery) degree call themselves doctor although they hold no MD (Doctor of Medicine) qualification. In more recent years we have seen engineers, architects, attorneys-at-law and the like prefixing their names with Eng, Archt, Attorney-at-Law etc in front of their names obviously reacting to the Dr. prefix used by medical practitioners.. In fact, first time MP Dilith Jayaweera pertinently raised the question of why such appellations be used at all in Parliament. Why indeed? In fact many MPs commonly prefix their names with “Honorable,” a traditional nicety within the parliamentary chamber, quite needlessly and irrelevently outside that chamber. Cynics would say many of them are anything but honorable!

Apart from the Ranawala ruckus, the last week in parliament saw a lot of ha ho about titles used by various MPs. Justice Minister Harshana Nanayakkara accused SJB MP Ajith Perera of calling himself Adhinithigna (Advocate) though the two branches of the legal profession, Advocates and Proctors, were fused to into a single branch of Attorneys-at-Law in 1973 when Perera would have been all of five years old! This resulted in a lot of angry back and forth and hair splitting about the Sinhala word “counsel.” Nanayakkara said he was once a state counsel or Rajaye Adhinithigna. An old story about Namal Rajapaksa being helped through his final law exam was resurrected with Minister Wasantha Samarasinghe quoting a batch mate of Rajapaksa who made the original allegation and thereafter fled to Switzerland in fear of his life. This worthy, with whom the minister is in contact, apparently is willing to cooperate with any fresh inquiry. Rajapaksa said he would resign if the allegation is proved and challenged the accusor-minister to do likewise if it is not proven.

Opposition Leader Sajith Premadasa made a long explanation about his education beginning at the nursery stage at St. Bridget’s Convent, through St. Thomas’ Prep and Royal College. He admitted he had no GCE ‘OL’ from Sri Lanka as he had gone abroad and said he passed both the ‘O’ and ‘A’ Level exams in the UK. He had a degree from the London School of Economics and postgraduate qualifications from the US. Premadasa displayed a framed certificate in the chamber and said that he was tabling all documents for Hansard.

Apart from this, Health and Media Minister Nalinda Jayatissa read out a list of MPs who had benefited from the President’s Fund to pay medical bills and have since promised to make new revelations in the future. Former President Ranil Wickremesinghe, with nobody in parliament to speak on his behalf, had issued a press statement in this regard. The Daily Mirror on Friday headlined this report “None were given over Rs.1 million outside procedure except on one occasion: RW.” Wickremesinghe had indicated that there were may “personal requests” for assistance but did not expand.

The Fund set up by law in 1978 during the JR Jayewardene tenure was initially funded from donations and partly supported by the Development Lottery. There is very little information in the public domain on the subject but it has long been felt despite it being set up for the poor, many of the rich had benefited including progeny of the well-to-do sent to leading universities abroad at the fund’s expense. Given the current interest generated on this subject, it would be sensible to publish all disbursements and annual accounts as there is good reason to suspect that it is a means of patronage.

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Editorial

Ranil’s advice

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Saturday 21st December, 2024

Former President Ranil Wickremesinghe has urged the SJB-led Opposition to act responsibly and help ensure the continuity of the IMF bailout programme, which has enabled the economy to regain some stability. He has also thanked the NPP government for having kept the IMF programme on course.

Wickremesinghe’s exhortation to the Opposition and unsolicited advice to the government are timely but not devoid of politics. He is seeking the credit for what the country has achieved through the ongoing IMF programme, which got underway in earnest under his presidency. In fact, it is doubtful whether any other President would have had the courage to make a host of unpopular yet essential decisions to address the economic crisis. So, Wickremesinghe is not without a moral right to ask the government and the Opposition to act prudently and help the country make the most of the IMF programme. It is hoped that the Opposition and the government will heed Wickremesinghe’s advice and act accordingly.

Sadly, the SJB has chosen to play to the gallery, asking the government to renegotiate the IMF programme. It could not even sort out an internal dispute over its National List appointments, and one of its constituents resorted to legal action. So, how can such a political party claim to be able to make the IMF bend to its will? It is obviously trying to earn brownie points with the public by bellowing rhetoric.

The IMF programme is no economic panacea, but it will surely help Sri Lanka gain economic stability in the short-term. It has already yielded some tangible results. Much more remains to be done to ensure Sri Lanka’s long-term economic wellbeing, and it is up to the current dispensation as well as future governments to develop the economy and achieve debt sustainability.

Nobody likes IMF bailout conditions, which can be extremely harsh, but they are a prerequisite for a bankrupt country’s economic recovery. If Sri Lanka managed its economy properly, it would not have had to ask for IMF help, which comes with constricting conditions. However, what the IMF has prescribed is what Sri Lanka should have done on its own a long time ago.

When a country spends more than it earns and goes on borrowing recklessly from external sources to meet its revenue shortfall, it runs the risk of facing an economic crisis. The Mahinda Rajapaksa government indulged in wasteful expenditure; it spent a great deal of borrowed money on Ozymandian projects. The UNP-led Yahapalana government also borrowed heavily. The JVP backed that administration to the hilt. The Gotabaya Rajapaksa administration, in its wisdom, slashed taxes and tariffs, oblivious to the disastrous consequences of its harebrained action. The Covid -19 pandemic came, necessitating prolonged lockdowns, which took a heavy toll on the economy. The rest is history.

A person who falls into a well has to come out of its mouth, as a local saying goes. There is no other way out. Sri Lanka finds itself in a similar situation. Having ruined the economy, it found itself at the bottom of an economic pit. Thankfully, in answer to its pitiable pleas, the IMF threw a lifeline, which has enabled it to come halfway up. Needless to say, nothing will be stupider than for it to let go of that lifeline.

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Editorial

Lest watchdogs should become lapdogs

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Friday 20th December, 2024

The JVP-led NPP’s ascent to power rekindled the hopes of good governance activists for a radical break from the past and a new political culture. The incumbent government came under pressure to ensure the independence and integrity of the parliamentary Financial Committees by allowing them to be headed by Opposition MPs. But the efforts of the campaigners for good governance have been only partially successful. SJB MP Dr. Harsha de Silva has been appointed the Chairman of the Committee on Public Finance (COPF), and the government has said one of the NPP members should head the COPE (Committee on Public Finance).

The government’s position is that the COPE will conduct investigations into what happened under the previous administration and therefore an NPP MP should chair it. The Opposition’s efforts to persuade the government to change its mind have been in vain. President Anura Kumara Dissanayake himself reiterated the NPP’s position in Parliament on Wednesday in response to a request from Opposition Leader Sajith Premadasa that the government reconsider its decision.

The COPE plays a pivotal role in exposing irregularities in state enterprises and has the potential to restore public trust in Parliament. According to Standing Order No. 120, the duty of the COPE is to examine the accounts of public corporations, institutions funded wholly or in part by the state and of any business or other undertaking vested under any written law, with the assistance of the Auditor-General. One of the criticisms against the COPE is that its probes do not yield the desired results, and its reports gather dust. But there have been glaring exceptions.

The COPE under Dr. Wijeyadasa Rajapakshe’s chairmanship, during the Mahinda Rajapaksa government, played an activist role, paving the way for the reversal of a questionable divestiture programme—the privatisation of Sri Lanka Insurance Corporation and Lanka Marine Services. Similarly, the COPE under D. E. W. Gunasekara’s chairmanship was bold enough to produce a damning report on the first Treasury bond scam in 2015, but the UNP had Parliament dissolved, forestalling the submission of that vital document to the House. The COPE carried out its second probe into the Treasury bond scams under the chairmanship of the then Opposition MP Sunil Handunnetti. Thus, the COPE has proved its ability to safeguard the interests of the public, and the precedents it has set should be followed. Handunnetti, who is a powerful minister in the incumbent government, ought to lend his voice to those who are demanding that an Opposition MP be appointed as the COPE chairperson.

Situations could arise warranting investigations that adversely impact the interests of the incumbent government. If the COPE chairperson is a ruling party MP, he or she, under such circumstances, will not be able to act impartially owing to his or her party loyalty. This is why the campaigners for good governance insist that the parliamentary watchdog committees should be chaired by the Opposition.

The government’s argument that it has to appoint one of its MPs as the COPE chairperson because the irregularities to be probed occurred under the previous dispensation, whose MPs are currently in the opposition, is not tenable. The vast majority of the Opposition MPs in the current Parliament were not members of the previous administration, which became a metaphor for corruption, and therefore one of them can be appointed the COPE head.

The COPE will have to probe irregularities in state institutions during the current administration as well, and a ruling party MP functioning as its chairperson will be constrained to act in such a way that he or she is seen to be biased; the integrity of the watchdog committee will be compromised in such an eventuality.

One can only hope that the NPP will change its position and let an Opposition MP be appointed as COPE head.

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